Forex news for January 5, 2017:
- December 2016 US ADP employment report 153k vs 175k exp
- December 2016 US ISM non-manufacturing PMI 57.2 vs 56.6 exp
- December 2016 US services PMI final 53.9 vs 53.4 exp
- Fed's Williams: The dot plot median of three hikes in 2017 is reasonable
- Saudis cut oil output to fully implement OPEC pledge - reports
- EIA weekly oil inventories -7051K vs -2000K expected
- Haldane: BOE action prevented UK unemployment from being higher
- November 2016 Canadian PPI 0.3% vs 0.7% prior m/m
- US initial jobless claims 235k vs 260k exp
- December 2016 US ADP employment report 153k vs 175k exp
- BOE's Andy Haldane says the UK recovery has been very slow
- OPEC's Dec output drops 200kbpd says Reuters survey
- Hollande goes begging for Brexit banks
- December 2016 US Challenger layoffs 33,627 vs 26,936 prior
Markets:
- WTI crude up 44-cents to $53.69
- Gold up $18 to $1181
- S&P 500 down $2.50 to $2268
- US 10-year yields down 7.6 bps to 2.36%
- JPY leads, USD lags
2017 has been a rough ride for dollar bulls. The data has been good but ADP might have spooked the market ahead of tomorrow's jobs report or it might still be positioning flows as the year gets underway.
What's consistent so far this year is selling into the London fix, so that will be something to watch going forward. It also suggests that flows, not fundamentals are in control.
The dollar lows were right around the fix today as USD/JPY challenged 115.00 in a big daily drop. Cable had been lower earlier on Brexit worries but ripped to 1.2415 from 1.2275 in a one way move ahead of the fix.
Oil was volatile. Prices tumbled on huge builds in US gasoline and products but that was mostly reversed on reports that Saudi Arabia has been sticking to its quotas. As far as I can see, the only way to trade oil right now is with your eyes glued to every news source in the world in hopes of getting a quick jump on an OPEC headline.
Gold rallied for the second day as the January bullish seasonals delivered once again. Naturally, the move was helped by the sinking dollar.
Some Fed speakers are on the agenda tomorrow but hawkish talk from Williams today couldn't lift the dollar so it might take something more to combat the flows.
For more on the USD move, see: All of a sudden the dollar looks in lots of trouble - What's gone wrong?
