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Article / 08 June 2017 at 21:42 GMT

US Market Wrap: Super Thursday? Much ado about nothing

FX Trade Strategist / www.Loonieviews.net
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Watch List:

Live UK election results from The Guardian: Tories largest party in hung parliament, says shock exit poll


US Data Released:

  • Initial Jobless claims (Actual 245,000 vs. forecast 240,000) 

William Shakespeare’s comedy “Much Ado About Nothing” was written 418 years ago. The title is a fitting description for today’s highly anticipated, yet ultimately disappointing Super Thursday events, at least two-thirds of them as the UK election results are unknown at the time of writing.

The European Central Bank policy meeting and Mario Draghi’s press conference was anticlimactic. Wednesday’s leaks of lowered inflation forecasts proved to be true. Nevertheless, EURUSD eased down from 1.1240 to 1.1195 after the press conference and then drifted higher in the afternoon.

Have you ever watched a sporting event on television and wondered if the announcer describing the action was watching the same game as you? If so, then when you scroll through the news stories about today’s James Comey testimony to the Senate Intelligence Committee, you will get a sense of déjà vu.

The FX reaction to the Comey testimony was not to react. USDJPY traded sideways in a 109.85-110.35 range and closed a tad softer from where it opened.

The UK election locked sterling inside a 1.2908-1.2950 band and it closed almost unchanged.

The commodity currency bloc was even quieter. AUDUSD and USDCAD finished unchanged on the day while NZDUSD inched higher. The Bank of Canada Financial Stability Review was a non-event.

Oil prices made another short-term low at the beginning of the session, dropping from $46.13 to $45.20 just after Mario Draghi’s press conference started. Prices bounced back to the opening level by mid-morning and then they drifted down until closing at $45.68 a barrel.

Wall Street was treading water for most of the day before ticking higher into the close.

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Former FBI director James Comey's testimony was highly anticipated, yet ultimately fell short of expectations. Photo: Shutterstock



Opinion

Mario Draghi was about as dovish as he could be, writes Saxo Bank Head of FX Strategy John Hardy in 'As dovish as possible' — #SaxoStrats.


– Edited by Susan McDonald


Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Loonieviews.net. 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 Asia session, our regular European Morning Markets, From the Floor and Mid-session Europe.
08 June
Market Predator Market Predator
Update: GBP plunged after election.
08 June
Juhani Huopainen Juhani Huopainen
Yep.

Nobody saw this one coming. Everyone believed the surprise would come from ECB or Comey, but no. It had to be the one that happens at unearthly hours.
08 June
Michael O'Neill Michael O'Neill
The drama around ECB and Comey was largely fabricated. With the ECB, it seems the media decided that Draghi would be hawkish and reported it that way. With Comey, the Media is largely anti-Trump and they were drooling at the prospect of Comey accusing Trump of an impeachable offence.
IMHO, the UK election was different. Theresa May arrogantly called an election that she didn't have to and got spanked by voters who were annoyed at her, politics or the whole Brexit issue. (That and 3 quid will get you a coffee at Starbucks)
08 June
Juhani Huopainen Juhani Huopainen
I agree. On Thursday morning I suggested that all three "Super Thursday"-events would turn out to be dull, and after the "risk events" had disappeared, there would be more upside for stocks.

Yes, ECB was even duller than I expected. Comey's testimony was about as dull as I expected, and the reporting hmmm...as inventive as always.
08 June
Michael O'Neill Michael O'Neill
Glad to hear you think that way. I was beginning to wonder if I was going nuts (more so than I already am)
09 June
Juhani Huopainen Juhani Huopainen
I've got so much distance to the newsflow and events that I find it easy to take contrarian views against the crowd.

A copypaste of what I wrote on Facebook:

..funnily enough, Comey confirmed for the first time that Trump has not been under FBI investigation, and there were several other pearls thrown in the same direction. The east coast media didn't mention these much, but what else was there to expect...

But for pigs the pearls are meaningless. If Trump would not have been loyal to Flynn (which was reasonable, given the pettiness of Flynn's misdeed) and asked Comey to go easy, and if Trump would not have sacked Comey (because Trump wanted Comey to state "Trump under no investigation"), there would not have been anything at all, except some semi-dirty cabinet members that can always be replaced.
09 June
Juhani Huopainen Juhani Huopainen
But now Trump has to live with the accusation that he obstructed and pressured. There won't be impeachment, but he is a lame duck from now.

This means only stuff that ALL republicans would love to have will go through.

I kind of think this is the worst possible outcome. There won't be infrastructure projects, because dems won't touch, and reps won't agree on details. On the plus side, most of the bad stuff will also be unlikely to happen.

But the true problem will be the tax cuts. The reps will probably go ahead with a tax cut plan, and it will be as irresponsible as the tax cuts made by Reagan or Bush.

Trump came in believing to be deregulator and actuator, but will limp out as a washed-out lame keynesian with deficit-funded tax cuts.
09 June
Michael O'Neill Michael O'Neill
Trump may have had some good ideas but he is a pretty big a-hole and his own worst enemy.
09 June
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