U.S. Session Recap – May 22, 2014

  • EZ consumer sentiment at -7 vs. -8 expected in April
  • FOMC minutes: Fed to continue tapering, now discussing normalization tools

Can you say recovery? The major currencies erased some or most of their European session moves as soon as the U.S. session started. No major data was released early in the trading session but some investors took profits ahead of the FOMC meeting minutes.

A quick look at the Fed’s minutes reveals that the central bankers are already discussing more ways to exit from their easy monetary policies. Don’t get too excited though. Yellen and her gang also hinted that the discussion is just “prudent planning,” and that we probably won’t see a rate hike anytime soon. For now, the Fed is content to simply continue tapering its asset purchases.

EUR/USD stabilized just above the 1.3650 area before the FOMC minutes’ release sent it back up to the 1.3680 levels. Meanwhile, USD/CHF and USD/JPY rose higher by around 30 and 60 pips respectively before the Fed’s minutes sent them back a few pips.

The comdolls also got some of the anti-dollar action with AUD/USD rising as much as 50 pips from the .9200 psychological zone while NZD/USD popped up by 30 pips. Even USD/CAD showed dollar weakness to the tune of 20 pips.

Up ahead we have China’s HSBC flash manufacturing PMI numbers. Analysts are expecting a 48.3 figure from last month’s 48.1 reading but a higher report could set a bullish tone for the comdolls during the Asian session.

It probably won’t take much to push the comdolls higher especially since Australia had already printed a positive MI inflation expectations report while Japan’s flash manufacturing PMI had a stronger reading than last month.

Also keep an eye out for New Zealand’s quarterly inflation expectations coming up at 3:00 am GMT. The RBNZ was expecting a 2.3% rate last quarter. Look out for any significant deviations that might signal a rate hike!

See also:

London Session Recap

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