Reaction to FOMC, RBNZ and earnings dominates trading
USD has continued to climb overnight following yesterday’s FOMC statement which delivered a relatively upbeat assessment of the US economy, and removed the last of the “considerable time” language on the timing of interest rate increases. The focus remained on the domestic economy with a small afterthought note on international conditions inserted that looks like an escape clause in case things really go off the rails than a serious concern. Overall, nothing really changed in the statement suggesting the Fed remains on course to start raising interest rates this year, crushing the hopes of traders who had thought the FOMC may take a more dovish turn.
On the other hand, AUD and NZD have been crushed overnight after the RBNZ shifted from slightly hawkish to firmly neutral stance on interest rates and aggressively tried to talk the Kiwi Dollar down again taking potshots like calling NZD’s level “unjustifiable” and “unsustained” and stating “we expect to see a further significant depreciation” which could be seen as another intervention threat. AUD declined in sympathy ahead of next week’s RBA meeting.
Stock markets are mixed today. US indices are bouncing back a bit getting some support from much better than expected jobless claims. Reaction to overnight and positioning for upcoming earnings reports may influence trading in a lot of individual stocks today.
In Europe, major indices are trading slightly lower as traders continue to digest the big events of the last week including the ECB stimulus program and the Greek election. Greek stocks are bouncing back this morning as the government backed away from some of the more aggressive statements made by its new ministers. Greek treasury yields dropped back under 10%.
With USD soaring again today, gold is getting knocked back along with most major paper currencies. Crude oil has stabilized with WTI still holding above its channel bottom near $44.00.
Facebook $0.54 vs street $0.48, revenues $3.85B vs street $3.78B, mobile $2.48B vs street $2.36B,
Qualcomm $1.34 vs street $1.26, guides next Q to $1.28-$1.40 vs street $1.28, cuts Sept year guidance to $2.75-$5.05 from $5.05-$5.35 and below street $5.20, blaming a second half slowdown in its Semiconductor business and more competition in China
Citrix Systems $1.10 vs street $1.03, guides next Q to $0.70-$0.72 below street $0.80, cutting 900 positions
ConocoPhillips $0.60 vs street $0.59
Phillips 66 $1.63 vs street $1.39
Valero Energy $1.83 vs street $1.30
Ford $0.26 vs street $0.22
Potash Corp. $0.49 vs street $0.47, guides next Q to $0.45-$0.55 vs street $0.51, guides year to $1.90-$2.20 vs street $2.12, raises dividend by 8.6%
Methanex $0.85 vs street $1.09, sales $733M below street $859M
US jobless claims 265K vs street 300K
UK Nationwide house prices 6.8% vs street 6.6%
Spain retail sales 6.5% vs street 2.5%
Sweden consumer confidence 98.6 vs street 100.0
Sweden retail sales 3.4% vs street 4.2%
Germany unemployment change (9K) vs street (10K)
Germany unemployment rate 5.8% vs street 6.5%
Germany consumer prices (0.3%) vs street (0.1%)
NZ trade balance ($159M) vs street $75M
Australia leading index 0.1% vs previous (0.2%)
Japan retail sales (0.3%) vs street 0.9%
Economic reports due later today include:
10:00 am EST US pending home sales street 10.8%
10:30 am EST US natural gas street (111 BCF)