Markets eye US data as Trump pulls out of Iran deal

May 9, 2018

A relatively quieter Wednesday than usual but there is still data around that can cause market movements.

USD-paired currencies continue to weaken, but the rate of decline seems to be slowing down somewhat. The EUR/USD was the hardest hit, with the possibility of a new Italian election weighing the euro down. The pair peaked at $1.19387 a short time after opening. From then on however, it was mainly downhill. It steadily fell until it hit a low of $1.18369 before recovering some of those losses. It is currently trading at $1.18662. The GBP/USD suffered a similar fate but was able to do a better recovery job. The pair reached a high of $1.35924 early before tumbling of the next few hours to a low of $1.34833. It regained much of those losses as it is currently trading at $1.35521.

The Dow continued to show wild movements, in a sign that it remains unsure of which way it wants to go. It weakened early before spiking in late trading. It reached a height of 24,393.27, then took a turn for the worse as it fell to a low of 24,171.42. It regained most of those losses however, currently trading at 24,322.00. The Dax was able to defy the Dow and the possible political upheaval in Italy to close the session in the green. After dipping to a low of 12,855.20 in late trading, it managed to rally into the close. The Dax closed at 12,932.60.

The day ahead seems to be quieter for a Wednesday, but that doesn’t mean traders can afford to take their eyes off the markets. The most significant piece of data set for release today is the US PPI figure. The reflects the change in price of finished goods and services sold by producers. This figure contributes to wider inflation within the economy as price increases indicate stronger consumer demand. The other event to look closely at is Donald Trump’s decision to pull out of the nuclear deal with Iran. While it was expected that Trump would do this, this may have further implications around the world, including oil prices, as further instability and tensions could return to the middle east again. Other data set for release today includes:

Canada – Building Permits

Europe – French Industrial Production, Italian Retail Sales

UK – RICS House Price Balance

US – Core PPI, Final Wholesale Inventories, Crude Oil Inventories

Japan – Leading Indicators, Bank Lending, Current Account, BoJ Summary of Opinions

NZ – Official Cash Rate, RBNZ Monetary Policy Statement, RBNZ Rate Statement, RBNZ Press Conference

 

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