Forex news for US trading May 14, 2015:
- US April PPI -0.4% vs +0.1% m/m expected
- US initial jobless claims 264K vs 273K expected
- US March nondefense capital orders ex-aircraft revised to +0.6% from +0.1%
- Draghi: ECB to implement QE in full
- Canadian March new house price index +0.0% m/m vs +0.1% expected
- Credit Suisse pushes back BOE rate hike to Feb 2016
- ECB's Weidmann: Decision on Greece lies with governments
- Canada's PM Harper says that mortgage debt is manageable
- Strong headwinds for inflation persist - ECB IMF document
- IMF's Lagarde says she's still concerned about job growth
- BOC's Patterson: BOC looking 'seriously' at inflation target
- Gold up $5.50 to $1221
- WTI crude down 79-cents to $59.71
- S&P 500 closes up 22 points to record high of 2121
- US 10-year yields down 6 bps to 2.23%
- German 10-year yield down 2 bps to 0.70%
- Euro leads, Australian dollar lags
It was the Assumption Day holiday in parts of Europe and that cooled trading activity. The general theme was sideways trading but there was a decent spell of US dollar buying against the euro and pound (it ebbed) and another against commodity FX (it didn't).
EUR/USD was riding high into US trading as it cruised to a fresh 4-month high of 1.1445 but after a few hours of chopping close to that level, the bond market began to turn and the selling started. It continued down to 1.1350 at the London close. There was talk of options-related selling. But tellingly, it slowly crept high in later trading up to 1.1409 as the massive short interest continues to look for ways to the exits.
Cable closed higher once again but well off the highs as the bond rout slowed. From above 1.58 it slide to down to 1.5750 where it found support and then slowly climbed to 1.5772.
Action in USD/JPY was limited. The pair stumbled on the PPI data to below 119.00 from 11925 but a solid open in the stock market turned into a great day for stocks and that led to modest buying. Last at 119.15.
The Canadian dollar stumbled in US trading. It was all about oil as crude prices reversed to decline after earlier gains. In Europe, USD/CAD went back to test 1.1900 but couldn't match yesterday's low and that was the sign for a turnaround as the pair rallied to 1.1980.
AUD/USD slowly made lower lows, including heavy selling into the options cut. A quick drop to 0.8080 from 0.8130 was the highlight of the day and it was sideways trading from there. After a few days of gains, a small retracement doesn't set off alarm bells.
