Markets:
- Gold fell $8 to $1,961
- WTI Crude Oil rose $1.27 to $76.92
- US 10-year yields fell 1.7 basis points to 3.83%
- The S&P 500 dropped 2 points, to 4,564
- The Swiss Franc advances, the Japanese Yen lags
The economic calendar was light and there was very little unscheduled news to shake up the market. The expiration of stock-heavy options and the Nasdaq rebalancing attracted some interest, but price action was ultimately subdued, though not entirely calm.
The biggest driver of the day was what looked like a BoJ leak to Reuters that the BoJ is not planning to change yield curve control next week. This kicked off a massive yen sell-off across the board and USD/JPY rose to 141.95 before sales capped off at that figure, up almost 200 pips. There was some consolidation early in US trade down to 141.26 but the pair rose 50 pips from there in a second round of strength.
The US Dollar was generally strong especially early in the day as the Euro and the Pound reached session lows of 1.1109 and 1.2817 respectively. It was a quick reversal in Cable for its sixth straight decline after touching a one-year high last week. Undoubtedly the weaker UK CPI data was the main economic data point this week.
But for Canada, it was a softer retail sales report today. It hints that the BOC’s gains are starting to pay off and the advance reading for June was flat again. The Canadian Dollar declined in results despite a strong day for Oil (which touched above 200dma). USD/CAD rose 50 pips on the results, to 1.3226 at the top and only retreated slightly.
The NZD/USD has been hit particularly hard this week, despite a higher inflation reading. The market has been unaffected by what China has provided in terms of stimulus so far and there have been six consecutive days of good volume selling in the Kiwi, sending it down to 0.6166 and the Yen slightly outperforming on Friday.
Next week is a big one, with interest rate decisions from the Federal Reserve, European Central Bank and Bank of Japan along with an earnings-packed week. I wish you a nice weekend.