U.S. Session Recap – May 29, 2014

  • U.S. 10-year Treasury bond yields drop below 2.50% to its lowest level since June 2013

No major reports? So what! With no major data scheduled from the U.S. or Canada, traders had sustained the risk aversion theme from the earlier trading sessions.

The euro continued to weaken against its counterparts after Germany printed weaker import and employment numbers. EUR/USD dropped 40 pips to 1.3590 before it stabilized while EUR/JPY also fell by 50 pips to 138.30 in the first hours of the U.S. trading session.

The pound was also hit by the risk aversion train as more traders tempered their long GBP positions. No data was released from the U.K. but GBP/USD fell by as much as 50 pips to its 1.5700 MaPs support in the first two hours of the trading session. GBP/JPY also dropped by 80 pips to the 169.90 area while GBP/AUD slipped by 60 pips to its new intraday lows near .8100.

Even the Greenback experienced pain as the U.S. 10-year bond yields dropped below 2.50% to its lowest level since late June 2013. The weakness is more pronounced in USD/JPY and USD/CHF, which both declined by 25-30 pips in the first hour of the trading session. USD/JPY closed at the 101.80 area while USD/CHF consolidated just below .8900 until the end of the day.

Will we see more action today? Japan had just released a weaker-than-expected retail sales report, which is probably why we’re seeing a bit of risk aversion and yen strength at the moment.

Then, at 1:30 am GMT we’re expected to see Australia’s quarterly private capital expenditure data. Analysts are expecting to see a 1.9% decline from the previous quarter’s 5.2% slip but a weaker number could set the tone for the comdolls for the rest of the Asian session.

Good luck and good trading!

See also:

London Session Recap

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