US Open Preview: Markets consolidate amid thin liquidity conditions

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  • US Open Preview: Markets consolidate amid thin liquidity conditions

    Here are the latest developments in global markets:

    • FOREX: The dollar was slightly lower against its major peers on Friday, ahead of the new quarter. The dollar index fell by 0.3% today, while it dropped more than 2% in the first quarter of 2018, its fifth consecutive quarter of declines. Dollar/yen declined by 0.26% in the day and remains slightly above the 106.00 handle. Euro/dollar and pound/dollar recovered some of the previous days’ losses, rising by 0.21% and 0.33% respectively. Antipodean currencies traded slightly higher, with aussie/dollar up at 0.7700 (+0.29%) and kiwi/dollar higher at 0.7245 (+0.10%). Dollar/loonie moved lower by 0.09% at 1.2865.
    • STOCK: Today is a public holiday in most of Europe and the US. European stocks closed in the green on Thursday, recovering some of their recent losses. US stocks rebounded strongly on Thursday, but the gains failed to translate into strength for any major currencies. Japanese stocks followed their US counterparts higher on Friday, though it should be noted that the Dow Jones, S&P 500, Nikkei 225 and Topix indices all finished the quarter lower.
    • COMMODITIES: In energy markets, West Texas Intermediate (WTI) crude oil and London-based Brent crude surged on Thursday as equity markets rallied. Today, WTI was up by 0.82% near $65 per barrel, while Brent climbed by 0.86% at $69.35 per barrel. In precious metals, copper jumped above the $3.00 level, rising by 0.36%. Gold prices slipped by 0.05% on Thursday, and are currently trading near $1324 per ounce.

    US Open Preview: Markets consolidate amid thin liquidity conditions

    Day ahead: Narrow ranges likely to prevail amid empty calendar and thin liquidity

    With no major data releases on the agenda for today, and no speeches by policymakers or any other economic event, narrow ranges could continue to prevail in FX markets. That said, liquidity is likely very thin currently with most European and US traders home for holidays, so if there was to be any piece of news – for instance any major tweets from the US President – it could have a disproportionally large market effect.

    Looking further out, the next week promises to be much more interesting. Although most markets will remain closed on Monday for another holiday, there is a raft of critical economic releases on the schedule – including the always-important US employment data. Once again, markets are likely to focus on the wages component of the report, as they try to gauge whether inflationary pressures are finally set to pick up. In Europe, investors will look to Eurozone’s preliminary CPI figures for a fresh indication of how the ECB is likely to act at its upcoming meetings, while in the UK, PMI surveys for March will show how the British economy finished the first quarter. In Australia, an RBA policy gathering will be in focus, with attention likely to be on whether the recent uncertainties around global trade are starting to concern policymakers.

    Source: Trade Forex with XM.

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