G7 Baffles Traders

A comedy of mixed messages from the G7 led to a choppy day of trading in the yen crosses. Ultimately, the yen was the top performer on the day while the pound lagged. Australian consumer confidence data is a highlight of the upcoming session.The latest from our Premium trades has EURGBP, AUDJPY and US Crude oil hitting all of their final targets at 0.8630, 96.60 and 97.70 respectively. USDCAD long missed its final 1.0098 target by 11 pips, while CADJPY long remained unfilled after missing the entry by pips. Both EURUSD remain in progress, so does the silver short and the other long US crude. The gold long was stopped out by 1 point at 1640. For those remaining trades, please see latest Premium Insights.

The G7 statement devolved into a circus with traders caught in the middle on Tuesday. The original statement made no mention of Japan as a problem and that was interpreted as a signal that concerns weren't at a high level.

An unnamed G7 official then released a separate statement saying markets misinterpreted the official comment. That sent USD/JPY crashing a full cent and eventually as low as 92.95.

Later, an unnamed UK official seemed to counter that, saying the original statement wasn't about any particular currency or country. Afterwards, USD/JPY rebounded above 93.50.

At the same time, the euro was climbing after comments from Draghi. The ECB leader didn't make any particular pronouncements about monetary policy but indicated the economy is improving. The euro climbed as high as 1.3475.

At 1830 ET, Westpac releases Feb consumer confidence for Australia. With markets so unsure about the next RBA move every data point is important. The market is pricing in a 56% chance of a rate cut on March 5.

Twenty minutes later, Japan releases the corporate goods price index for January. Expectations are for a 0.3% year-over-year decline but the report is unlikely to move the markets. At the same time, the Dec tertiary industry index is expected up 0.7%.