Markets are quiet this morning as traders gear up for a possible eventful afternoon with the FOMC meeting minutes. News overnight highlighted a few currencies:
GBP - 1.6155
The UK MPC voted 6-3 to keep rates on hold. There continues to be a tug of war between the wait and see approach versus those members who want immediate hikes. The three members who want to hike interest rates feel warranted by the higher than expected inflation number, which came out 4.5% vs. 4.2% forecast vs. 4.0% previous yesterday morning. BOE members Martin Weale and Spencer Dale see case for rate rise as finely balanced given weak real economy, uncertain outlook. Rumors were floating around that Weale was switching his vote, but as usual this rumor ended up being just that, a rumor.
UK unemployment claims (claimant count change) unexpectedly rose, 12.4k vs. .4k forecast vs. 6.4k previous, weighing on the currency. At first GPBUSD saw a 25 pip rise on both the MPC meeting minutes and the Claimant count change, which would be characterized as a knee-jerk reaction. Ten minutes later the currency precipitously dropped 138 pips from 1.6248 to 1.6110, new monthly low.
All GBP crosses have seen a leg down:
GBPUSD down 95 pips @ 1.6155, GPBJPY down 127 pips @ 131.03 EURGBP up 50 pips @ .8810, GPBCHF down 83 pips @ 1.4225, and GBPAUD down 45pips @ 1.5245
EUR - 1.4220
A few ECB speakers, BINI-SMAGHI and NOWOTNY made some hawkish statements overnight however the impact on price action was muted.
CAD - .9745
Canada's leading index m/m came out as expected .8% vs. .8% forecast vs. .8% previous. However, wholesale sales m/m implied a different picture. Sales were weaker than expected .1% vs. 1.3% vs. -.6%.
NZD - .7870
Overnight New Zealand's saw producer input prices rise higher than expected, 2.2% vs. .9% forecast vs. .9% previous. Even though Inflation numbers came out higher no one is jumping the gun in changing their mind frame from keeping interest rates at bay to increasing them.
AUD - 1.0590
Australia saw both Westpac consumer sentiment and wage price index q/q decrease which weighed on the currency overnight. Westpac consumer sentiment: -1.3% vs. 1.2% previous. Wage price index: .8% vs. 1.2% forecast vs. 1.0% previous.
Intermarket Analysis -
US equities are flat this morning while commodities are up. Gold is higher by 10pts (.72%), silver up 1pt (2.85%), and oil up 1pt (1.12%).