News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
More View more
Real Time News
  • WTI crude oil prices (WTI) lost 4.7% so far this week. Demand concerns and a rising US Dollar sent crude oil prices lower on Thursday. Cloudy economic recovery prospects weighed on sentiment, despite falling US crude inventories. https://t.co/nVHCe4DX3g
  • Based on recent price action in the US Dollar, might... $USDSGD $USDMYR $USDPHP $USDIDR ...be heading higher next? Check out my latest #ASEAN technical update here - https://www.dailyfx.com/forex/technical/article/special_report/2020/09/24/US-Dollar-Comeback-Ahead-USDSGD-USDMYR-USDPHP-USDIDR.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/9sIQFVeydt
  • Wall Street Futures Update: Dow Jones (-0.393%) S&P 500 (-0.418%) Nasdaq 100 (-0.653%) [delayed] -BBG
  • An economic calendar is a resource that allows traders to learn about important economic information scheduled to be released. Stay up to date on the most important global economic data here: https://t.co/JdvW6HNuqV https://t.co/FXpr6RibWT
  • Markets attempted pull risk trends out of their dive this past session, but sentiment (via $SPX) ultimately returned to its bearish course. Meanwhile, $EURUSD is consistent with its reversal. My video for today: https://www.dailyfx.com/forex/video/daily_news_report/2020/09/24/EURUSD-Extends-its-Dive-as-Late-Day-Selloff-Puts-SP-500-On-Verge-of-Correction.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/Q6JZKW2B1y
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.57%, while traders in EUR/GBP are at opposite extremes with 64.76%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/JHNAiIgVLv
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: 0.11% 🇪🇺EUR: -0.02% 🇯🇵JPY: -0.06% 🇨🇦CAD: -0.08% 🇳🇿NZD: -0.22% 🇦🇺AUD: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/im3IxxDQ3y
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.15% US 500: 0.12% FTSE 100: -0.94% Germany 30: -1.00% France 40: -1.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/X6mMfIY6HW
  • The US Dollar, British Pound, and Euro will all be closely watching key geopolitical developments in North America (Powell testimony), the UK (Brexit talks) and Europe (EU summit). Get your market update from @ZabelinDimitri here:https://t.co/q4AJW6PTCu https://t.co/e0rwBFOnqX
  • RT @stlouisfed: The current recession has in many ways been more extreme than the Great Depression, yet the economy is projected to recover…
2 Primary Catalysts for Market Volatility

2 Primary Catalysts for Market Volatility

2013-06-21 14:17:00
Kathy Lien, Technical Strategist
Share:

Markets have been quiet today, but big moves seen in world equity, currency, and bond markets have been driven by the latest policy moves by the Federal Reserve and People’s Bank of China.

After big moves in the financial markets this week, currencies and equities are trading quietly today with Japanese stocks rebounding overnight, European shares moving higher, and US equity futures pointing to a positive open.

The dollar continued to trade higher against all major currencies, but the gains are modest so far compared to the past 48 hours. There is no US data on the economic calendar, but investors were relieved that the People's Bank of China (PBoC) finally stepped in to ease China’s growing credit crunch.

There are two primary catalysts for the recent volatility in the markets: 1) The Federal Reserve's plans to taper asset purchases later this year, and 2) The big spike in overnight lending rates in China.

As we wrote here yesterday, overnight SHIBOR (Shanghai Interbank Offered Rate)—China's version of LIBOR—spiked to a record high of 13.44%, up from 7.66% the previous day.

Thanks to liquidity injections by the PBoC last night, however, the rate has fallen 495 basis points to 8.492%. While this is still more than double last month's rate, it is a huge relief for China’s markets as well as those abroad because it suggests that the central bank is no longer punishing speculators by holding the market hostage.

Since the Dragon Boat holiday two weeks ago, China has been in an ever-worsening credit crunch, and instead of easing liquidity like they normally do during the holidays, the PBoC stood on the sidelines with arms crossed. Chinese experts said this was the central bank's way of punishing speculators and banks for over-lending and putting themselves in a cash-shortage situation.

While today's action still keeps cash expensive in China, the deep-pocketed central bank's willingness to help stem the shortage means it is not completely hard-nosed, but nonetheless, banks and speculators shouldn't expect the PBoC to be as generous as it has been in the past.

Greek Problems Resurface

Meanwhile, renewed political troubles in Greece are weighing on the euro. According to party officials, Greece's small Democratic Left Party could pull out of the ruling coalition.

In addition, the International Monetary Fund (IMF) threatened to suspend aid to Greece at the end of June if Eurozone leaders do not close the financing gap in the Greek aid program. Eurozone finance ministers did not address the issue at their latest meeting on Thursday.

Latest Canadian Data Disappoints

The Canadian dollar (CAD) also traded lower against the US dollar (USD) after Canadian retail sales and consumer price growth fell short of expectations.

Despite significant improvements in the labor market, Canadian retail sales grew only 0.1% in April, and excluding autos, consumption fell 0.3%. CPI, on the other hand, grew only 0.2% compared to a 0.4% forecast.

These weaker economic reports will keep monetary policy steady and limit the optimism of new Bank of Canada (BoC) Governor Stephen Poloz.

By Kathy Lien of BK Asset Management

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES