Bullet Report – USD remains King, FOMC minutes show FED divided

Posted On 14 Oct 2016

Tag: Crude Oil, EURUSD, GBPUSD, Gold, USDJPY

Today’s financial calendar will remain thin. The most notable news announcements are US jobless claims and a FED member who is just scheduled to speak. Last night the FOMC Minutes from the September meeting were released. From analyzing them, it is evident that all FOMC members are strongly divided as to the timing of interest rates. The minutes basically affirmed the expectation of a December hike. Fed fund futures are pricing in 70% chance for that. Yesterday’s session was relatively mixed with Stock Markets suffering losses and the USD strengthening once again.

Currencies: Yesterday the GBPUSD dropped to lows of 1.21 only to rebound over 1.23 shortly afterwards. In the US session, the pressure was once again evident, with the pair dropping to 1.22 area on renewed Dollar strength. EURUSD also posted 2 month lows reaching as low as 1.10. Notable mover was USDJPY which posted multi month highs at 104.45 area. The pair dropped significantly in today’s Asian session after news that China exports have taken a big hit. USDJPY trades at 103.70 at time of writing. Overnight, the dollar continued to hover at seven-month highs against the other major currencies in quiet trade on Wednesday, as investors awaited the minutes of the Federal Reserve’s latest meeting amid mounting hopes for a 2016 U.S. rate hike.

Stocks: Asian shares fell on Thursday as trade data out of China disappointed investors hoping for signs of a rebound in global economic fortunes and as prospects for a 2016 rate hike by the Fed appear to be gathering pace. US stocks were mixed between small gains and losses. Just now, DAX has opened -1.17% lower in what seems to be yet another tough day for stock indices.

Oil and Gold: After days of consecutive gains, OIL prices retreated yesterday on news that OPEC said that its production had risen to its highest level in at least eight years and following reports of an increase in U.S. crude stockpiles. U.S. West Texas Intermediate (WTI) crude futures were down 34 cents, or 0.7%, at $49.84 per barrel. GOLD rose from $1251 lows which appears to be forming a strong support area to $1260 on news that Chinese economic data missed expectations.

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