Dollar Knifed, Carney With a Dagger
Mark Carney put a few more pounds in the pockets Britons traveling to Brazil for the World Cup as he boosted GBP saying rates could rise sooner than markets expect. The pound still trailed the kiwi as the top performer of the day while the US dollar lagged. The BOJ meeting is next.
It was one of the better trading days in recent memory as sharp & often sustained moved hit most charts. The late-day wasn't Croatia scoring the first goal of the World Cup, it was Carney saying the BOE could raise rates sooner than markets expect.
The headline came as Brits were settling in for the opening kickoff and the pound shot a cent higher to 1.6938 in a hurry. That puts it squarely within range of 1.7000, a level that held in early May.
Cable had been higher for most of the day as the US dollar was roundly trounced. Risk aversion is growing more country-focused and that was on display as a retail sales and jobless claims data hurt the US dollar. The buck fell further as an ultra-strong bond auction sapped yields and stocks slumped.
USD/JPY broke below Wednesday's low of 101.86 and slipped to 101.61 but, importantly, didn't break below the 200-day moving average.
The other moves were in commodities. We warned yesterday about the shocking turn of events in Iraq and the consequences for oil. It played out Friday as leaders scramble to diffuse a volatile situation. WTI crude ripped through the March high of $105.25 and all the way to $106.90. Brent hit $113.34.
The focus now shifts to Japan. The final April Japanese industrial production report is at 0430 GMT but the highlight is the BOJ meeting decision at some time between 0330 GMT and 0530 GMT. Little is expected and hopes for more stimulus this year are beginning to fade. Local newswires reported that officials will upgrade their view of overseas economies and US employment. That kind of optimism would further dent the chances of more QE.
|Retail Sales (MAY) (m/m)|
|0.3%||0.6%||0.5%||Jun 12 12:30|
|Industrial Production (APR) (m/m)|
|-2.5%||0.7%||Jun 13 4:30|
|Industrial Production (APR) (y/y)|
|7.4%||Jun 13 4:30|
|Employment Change s.a. (MAY)|
|-4,800||10,000||10,300||Jun 12 1:30|
|Fulltime employment (MAY)|
|22,200||14,200||Jun 12 1:30|
|Unemployment Rate s.a. (MAY)|
|5.8%||5.9%||5.8%||Jun 12 1:30|
|Part-time employment (MAY)|
|-27,000||0||Jun 12 1:30|
|Continuing Jobless Claims|
|2,614K||2,598K||2,603K||Jun 12 12:30|
|Initial Jobless Claims|
|317K||310K||313K||Jun 12 12:30|
|Jobless Claims 4-Week Avg.|
|315.25K||310.50K||Jun 12 12:30|
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