Morning Commentary: Entering the Gulag

Foreign Exchange - Morning Commentary
Entering the Gulag 
Share this story:
Facebook
Twitter
LinkedIn
Email
Alan Rose
Alan Rose
Foreign Exchange Senior Trader
Markets are continuing to consolidate and remain largely range bound and trapped within recent ranges (with the exception of oil prices). For the time being, markets have priced in enough negative news regarding the weakened state of the U.S. and global economy as investors look for the next guidepost which could come as early as next week’s Federal Reserve meeting on Wednesday. The U.S. dollar (DXY) has witnessed another day of low volatility and tight ranges.
 
Whether it is the U.S.-China trade talks, Brexit concerns, weakening global growth, or falling inflation, etc., investors remain anxious and nervous about the future path of the global economy. Continue to expect markets to remain on edge but confined to the same previous ranges until Wednesday’s FOMC meeting which could provide a short term spark. After yesterday’s soft U.S. CPI, market expectations have risen for the possibility of interest rate cuts for both the June and July FOMC meetings. G7 interest rates remain suppressed and are fractionally lower again today.
 
Oil prices have been the most volatile commodity over the past 48 hours relative to other commodities or asset classes. Yesterday, oil fell by nearly 4% on the back of reports indicating oil stockpiles rising to their highest levels since mid-2017. Today, that price decline is largely being reversed as two oil tankers have been damaged and suspected of being attacked in the straits of Hormuz. Other than the price of oil, expect more range bound price action.
HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:
  • Australia posted its May jobs data today. Job gains beat expectations rising by 43,200 but almost all of those job gains were part-time as opposed to full-time jobs. April job gains were revised higher, but once again, those gains were almost all part-time. The UR remained unchanged at 5.2% and the labor participation rate rose to 66%. Aussie interest rates are lower on the session.
  • The Swiss National Bank kept interest rates unchanged at -0.75% as largely expected. Markets were anticipating a dovish hold today with language and commentary citing increased risk to the Swiss and global economies. Instead, the language was more upbeat with upward, revised forecasts for growth and inflation. The Swiss franc is the top performing major currency today.
If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Facebook Twitter LinkedIn Google Plus YouTube
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Unsubscribe from this list  |  Update email preferences
This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list.
Copyright ©2019 City National Bank – All Rights Reserved.
350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071
City National Bank is a subsidiary of Royal Bank of Canada.
TERMS & CONDITIONS  |  PRIVACY STATEMENT
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC
                                                           

Comments

Popular posts from this blog

Fidelity: Bollinger band stock signal

Viewpoints: What to do after a data breach