Article / 19 September 2016 at 22:52 GMT

US Market Wrap: Commodity bloc flips on oil flip-flop

FX Consultant / IFXA Ltd


  • Australia: Housing Price Index 2130 GMT 
  • Australia: Reserve Bank of Australia minutes 2130 GMT 

US Data released: 

  • NAHB House Price Index September (Actual 65 vs. forecast 60) 

Commodity currency bloc traders were guilty of a DUI.  Driving under the influence – of oil. A talkative Venezuelan oil minister, Eulogio Del Pino, was behind both the oil rally and the decline.

On the weekend he was saying that Opec and non-Opec nations were close to an agreement to stabilise prices. Oil rallied. This morning he said that the global oil supply needed to drop 10% to sustain the level of consumption. Oil prices dropped and the commodity currency bloc sank. 

WTI oil prices rose from $43.24 in the morning, peaked at $44.10 and then dropped back to the lows. News in the afternoon that rebels blew up another Nigerian pipeline was ignored. 
The story in the FX majors is that there is no story. The Bank of Japan and FOMC meetings on Wednesday have traders in wait-and-see mode.

US equity indices chopped around but when the closing bell rang they were pretty much flat. Traders busied themselves watching news of the arrest of the NY bombing suspect.

 WTI oil prices rose from $43.24 in the morning, peaked at $44.10 and then dropped back to their lows. Photo: iStock


For an interesting look at this week's central bank meetings, Saxo Bank Head of FX Strategy John Hardy's article, "A critical week for markets", is worth reading.

– Edited by Susan McDonald

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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