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Oil drops lower whilst UK and US inflation data fails to have lasting impact

Summary:

  • Oil.WTI drops by more than 2% ahead of inventory data
  • US inflation rises but greenback fails to rally
  • Stock indices in the red
  • UK CPI comes in below forecast; GBP fairly mixed
  • CFTC data provides interesting insight into EURNZD and AUDJPY

 One of the biggest movers today has been oil, with WTI falling by more than 2% to trade at its lowest level since the start of the month.  The market has been in a fairly long term uptrend since making a low back in June. A technical overview for Oil.WTI can be found here. Traders will be keeping a close eye on the inventory data out of the US in the next 24 hours with the API inventories tonight acting as a precursor to tomorrow’s DOE number.

US PPI and the core reading both increased by 0.4% M/M with the release going some way to allaying fears that inflationary pressures were on the wane. This is the second consecutive monthly rise and should in theory support the US dollar. however, we haven’t witnessed this just yet with the USD dropping against most of its peers. Tomorrow’s CPI could be significant for the market.

It’s been another day of declines for the major stock indices with the DE30 and UK100 both shedding around half a percent by the time of the European cash close. Across the Atlantic the picture is slightly better although the US500, US30 and US100 are all lower on the day. 

The first important UK data scheduled for this week disappointed which put additional pressure on GBP. The headline CPI for October came in at +3.0% yoy (the same level as in September) missing consensus calling for +3.1% yoy. The core gauge also surprised to the downside: +2.7% yoy vs +2.8% yoy expected.

Bitcoin has been fairly subdued today given the wild recent swings. The cryptocurrency is making some small and steady gains of just more than 1% today but the market remains vulnerable following the large drop seen last week.

The CFTC data on positioning has traditionally provided a good update on a market situation on FX. This time due to the holiday delay the data arrived only on Monday so we take a look at two interesting cross pairs today; EURNZD and AUDJPY.

 

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