Intraday Market Thoughts

Philly Fires Up Dollar, Crimea Simmers

by Adam Button
Mar 20, 2014 23:10

A solid reading on the Philly Fed survey helped markets forget the threat of rate hikes, while threats in Crimea lose their impact. The solid data continued to underpin the US dollar and it was the top performer while the euro lagged. The Asia-Pacific calendar is quiet as the week winds down. Friday's North America session will be dominated by the twin release of Canadian retail sales and CPI, which will be highly scrutinized after BoC governor Poloz's soft guidance for inflation.

The Philly Fed rose to +9 compared to +3.8 expected and helped the US dollar to the highs of the day despite the employment component at the lowest since June 2013. On the data, EUR/USD broke below 1.3750 briefly and cable hit a one-month low of 1.6480. Both pair later rebounded and US trading ranges were tight overall.

Other economic data included initial jobless claims at 320K versus 325K expected and existing home sales in line with estimates at 4.60M.

The Crimean crisis continues to simmer but traders are having a difficult time envisioning the scenario escalating. The US added 20 names and a small bank to the sanctions list and Russia immediately responded by imposing similar sanctions against high-ranking politicians. In effect, it's all political theatre with the vast bulk, if not all, of the assets out of each other's reach.

It's difficult to see real economic sanctions unless Russia invades Eastern Ukraine and the Russian defense minister reportedly told the Pentagon in a call Thursday that troops will not enter Ukraine. Even headlines of militias seizing Ukrainian ships failed to rattle the market.

2 USDCAD, 1 CADJPY and 1 AUDCAD Premium trades are currently in progress ahead of the twic Canadian releases. Both USDCAD longs are currently netting 260 pips. All these are in the latest Premium Insights.
Act Exp Prev GMT
Retail Sales (JAN) (m/m)
0.7% -1.8% Mar 21 12:30
Retail Sales ex Autos (JAN) (m/m)
0.9% -1.4% Mar 21 12:30
BoC CPI Core (FEB) (m/m)
0.5% 0.2% Mar 21 12:30
CPI (FEB) (m/m)
0.6% 0.3% Mar 21 12:30
CPI - Core (FEB) (m/m)
0.2% Mar 21 12:30
BoC CPI Core (FEB) (y/y)
1.1% 1.4% Mar 21 12:30
CPI (FEB) (y/y)
0.9% 1.5% Mar 21 12:30
Existing Home Sales
4.60M 4.60M 4.62M Mar 20 14:00
Existing Home Sales (m/m)
-0.4% 0.4% -5.1% Mar 20 14:00
Initial Jobless Claims (MAR 14)
320K 325K 315K Mar 20 12:30
Continuing Jobless Claims (MAR 7)
2.889M 2.868M 2.848M Mar 20 12:30
Philadelphia Fed Manufacturing Survey (FEB)
9.0 4.0 -6.3 Mar 20 14:00

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