The chaos and confusion currently on display inside the U.K. House of Commons, was replicated in the market for the U.K. pound versus its peers, during Thursday’s trading sessions. All sterling base pairs traded in tight ranges versus their counter currencies, as analysts and FX traders struggled with the complexity of the voting patterns and the meaning of the various votes.
By 18:30pm U.K. time, one decisive decision had been reached; the U.K. Parliament will be requesting a three month extension from the E.U. in order to push back the exit date, past the official March 29th legal deadline. However, sterling failed to rise, after the European Commission immediately issued a response to the vote, declaring that the E.U. would put its own interests first, when considering the request. At 19:15pm GBP/USD traded down 0.47% on the day at 1.322, still circa 320 pips above the 200 DMA, a level that was tested earlier during the trading week. The majority of sterling base pairs traded in extremely tight ranges, with a bearish bias, whilst EUR/GBP traded up 0.18% at 0.854.
Mixed economic calendar news for the USA economy, published during Thursday’s New York session, resulted in the main USA market indices capping the gains made earlier in the week. Import prices fell by -1.30% year on year up to February, whilst export prices rose by 0.60% in February and up 0.30% YoY, in line with the appreciating U.S. dollar making exports dearer and imports cheaper, for the USA economy. The latest USA unemployment claims, both weekly and continuous, missed the Reuters forecasts and coming so close to last week’s shock NFP jobs data, doubts are now being raised with regards to the overall strength of the USA jobs market and wider economy. Investors appeared to use Thursday’s data as a reason to take profits off the table.
At 20:00pm the SPX traded close to flat, but at 2,810 price still maintained position above the critical psyche handle of 2,800. NASDAQ traded down -0.18%. One stock collapsing, causing eyebrows to be raised in the investment community, involved Legacy Reserves, an oil exploration company formed to exploit oil and gas opportunities in the Permian, West Texas basin, in the USA. The stock fell by -58% on the day to 0.58 per share. Falling from a peak of circa 35.00, a total fall of circa 98.60%, the firm has lost billions in value. The fall could put into doubt the much hyped, supposed reserves available in the Permian basin. WTI oil traded up 0.58% at 20:30pm, posting new five monthly highs of $58.50 per barrel.
USD made gains versus several of its peers during Thursday’s trading sessions, as the risk off sentiment caused a moderate flight to the safe haven appeal of the globe’s reserve currency. The dollar index, DXY, traded up 0.30% at 96.78, threatening to breach the key 97.00 handle. EUR/USD traded down -0.27% at 1.130, USD/JPY traded up 0.49% at 111.70. USD/CHF traded close to flat, the Swiss franc made considerable gains versus many of its peers, after import prices rose by 0.20% in February. EUR/CHF traded down -0.17%, whilst GBP/CHF traded down -0.81%.
Friday March 15th is a busy day for economic calendar news events, however, the vast majority rank as low to medium level impact releases. The latest Eurozone CPI metrics will be published at 10:00am U.K. time, Reuters forecast a monthly rise to 0.30% MoM in February, with the annual figure rising to 1.5%, from 1.40%. These forecasts, if met, could cause interest and speculation in the euro to increase, as analysts will deduce that increased inflation could influence the ECB, with regards to their loose monetary policy.
During the New York trading session, the latest industrial and manufacturing production data for the month of February will be released at 13:15pm. Forecast to reveal a significant improvement from the negative readings registered in January, if the predictions are met, the U.S. dollar could experience increased activity, as the data might be translated as bullish for the USA economy.
At 14:00pm, the latest JOLTS figure will be broadcast, used as a measure for the health of the USA economy in terms of jobs, the figure reveals a snapshot of job openings throughout the USA. The prediction is for 7.225 million job openings in January. The day’s key, high impact event, involves the latest University of Michigan consumer sentiment survey for March. The forecast is for a reading of 95.6, rising from 93.8 in February. This well respected, legacy metric, has the power to move markets in the USA; both equity indices and the USD.
