Article / 25 October 2016 at 22:30 GMT

US Market Wrap: Carney comments underpin Cable

FX Trade Strategist / www.Loonieviews.net
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Watchlist:

  • Nothing of note

US Data released:

  • S&P/Case-Shiller Home Price Indices-August (Actual 5.1% vs. forecast 5.0%)
  • Housing Price Index-August 0.7% vs. 0.5%)
  • Consumer Confidence-October (Actual 98.6% vs 101.0)
  • Richmond Fed Manufacturing Index (Actual -4 vs forecast -5)
  • API Weekly Crude Stocks change (Actual 4.8 million/b vs. previous -3.8 m/b)

FX markets were singing “We got It going on” (Bon Jovi, 2007) during the New York session. The ranges weren’t all that large but there was plenty of travel between the tops and bottoms to keep things interesting.

EURUSD was a prime example. The single currency started the day at 1.0880, dropped to 1.0850 and then soared to 1.0904 after weak Consumer Confidence data. It was back to where it started by the end of the day.

Sterling traded heavily ahead of Bank of England Mark Carney’s remarks. 

It opened at 1.2235 and slid ahead of the speech to a low of 1.2080. Cable then took off like a rabbit on a greyhound track when Carney hinted that further rate cuts may not be on the cards. GBPUSD spiked to 1.2205 and drifted lower into the close.

The Antipodean currenices traded in similar fashion to EURUSD, down in the morning and then higher into the close.

Oil prices opened the session under pressure due to speculation of rising US supply and concerns about which other nations would join in with Iraq in demanding production cap exceptions.

WTI opened at $50.87 and closed at $49.82. The API report of a build of 4.8 million barrels in US crude inventories after the close drove WTI down to $49.32

US equity indices retreated and ended the day in the red in part because of some poor earnings reports. After hours, Apple (AAPL: NASDAQ) reported that net income sank 19% but still reported a very healthy $45.7 billion profit for the fiscal year.

xxx
 While Apple's net income dropped, profits remain very healthy. Photo: iStock


Opinion: Trading Floor Managing Editor, Martin O'Rourke gazes into a crystal ball about a Trump presidency in: US Election: 10 scenarios that could happen if Trump wins

-- Edited by Adam Courtenay

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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2y
goldfinger goldfinger
I like the Mark Carney hinted at no further rate cuts. The fact is the PM will have him for toast if he flies in the face of her desires. Interest rates will turn up sooner than we think. As with Yellen, Carney was a political appointee. Never a good situation when we are supposed to run an independent central bank.

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