Trader Daily Market Update

Trader Daily Market Update

Volatility continued across multiple asset classes yesterday, despite the lack of any tier-one economic data, as risk aversion remains to be the main theme. The USD-Index sold off 0.7%, while oil slid nearly 6% instigating USDCAD to initially fall by more than 1% before retracing some of the losses and ending the day at 1.3870. Meanwhile, investors piled into safe-haven currencies as USDJPY fell below 115 for the first time since November 2014, while USDCHF fell to levels not seen since late October of 2015. The rise in the Yen, which has caused USDJPY to collapse by nearly 6% in the last 7 trading days, was further accelerated in the last two days by the fact that 10-year Japanese bonds traded for the first time on record with a negative yield, joining Swiss bonds as the only 10-year bonds to have a negative yield.

Manufacturing production out of the UK is forecasted to show another dismal month, expected to show no growth month-on-month following two consecutive months of negative growth. The main event for today however will come during the North American session when Fed Chair Janet Yellen gets set to testify in front of the House Financial Services Committee. The main question for Fed Chair Yellen remains; is the threat of a global recession risking the US’ economy? The answer is a little more difficult, though the risk is for Janet Yellen to sound more dovish as US economic data has become more pessimistic, the options markets are now expecting the next interest-rate hike out of the US to come in mid-2017 and global financial markets are on the brink of officially entering into bear market.

*spot prices as of 07:00GMT

Daily Forecasts consists of both technical and fundamental analysis as well as a review of open sources from major FX contributors.