market:
- CAD leads, JPY lags
- S&P500 fell 0.1%
- US 10-year bond yield rose 1.5bps to 4.15%
- Gold falls $1 to 2018 dollars
- WTI crude oil rose $0.81 to $78.17
The market didn't know exactly what to do with the US PCE report. On the hawkish side, his headline PCE numbers weren't as cool as GDP suggests, and personal incomes were solid. On the dovish side, core PCE headlines were weak, with six-month annualized numbers below the Fed's target. The market initially moved in both directions, but has settled somewhere in the middle.
Bonds fell as well, but the front end ultimately pushed yields higher, perhaps in anticipation of next week's announcement of a larger bid. This caused the dollar to rise slightly, but ultimately the euro and pound only rose by 7 pips and fell by 7 pips, respectively.
The yen lagged, partly due to weak Tokyo CPI data last week. Markets are also struggling with the outlook for global inflation, and the rate hike cycle is thought to be turning into at most two or three “normalization” rate hikes. USD/JPY rose above 148 and lasted to 148.20 before settling around this number.
Maybe it's because TMX announced plans for a linefill, but the lunatic has fared better, mainly because of higher oil prices. Oil prices have been volatile, but the recent news of a tanker being hit by a missile and catching fire in the Red Sea certainly didn't have a negative impact on oil. USD/CAD he fell to 1.3415 and finally he rebounded to 1.3447.
After a big mid-week rally, the Australian dollar was not so lucky as Chinese sentiment retreated. The market needs continued good news to dispel the recession, and today showed how big of a battle it can be. AUD/USD reached 0.6610, forming a minor double top with yesterday's high, before ending the day slightly lower at 0.6580.
Have a great weekend! Next week will be a big weekend.
