A strong rally for USD ahead of Fed Budget Statement

Thursday, November 12, 2015

Today, the main focus will switch to the release of the weekly jobless claims as well as the monthly Fed Budget Statement, which will set the tone for today’s trading session. Fed Chair Janet Yellen will deliver a speech at a Fed conference at 14:30 GMT, providing an insight regarding the current US economic conditions and prospects. The USD index extended gains this morning, breaking above the 99.0 area against a basket of currencies.

A strong USD rally ahead of Fed Budget Statement

DXY Curncy (DOLLAR INDEX SPOT)   2015-11-12 09-08-19

Asian equity markets were mixed overnight. The Hang Seng index rallied over 500 points (+2.40%) towards 22,900, while the Nikkei index edged slightly higher towards 19,700. On the other hand, the Shanghai composite index remained in negative territory after retreating 0.50% towards 3630.

European equity markets came under renewed pressure this morning, as the DAX, CAC, IBEX and London equity benchmark indices retreated between 0.60% and 0.90% in early trade. The EUR continues its consolidation mode around 1.07050 against the US dollar, struggling for direction. German CPI was reported flat at 0.0% m/m in October, while the y/y figure was unchanged at 0.3%, in line with expectations. In the UK, RICS house prices surged 49% in October compared to a 44% rise in September, beating analysts’ expectations. Sterling slid slightly lower this morning, hovering around 1.5200 against the dollar.   

UK RICS House prices

UKRXPBAL Index (RICS England & W 2015-11-12 09-05-57

Crude oil prices declined sharply yesterday, as a strong dollar and persistent concerns over global supply glut add further pressure to the market. WTI front month futures hovered around $43 per barrel this morning, while Brent futures remained under pressure after trading below $46 per barrel. As the US markets were closed yesterday for Veteran’s Day public holiday, the release of the weekly EIA oil inventories report will be published today. According to a Bloomberg survey, a small increase of 790K barrels is expected in crude oil inventories, while distillate and gasoline inventories are estimated to have dropped by 959K and 1.26 mln barrels, respectively. However, the release of the weekly API oil inventories report yesterday showed larger inventory builds than expected.

WTI front month futures hover around $43/barrel ahead of the weekly EIA inventories data

CLZ5 Comdty (WTI CRUDE FUTURE  D 2015-11-12 09-04-28

 

Events for today:

0001

UK

Oct

RICS House Prices

0700

DE

Oct

CPI

1000

EZ

Sep

Industrial Production

1330

US

w/e

Jobless Claims

1530

US

w/e

EIA Nat Gas

1600

US

w/e

EIA Energy Stocks

1900

US

Oct

Fed Budget

 

All times UK Local Time

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