Posted on: 10 May 2016, by: Pepperstone Support, category: Market Review
The USD continued higher on Monday aided by a number of factors: EM underperformance in focus, driven by Technicals and short-covering of USD on our platforms. MXN market volumes were around 20% higher than normal, with ZAR also around 15% higher than normal. USDAsia was also in the spotlight, with CNH market volumes around 50% above normal, with SGD and JPY around 20% above normal.Post NFP fallout with investors repeatedly reminded that June is not off the table.
Fed member Kashkari joined Dudley in this view Monday, while Evans took a “wait and see” tone. However, market pricing still shows just 2bps of hikes priced in for June and 5bps for July. Everyone is waiting on retail sales. WTI now tests $43.35 – barely holding the 43.22 support area. Note, ahead of API on Tuesday, that the latest Genscape report shows a build of 1.4mn barrels for Cushing stocks.
BRL also kept things lively – an unexpected twist to the impeachment proceedings saw USDBRL spike from 3.53 towards 3.58. The move has reversed but the causation remains a consideration for the near-term. This event is elaborated on in EM in focus below.With all eyes focused on US retail sales Thursday and Fedspeak throughout the week, intraday developments in G10 failed to truly influence prices.