19 Feb 2015
US Session recap: FOMC minutes dominate leaving door open to June
FXStreet (Guatemala) - The US session was pretty subdued until he FOMC minutes were released allowing markets to dissect the verbiage and try to distinguish between hawkish and dovish language. All in all, the door has been left open for a rate hike as early as June although much of the language was eluding to holding rates as they are for longer by a data dependent Fed, and dropping language of "patient" was a concern that could lead to markets getting ahead of themselves and searching for a date of tightening.
The market got back behind stocks as the majority of the camp were on the lower for longer side of the market and the greenback suffered losses across the board. However, stocks ended up mixed on the session with only the NASDAQ composite gaining 0.14% on the day. The Dow Jones ended -0.10% and the S&P was lower by -0.03%. gold scored a high $1, 213 and remained in this region into the close vs a low of $1,197.
EUR/USD spiked up to retest the 1.14 handle from 1.1340 on the back of the Minutes and concerns over the Greek crisis was put on the shelf. The developments there around headlines that the Greeks are preparing to come forward tomorrow and request an extension by the deadline on Friday. The market is banking on a deal at the 11th hour and that has been supporting the euro from an outright collapse on sentiment otherwise.
GBP/USD had been bid into the US session on a neutral BoE set of minutes. However , the main take away showing was that the MPC members expect inflation to accelerate in 2016 once the impact of falling oil prices fades.
We also had the monthly employment report. this gave us a stabel looking backdrop to the economy with the unemployment rate coming in better at 5.7% for December vs 5.8% previous and expected. Moreover, wages outpaced inflation for second month in a row. From the move at 1.5359, the major managed a score of circa 120 pips, with the high made on the Minutes and short lived as the greenback found some traction again on lingering prospects of a June hike.
USD/JPY bears capitalised on the greenbacks weakness post the Minutes and took the pair down through the 119.00 level and scored a low of 118.53 before picking up demand to 118.78.
Key events:
FOMC Minutes: Dovish / neutral
January US PPI final demand -0.8% vs -0.4% consensus month / month
January US housing starts 1.065m vs 1.070m consensus
US industrial production +0.2% vs +0.3% expected
ECB approves emergency liquidity for Greek banks but only at EUR3.3B
The market got back behind stocks as the majority of the camp were on the lower for longer side of the market and the greenback suffered losses across the board. However, stocks ended up mixed on the session with only the NASDAQ composite gaining 0.14% on the day. The Dow Jones ended -0.10% and the S&P was lower by -0.03%. gold scored a high $1, 213 and remained in this region into the close vs a low of $1,197.
EUR/USD spiked up to retest the 1.14 handle from 1.1340 on the back of the Minutes and concerns over the Greek crisis was put on the shelf. The developments there around headlines that the Greeks are preparing to come forward tomorrow and request an extension by the deadline on Friday. The market is banking on a deal at the 11th hour and that has been supporting the euro from an outright collapse on sentiment otherwise.
GBP/USD had been bid into the US session on a neutral BoE set of minutes. However , the main take away showing was that the MPC members expect inflation to accelerate in 2016 once the impact of falling oil prices fades.
We also had the monthly employment report. this gave us a stabel looking backdrop to the economy with the unemployment rate coming in better at 5.7% for December vs 5.8% previous and expected. Moreover, wages outpaced inflation for second month in a row. From the move at 1.5359, the major managed a score of circa 120 pips, with the high made on the Minutes and short lived as the greenback found some traction again on lingering prospects of a June hike.
USD/JPY bears capitalised on the greenbacks weakness post the Minutes and took the pair down through the 119.00 level and scored a low of 118.53 before picking up demand to 118.78.
Key events:
FOMC Minutes: Dovish / neutral
January US PPI final demand -0.8% vs -0.4% consensus month / month
January US housing starts 1.065m vs 1.070m consensus
US industrial production +0.2% vs +0.3% expected
ECB approves emergency liquidity for Greek banks but only at EUR3.3B