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Forexlive Americas FX news wrap 13 Aug: Tame US PPI spurs on dollar selling/stock buying | Forexlive

US PPI data came in tamer than expectations with a rise of 0.1% vs 0.2%. The YoY fell to 2.2% from 2.7%. The core ex food and energy was down to 2.4% from 3.0%. That is good news and although it does not necessarily translate into a better CPI tomorrow, hope springs eternal.

The data helped to send yields lower and weaken the USD. The greenback fell the most vs the NZD (ahead of the rate decision), the GBP and the AUD. It was near unchange vs the CHF.

The UK employment data released before the US open, showed surprising strength. That helped to strengthen the GBP in trading today. The GBP was just behind the NZD (and just ahead of the AUD) as the strongest of the major currencies.

The NZD and the AUD benefitted from risk on flows. The RBNZ will meet and announce its rate decision in the new trading day. There is some debate on a cut or not with a Reuters survey pegging 5.4% (from the current 5.5%).

US yields were encouraged by the inflation data, ending the day lower with the shorter end down the most.:

  • 2 year 3.935%, -8.1 basis points
  • 5 year 3.673%, -7.6 basis points
  • 10 year 3.848%, -6.3 basis points
  • 30 year 41.60%, -3.8 basis points

The US stocks also cheered on the data with the Nasdaq rising over 400 points and closing above its 100-day MA for the 1st time since August 1.

The final numbers are showing:

  • Dow Industrial Average rose 408.63 points or 1.04% at 39765.63.
  • S&P index rose 90.06 points or 1.69% at 5434.44 .
  • NASDAQ index rose 407.00 points or 2.43% at 17187.61

The INformation technology sector of the S&P surged by 3.0% while energy sector fell by -1.0% despite increased tension in the middle east.

Crude oil is trading down -$1.42 or -1.79% at $78.68 after testing its 100-day MA at session highs (see chart below). The low for the day also tested its 200-day MA. Buyers and seller are playing the 100/200 day MA range – at least for the day – with traders looking for the next break and mometum in the direction of the break.