Markets:
- Gold down $8 to $1961
- WTI crude oil up $1.27 to $76.92
- US 10-year yields down 1.7 bps to 3.83%
- S&P 500 down 2 points to 4564
- CHF leads, JPY lags
The economic calendar was light and there was little in the way of unscheduled news to jar the market. Heavy options expiries in stocks and the Nasdaq rebalancing drew some interest but price action was ultimately subdued, though not entirely quiet.
The big mover on the day was what looks like a BOJ leak to Reuters that the BOJ isn’t planning to change up yield curve control next week. That kicked off big yen sales across the board and a rise in USD/JPY to 141.95 before sales at the figure capped an almost-200 pip rally. There was some consolidation early in US trade down to 141.26 but the pair rose 50 pips from there in a second round of strength.
The US dollar was generally strong and particularly so early in the day as the euro and pound hit session lows at 1.1109 and 1.2817, respectively. It’s been a quick reversal in cable in a sixth-straight decline after touching a one-year high last week. The softer UK CPI data was undoubtedly the main economic data point of the week.
For Canada though, it was today’s softer retail sales report. It hints that BOC hikes are beginning to bite and the advance reading for June was flat again. The loonie slumped on the results despite a strong day for oil (which touched above the 200dma). USD/CAD rose 50 pips on the results to 1.3226 at the high and only backing off slightly.
NZD/USD was hit particularly hard this week, despite a high inflation reading. The market isn’t impressed with what China has offered in terms of stimulus so far and it’s been six straight days of good-size selling in the kiwi, taking it down to 0.6166 and only slightly outperforming the battered yen on Friday.
The week ahead is a big one, with rate decisions from the Fed, ECB and BOJ along with a busy week of earnings. Have a great weekend.