FX Careers

Market Analysis

Stocks Hit Again as Data Comes in Higher

US stock markets took another hit yesterday as Services PMI numbers out of the states surprised to the topside. The Dow dropped 0.57%, the S&P 0.7% and the Nasdaq took a hefty 1.06% hit as investor concern that the Fed may hike again this year increased or at least keep rates higher for longer. US Treasury yields pushed higher again with the benchmark 10-year rising another 3bps to 4.298% and the dollar continued its monotonous grind higher, the dollar index hitting a 6-month high just above 105.00. Oil prices remained bid, with WTI settling at $87.54 and Brent closing at $90.60.

Bank Of Canada Singing from a Familiar Hymn Sheet

The Bank of Canada kept rates on hold at 5% last night advising that it had noted the economy was experiencing a period of weaker growth but that it was prepared to raise rates further if it had to. They are singing from a very familiar hymn sheet and the rhetoric is remarkably similar to what we are hearing from other central banks including the Fed and the Reserve Bank of Australia. The Canadian dollar had a whippy trading day in familiar ranges and is still sitting near longer-term resistance levels, but there are clear trading opportunities ahead in the FX market if data starts to take central banks in different directions over the course of the next few months and the Loony could be one currency that moves hard in those circumstances.

Trade Numbers in Focus

The APAC session will have a big focus on Trade Balance data today with both Australia and China set to deliver their latest updates. Australia will remain in focus later in the session with the Reserve Bank Governor Philip Lowe set to speak in Sydney. The European session is relatively quiet again, although FX traders will always pay attention when the SNB talks about Foreign Currency Reserves. The US session once again promises to be livelier with the weekly US unemployment claims data due out as well as the Ivey PMI number in Canada. We also hear from central bankers FOMC member Patrick Harper and Bank of Canada Governor Tiff Macklem later in the day.