Posted on: 13 May 2016, by: Pepperstone Support, category: Market Review
The USD picked up on the back of US yields against EUR and JPY. EURUSD now tests 1.1370 and USDJPY, 109.10. From AUDUSD to AUDCAD to GBPUSD – sideways trading.
US Initial Jobless Claims came in at 294k (ie close to the “deterioration threshold” of 300k), bringing the 4w MA up from 258k to 268k. The US Labor Department said there were no special factors. The jump was led by the state of New York - traders suspect that this was related to a large round of layoffs from one company.
Downside risks in US equities remain after a full week of major players putting out thesis after thesis about the bear market developing. Price action was driven by underwhelming results in earnings, particularly from major US retailers. Hawkish fed speak was also chatted about, but clearly ignored. Rosengren warned that the market is underestimating the possibility and pace of future rate hikes. George and Mester also spoke, but because they are already hawks of note, Rosengren’s comments carried a touch more weight given his historically dovish leanings.
Positioning was relatively unchanged as there were no major breakouts in G10.