Friday August 11, 2017 - 16:25:29 GMT
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Can The Dollar Continue To Stabilize Against The Euro?
John M. Bland, MBA
EURUSD Shows Tentative Stability The latest week was slow on scheduled news releases but the geo-political threat posed by the potential North Korean nuclear threat began to impact the markets. Equity markets were already thought to be overbought by many stock analysts, and the North Korean threat became a pretext for reducing equity exposures. In general, this risk-off bias tended to be a pro-USD influence. Lower equity prices saw a run back into fixed income instruments and drove the yield on the 10-yr yield lower. The yield on the 10-yr note continued to try to struggle trying to take out the 2.300% line. Late in the week, the 10-yr Note was hovering close to the 2.20% level by the end of the week. Tension about North Korea eased a touch after Russian Foreign Minister Lavrov said that Russia does not accept a nuclear armed North Korea, and that Russia have a plan to diffuse the crisis. I am interested to see what he has to say next. He also indicated that Russia is doing all it can to avert a conflict on the Korean Peninsula.
Softer Than Expected U.S. CPI Keeps Fed Rate Hike On The Back Burner The July U.S. CPI came in a bit softer than predicted, but not significantly so. While the major Fed inflation target is the Core PCE Deflator at 2.00% it also keeps a close eye on a variety of other price measures. At the top of that list certainly has to be the Consumer Price Index (CPI), which was released for the month of July early on Friday. It came in softer than expected and fueled more speculation that another rate hike this year is becoming less probable. I think the odds another rate hike before 2018 are very low. A more probable course of action will be for the central bank to take advantage of the low current level of interest rates to reduce the massive supply of bonds from its balance sheet.
Amazing Trader EVENT RISK Calendar: Tue 15 Aug
08:30 GB- CPI
12:30 US- Retail Sales
Wed 16 Aug
08:30 GB- Employment
09:00 EZ- GDP
12:30 US- Housing Starts & Permots
14:30 US- EIA Crude
Thu 17 Aug
08:30 US- Retail Sales
09:00 US- Final HICP
12:30 US- Weekly Jobless
13:15 US- Industrial Production
Fri 18 Aug
12:30 CA- CPI
14:00 US- University Of Michigan (prelim)
Be sure to refer daily Global-View to see the continuously UPDATED Economic Calendar and the Forex Forum for the complete list of key items (actual data, selected charts, etc.) as they are released.
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