The Fed repeatedly said its data dependent and trades have evidently taken it to heart as markets have grown extremely sensitive to economic data. It was on display Thursday as the US dollar fell in New York trading after a round of soft numbers. The Japanese services PPI and the all-industry index are due later. The Premium long in EURUSD opened on ECB Day just over 1.0600 is nearing the final target. NZDUSD, GBPAUD, EURGBP and GBPUSD are the other Premium trades
currently in progress.
During many periods, markets ignore the second and third tier US economic data and focus on the general trend but with the Fed undecided on raising rates and the market suddenly less-confident in a US growth pickup, every release is market moving. We can't remember a time – at least since 2007 – when markets were so hung-up on data.
On Thursday it was the combination of new home sales, initial jobless claims and the Markit PMI. All were moderately weaker than expected and combined to send the US dollar into a spiral. Stocks also rallied to a record high and Treasury yields slipped; the combination points to expectations of a more-dovish Fed.