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Article / 26 July 2016 at 22:46 GMT

US Market Wrap: Focus stays on FOMC soft oil

FX Consultant / IFXA Ltd


  • Australia: Consumer Price Index  2130 GMT 

US data released

  • Case-Shiller Home Price Index (Actual 5.2% vs. Forecast 5.5%) 
  • Markit Composite PMI (Actual 5.15 vs previous 51.2) 
  • Markit Services PMI (Actual 50.2 vs. forecast 52.0) 
  • New Home Sales (Actual 3.5% vs. forecast 1.1%) 
  • Consumer Confidence (Actual 97.3 vs forecast 95.7) 

New York FX traders mulled over the same concerns as their brethren in Europe and Asia and apparently came to the same conclusion; it’s probably smart to wait and see what the Federal Open Market Committee statement says. 

USDJPY traded sideways in the morning and not too far from the overnight low and then jumped mid-morning, likely due to some profit-taking as European traders signed off for the day. However, it wasn’t able to crack 105.00. EURUSD bounced around in a 1.0980-1.1020 band while GBPUSD traded similarly albeit in a wider band.

Today’s US data was mixed to positive with the jump in New Home Sales garnering the most attention. These were the highest sales since February 2008. Consumer confidence was pretty much unchanged despite a rather turbulent month around the world. US equity traders seemed to be humming Shania Twain’s “That Don’t impress me much” as US equity indices were mixed to flat as of 1500 GMT.

Oil traders had another busy day with sellers in control at the start. The sellers soon became buyers and by lunch time, WTI was at $43.02. Concern that rising gasoline inventories is new evidence that the supply/demand imbalance has become worse not better, has fuelled the decline.

The World Bank issued a new report today that raised its forecast for crude oil prices in 2016 to $43.00/b from $41.00/b which may have provided a bit of support to WTI. The minor bounce in WTI took USDCAD off its four-month peak, but the retreat has been shallow.

When Ghostbusters can't help with fiscal and monetary stimulus plans, who are you going to call? That is kind of the question TradingFloor contributor Neil Staines asks in his article: Busting the inflation ghost.

 Oil traders had a busy day with sellers initially in control but they soon
became buyers. Photo: iStock

– Edited by Gayle Bryant

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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Missed a day? Here’s what we had to say during our Asian session and our regular European Morning Markets, From the Floor and Mid-session Europe.


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