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Global market watch - 15th February 2019

USD  

The Buck is trading mixed this morning, but is broadly firmer as this week comes to a close despite the largest single month drop in domestic Retail Sales figures since 2009 released yesterday as the apprehension of a potential global economic slowdown grows leading to some risk aversion and a flight to quality.  Trade negotiations between the US and China seem to be more positive at the moment, with talks scheduled to continue into next week.  President Donald Trump is reportedly prepared to sign a bill to avoid another Federal government shutdown, but he also plans to call an emergency over the US-Mexican border with news he will attempt to use unilateral executive authority to spend more than $8B on a wall for the Southern border.

The Buck touched a fresh three-month high versus the Euro this morning, is largely sideways against the Loonie as WTI Crude Oil touched a fresh ten-day peak today, the Buck lost some modest ground to Sterling but Cable remains in striking distance of its one-month low from yesterday, fell a bit against Swissy but USDCHF remains extremely close to its three-month peak form yesterday, fell off its 49-day high versus the Yen form yesterday on waning risk tolerance, was sideways against the Aussie Dollar but did fall to a nine-day low in its pairing with the rallying Kiwi overnight, while it remains in striking distance of a five-week high versus the Mexican peso form yesterday.  Domestic Industrial Production MoM follows the release of the Empire State Manufacturing Index and Import Prices MoM this morning.

CAD

The Canadian Dollar is trading largely sideways versus the Buck this morning after losing some ground in general this week as WTI Crude Oil is at a ten-day high but Canadian Foreign Securities Purchases were a significantly disappointing -18.96B compared to a +7.66B consensus which is also much lower than +9.45B from the reading last month. This data follows the disappointing Manufacturing Sales MoM yesterday along with NHPI MoM on target but at 0.0% as well. That said, the Loonie rallied very close to its 2.5-month high versus the Euro form yesterday after EURCAD hit a one-week high in domestic trading as well yesterday, while GBPCAD is just shy of its one-month low from yesterday as well.

EUR

The single currency fell to a fresh three-month low versus the Buck this morning for a moment, is trading within a few ticks of its December 3 trough against the Loonie form yesterday, while it edged a bit lower in its pairing with the Pound after EURGBP managed a 25-day peak yesterday. Eurozone Trade Balance was released exactly on target at 15.6B this morning with an upward revision to 15.8B from 15.1B for the reading last month, but recent data has been fueling broad expectations of a euro area slowdown recently.

GBP

The British Pound is trading a touch higher versus the Buck, Loonie, and Euro after hitting key lows against all three yesterday as Retail Sales MoM data was significantly better than anticipated at +1.0% versus +0.2% forecast consensus, with a +0.2% positive revision to -0.7% previous. Sterling was sold to a one-month low versus the Greenback and Canadian Dollar along with a 25-day trough against the Euro yesterday as Prime Minister Theresa May suffered another key defeat in Parliament yesterday as her Brexit plan B, which is very similar to her plan A, lost the support of Tory Brexiteers. The next important vote will take place on February 27th, when there will be an attempt to take no-deal off the table. Goldman Sachs suggests that there is currently a majority in the House of Commons to avoid a no deal. If the government is again defeated on February 27th, it could well lead to a long and expensive extension to Article 50. If not, then Brexit will go to the wire.

RoW

The Dollar was largely sideways versus the Aussie overnight while falling to a fresh one-week low in its pairing with the rally Kiwi today.   The antipodeans had a generally decent week as a result of overall firm risk aversion reflected by rising equities, the less dovish than expected Reserve Bank of New Zealand (RBNZ) monetary policy announcement this week, firm oil prices, along with positive sentiment regarding ongoing US trade negotiations with China set to continue into next week.

The Yen managed to gain some ground on global uncertainty this morning, rising to a four-day high versus the Buck, yet is markedly softer on the week as rising equities reflected generally firmer risk appetite.  

The Swiss Franc managed to firm a bit after hitting a fresh three-month low versus the buck yesterday but has pared back a lot of those gains on the falling Euro this morning. 

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