U.S. Session Recap – June 13, 2014

  • US headline retail sales shows 0.3% rise in May vs. 0.6% uptick expected. April’s data revised from 0.1% to 0.5%
  • US core retail sales rises by 0.1% vs. 0.4% expected and previous
  • US initial jobless claims at 317K vs. 310K expected and 313K previous
  • BOE’s Carney: interest rates could rise sooner than expected
  • RBNZ’s McDermott predicts rates will rise by another 0.5% this year

We saw a healthy dose of volatility during the U.S. forex trading session as traders priced in a tier 1 report from the U.S. and a change in stance from some major central banks.

The Kiwi continued to inch higher against its counterparts after the RBNZ not only raised its rates by 0.25% but also hinted at more rate hikes to come. NZD/USD registered another 9-pip gain to .8687 while AUD/NZD also ticked 9 pips higher to 1.0848.

Forex traders also paid attention to the pound, which enjoyed a nice rally after yesterday’s better-than-expected U.K. employment data. You see, the report renewed speculations of another BOE rate hike.

And looks like market players were right to speculate! In a speech right when the U.S. markets are closing, BOE Governor Mark Carney said that there are less signs of slowdown in the pace of expansion than the BOE had estimated and that interest rates could rise “sooner than markets currently expect.” Booyah!

Not surprisingly, it was the dollar that became the punching bag for the currency bears. A weaker-than-expected retail sales report is not doing favors in speeding up the Fed’s tapering schedule, which is probably why the U.S. equities and bond yields also took hits throughout the session.

USD/JPY fell by 42 pips to 101.66, USD/CHF dropped 24 pips to .8977, and the US Dollar Index slipped by 21 points to 81.051. Yikes!

We have a couple of tier 1 reports to end the week so don’t leave your screens just yet! The BOJ is set to announce its monetary policy decisions, which is expected to contain optimism for the economy. China is also scheduled to print its industrial production, fixed asset investment, and retail sales numbers at 5:30 am GMT. Market players are looking for slightly better numbers from last month, but keep your eyes peeled for data misses!

See also:

London Session Recap

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