Article / 28 June 2016 at 22:56 GMT

US Market Wrap: See-saw trading leaves dollar bid

FX Consultant / IFXA Ltd

  • Japan: Retail Trade                                                     1950  GMT

US data released :

  • PCE: (Q1 Actual 0.2% vs. forecast 0.2%, Core Actual 2.0% vs. forecast 2.1% q/q) 
  • S&P/Case Shiller Home Price Indices-April (Actual 5.4% vs. forecast 5.4%, y/y) 
  • Consumer Confidence-June (Actual 98 vs. forecast 93.3) 
  • API Crude Stocks Change (Actual -3.86 m/b vs. previous -5.22 m/b) 

The end-of-day news of a terrorist attack at Turkey's Istanbul airport has likely put a halt to the risk-seeking mode that was evident today in Europe and New York.

Sterling rode a roller-coaster. It started the day at 1.3292, climbed to 1.3417 and dropped back to 1.3273 by lunch time. After that it traded quietly until it shed a big figure at the end of the day. EURUSD declined all morning, rallied in the afternoon and moved lower at the end of the day. The commodity currency bloc see-sawed during the session only to close near where it started.

European Central Bank President Mario Draghi, in a speech in Portugal, appeared to be calling for a closer alignment of policies with its peers, which some see as an admission that the ECB can control inflation on its own.

Oil prices were offered to start the day but turned bid soon after. WTI rallied from a low of $45.82/b to $48.08 as Asia started Wednesday. The decline in the API crude data helped the end-of-day move.

There was risk contagion in equity markets again today, but this time it was risk-seeking. The upbeat tone evident in Europe translated into very healthy gains in US equities. However, at the end of the day, Nike (NKE: NYSE) shares dropped when quarterly sales missed forecasts. Volkswagen is shelling out $603 million to settle consumer complaints in many US states. Perhaps the consumers will use their settlement money (if they get anything) and buy Nike products.
 Sterling rode a roller-coaster throughout the trading day. Photo: iStock


The UK's political quagmire is described in detail by TradingFloor contributor Stephen Pope in: European disunion and an untied Kingdom.

– Edited by Gayle Bryant

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.

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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