It has been quite an active day in the markets with traders focusing on US inflation, energy inventories and FOMC minutes in addition to poor seasonality and ongoing concerns about China. US and European markets followed through on yesterday’s weakness in China and Japan as traders continue to wonder how much of an impact stock and currency market turbulence may have on China’s economy and what it could mean for resource demand Vietnam’s dong devaluation raised contagion fears giving gold and CHF an initial boost. Bulls remained subdued through the European session. Today’s FOMC minutes had a big impact on afternoon trading in US stocks and USD. Indices rebounded and USD sold off on the minutes which were released early, suggesting many traders saw them as dovish. The weakening USD gave gold a second wind enabling the yellow metal to continue pushing higher. Overall, the US economy was seen as steadily improving and FOMC discussions suggested conditions for a rate hike were nearly there but not quite. One member apparently was ready to dissent and vote for an increase but decided to hold off to see more data. Meanwhile, the minutes also suggested growing concern economic instability in China could have on the US. The question as to whether rate liftoff may come in September or not remains open although Fed members to appear adamant about taking their time after the first hike, suggesting they could take a one or two then done for a while approach. The other main centre of trading activity today has been in energy markets which saw crude oil take quite a tumble. A surprise increase in US crude oil inventories sparked a new round of selling pressure which was exacerbated by technical selling after WTI broke its March low. It did manage to hold above $40.00bbl for now but if that fails the 2008 low near $35.00 could be tested. The International Monetary Fund has extended the review of its SDR basket to September 2016 from December 2015. This move appears to be designed to give the market more time to prepare for CNY becoming a reserve currency and being added to the reserve basket alongside USD, JPY, GBP and EUR. Although there isn’t any news scheduled from China today, events there could continue to have a significant impact on trading across markets today. Corporate News NetApp $0.29 vs street $0.23, guides next Q EPS to $0.55-40.60 above street $0.46 Economic News Significant announcements released overnight include: Germany’s Bundestag ratifies the latest Greek bailout deal in a 454-113 vote US crude oil inventories street 2.6 mmbbls vs (0.75 mmbbls) US consumer prices 0.2% as expected US core CPI 1.8% as expected US avg real weekly earnings 2.2% vs previous 1.8% Upcoming significant announcements include: 11:00 am AEST NZ ANZ consumer confidence previous 113.9 7:00 am BST Germany producer prices street (1.3%) 8:30 am BST Sweden unemployment rate street 6.9% 9:00 am BST Norway Q2 GDP street (0.1%) 9:00 am BST Norway mainland Q2 GDP street 0.2% 1:00 pm BST National Bank of Poland minutes 9:30 am BST UK retail sales street 4.4% 9:30 am BST US retail ex auto and fuel street 4.3% 8:30 am EDT US jobless claims street 270K 10:00 am EDT US existing home sales street 5.43M 10:00 am EDT US Philadelphia Fed street 6.8 10:00 am EDT US leading index street 0.2% 10:30 am EDT US natural gas street 59 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 soars as USD tumbles and WTI crude oil crashes
01:00, 19 August 2015