- Gold is down $8 to $1961
- WTI crude oil rose $1.27 to $76.92
- US 10-year yield 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 unplanned news to shock the market. Heavy options expiring in stocks and the Nasdaq rebalancing attracted some interest, but price action was finally subdued, though not entirely quiet.
The big driver on the day was what looks like a BOJ leak to Reuters that the BOJ has no plans to change the yield curve control next week. That triggered heavy yen selling across the board and a rise in USD/JPY to 141.95 before selling at the figure capped a near-200-pip rally. There was some consolidation early in US trade down to 141.26 but the pair lifted 50 pips from there in a second round of strength.
The US dollar was generally strong and especially so early in the day, as the euro and pound hit session lows at 1.1109 and 1.2817, respectively. It was a quick turnaround 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 store sales report. It suggests BOC hikes are starting to bite and the previous reading for June was once again flat. The lounie fell 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 pulled back only slightly.
NZD/USD was particularly hit 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-sized selling in the kiwi, taking it down to 0.6166 and only marginally outperforming the battered yen on Friday.
Next week is a big one, with rate decisions from the Fed, ECB and BOJ along with a busy week of earnings. Have a great weekend.