Forex news for Dec 7, 2015:
- November 2015 US labour market conditions 0.5 vs 1.6 exp
- US Oct consumer credit +$15.98B vs +$19.0B exp
- Fed's Bulllard: Sees inflation rising to 2% as energy shock fades
- UKs Osborne: Recent UK productivity is more encouraging
- Beijing announces first ever 'red alert' for smog
- Fed's Bullard: Markets have come to view Fed as ready to raise rates
- Fed's Bullard bemoans inaccurate Fed forecasts
- Russian econ minister says $50 forecast oil next year is realistic
- ECB QE: Total PSP €461.9bn vs €445.5bn prior
- Fitch says world economic growth still happening despite emerging market weakness
- Moscovici says EU economy is solid but growth not enough
- Gold down $16 to $1071
- WTI crude oil down $2.32 to $37.65
- US 10-year yields down 3.7 bps to 2.23%
- S&P 500 down 15 points to 2077
- USD leads, NZD lags
Oil cracked and it took the Canadian dollar with it. Similarly to the OPEC decision at this time last year, it took some time to set in before infecting the market with lasting negativity. The nearly 6% decline in oil today was a sign that oil longs are throwing in the towel and corporates are desperately hedging.
USD/CAD naturally rose on the oil news and climbed above 1.35 to a fresh cycle high. There is very little resistance for the pair from here and the ruling Liberal party today announced tax hikes on high earners in a move that markets won't like.
In general, the story was a US dollar recovery but it was tempered. The euro sank early but held 1.08 and made its way back to 1.0840 at the close.
The commodity bloc was where most of the pain was felt. AUD and NZD have been incredibly resilient to weak raw materials prices but it no-doubt has a limit as iron ore prices cratered through $40/tonne.
USD/JPY was a good example of the broad demand for US dollars. It finished the day a quarter cent higher despite lower yields and stocks. Last at 123.37.
