One of the most perplexing things about the trading of the last few days had been despite growing signs that negotiations between the EU and Greece were going off the rails, gold had not responded. That has changed today with Gold staging a big 2.0% rally up toward the $1,200 level. With no discussions about Greece at today’s Eurogroup meeting and the IMF holding firm on its June 30th payment deadline, time appears to be rapidly running out for a new deal. Rumours of a possible statement on debt relief hasn’t had much impact with markets appearing increasingly tired of all the noise and waiting for things to come to a head. European indices are trading lower on the day while EUR is up against USD but otherwise running in the middle of the pack of major currencies. Greek treasury yields have climbed up to 12.5% while other European 10-year yields are falling indicating contagion concerns remain low. The other big story driving markets today has been the continued reaction to yesterday’s Fed meeting. Traders have taken the cut to the Fed’s GDP forecast and declining Fed funds projections as dovish, sending USD sharply lower and US stocks moderately higher. Although all majors are up against the greenback today there have been some interesting divergences within the resource group. NOK is underperforming other majors while CAD is near the top of the group. The loonie has benifitted from rising oil prices, while NOK has been depressed by the news that Norges Bank has cut interest rates as was widely expected. AUD is the top performer on the day while NZD is dragging behind near the bottom after New Zealand GDP came in below expectations keeping the pressure on the RBNZ to cut interest rates further. There’s more news due from the US later this morning and with more talk swirling around Greece, we could see significant market moves through the day. Corporate News Oracle $0.78 vs street $0.86, guides next Q to $0.59 below street $0.61 Economic News Significant announcements released overnight include: Norway interest rate 0.25% cut to 1.00% as expected Switzerland interest rate (0.75%) no change as expected US consumer prices 0.0% vs street 0.1% US core CPI 1.7% vs street 1.8% US jobless claims 267K vs street 277K UK retail sales 4.6% as expected UK retail ex auto and fuel 4.4% vs street 4.3% NZ GDP 2.6% vs street 3.1% Upcoming significant announcements include: 10:00 am EDT US Philadelphia Fed street 8.0 10:00 am EDT US leading index street 0.4% 10:30 am EDT US natural gas street 93 BCF CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Gold takes off on growing Grexit risk, dovish Fed boosts US stocks, AUD and CAD
20:00, 17 June 2015