The 8.5% decline in gold from its mid June highs further confirms that the yellow metal remains in function of Gold/EUR dynamics and no longer an inverse play off the US dollar

Aussie faces downside against EUR, GBP, CAD and to a lesser extent AUD

The Reserve Bank of New Zealand is expected to raise its overnight rate by 25-bps (21:00 GMT) for the 1st time since the 2008-9 easing campaign. (more…)

US durable goods orders for June were the latest set of economic data to disappoint coming in at -1% against an expectation of 1% and look to have prompted some light profit-taking on recent capital moves in to riskier assets. The Federal Reserve in its beige book also pointed to a spluttering recovery with sluggish housing and weak consumer demand and this has also weighed on sentiment. (more…)

As the German and UK 10 year yields continue to gain relative to their US counterparts, it’s important to highlight the fact that EUR and GBP are more positively correlated to their respective bond yields than is USD to the yields  of the 10-year note. (more…)

The earnings versus macro economic data story continues to play havoc with risk appetite as capital rotated back into the greenback after yesterday’s poor US July consumer confidence figures. The figures came in at 50.4 against an expectation of 51 which prompted some profit-taking as investors became more risk-averse, sending crude oil to its biggest fall in 3 weeks.  (more…)

Yesterday was a tale of two central banks with the Bank of England minutes surprising the market with the news that Andrew Sentance, one of the members of the monetary policy committee wanted to raise rates by 0.25%, on concerns about the current high inflation rate. This caught the market by surprise and sent the pound to its highest levels since late January against a basket of currencies on fears that UK interest rates may have to rise this year. (more…)

Markets unwilling to extend the risk aversion trade beyond short-term parameters ahead of Friday’s European bank stress tests

New record lows in US 2-year yields (0.56%) have provided boosted yen’s safe have status, but the Swiss franc stands to reap fresh gains as Japanese officials make themselves heard (more…)

The euro received a nice boost yesterday on the back of some positive euro zone economic data which indicated that manufacturing growth exceeded expectations for July, while consumer confidence also improved, indicating a more positive growth outlook in Europe. (more…)

The euro received a nice boost yesterday on the back of some positive euro zone economic data which indicated that manufacturing growth exceeded expectations for July, while consumer confidence also improved, indicating a more positive growth outlook in Europe. (more…)

If Bernanke focuses on the implications of the Fed’s forecast then we could see broadening of USD weakness, if on the other hand Bernanke’s testimony highlighted the fundamentals of the Fed’s Forecasts then risk trades could be curtailed to the benefit of the Japanese currency

Oil Breaks 200-day MA ($77.40) for the first time since in 3 weeks (more…)