Calm before another storm?

<p>The dollar consolidates in a low volume Asian session following the losses seen yesterday as S&P futures and the US 10-year yield trade in a […]</p>

The dollar consolidates in a low volume Asian session following the losses seen yesterday as S&P futures and the US 10-year yield trade in a less volatile manner. The market is in a defensive, risk averse mode as the fear factor moves to US economy, which was one of the only bright spots in the global growth picture. It seems the cliché ‘The US sneezes and the rest of the world catches a cold’ is working in reverse as the latest catalyst for concern came from a slightly weaker retail sales number. I personally feel this didn’t  warrant a 34 basis point drop in the US 10-year treasury yield (largest intraday move in 20 years) but that just shows how nervous and heavily positioned the market is.

The NZD showed further signs of stability in the dollar sell off. New Zealand’s dairy farmers breathed a sigh of relief as the GDT dairy auction produced a 1.4% increase in average prices yesterday following a 7.3% decline in the previous auction.

The data events today consist of harmonised EU CPI data where the consensus look for a reading of 0.3% versus the previous outcome of 0.4%. The US session brings us a host of secondary readings with initial jobless claims, capacity utilisation, industrial and manufacturing production along with the Philly fed survey at 3pm London time.



Supports 1.2750-1.2680-1.2620   | Resistance 1.2850-1.2890-1.2950



Supports 105.20-105.05-104.50   Resistance 106.80-107.50-108.00



Supports 1.5885-1.5855-1.5785  Resistance 1.6050-1.6085-1.6130



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