Market Sentiment

Current Sentiment:
During yesterday’s NY session the recent volatility continued as uncertainty continues to be the dominant market theme. The EURUSD traded lower for the first half of the session reaching back below 1.1400 before rallying 139 pips into the end of NY trading. Perceived risk related to China continues to wreak havoc on US markets. The Dow, S&P, and Nasdaq all rallied through most of the session before collapsing again at the close. The USD (Index) traded without direction as well, rallying through the first half of the session, then giving back most of it’s gains into the close.

We heard chatter about the PBOC rate cut potentially sparking renewed interest in the euro/yuan carry trade, however we have serious doubts that this one action would be enough to generate that kind of confidence in this environment.

During Asia the New Zealand Trade Balance figures were released showing the July merchandise trade deficit was NZ$649 million, slightly better than expected. There was very little reaction from the kiwi.

Overall the market can be difficult to interpret in times like these. Traders will likely react strongly to any new information coming in from central banks and other officials, while daily data usually has less of an impact on prices.

Coming up today we have a very light calendar for London. After NY opens we will see the US Durable Goods prints, as well as a press conference by FOMC member Dudley, who is a voting member of the Fed.

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Source:: Market Sentiment