Market Snapshot – Choppy Action as Fundamentals And Data Collide

Heaps of Volatility

There has been much volatility in the markets today as a combination of geopolitical tension and economic data has kept the markets on knife edge and we are likely to continue to see this kind of action through till the close today. This could also be a result of all the pent up consolidation and ranging that we have been seeing in the various pairs ever since the beginning of the week and therefore we are seeing some major unwinding of positions opening of new ones as well. The geopolitical tensions continue between North Korea and the US with the war of words not showing any signs of abating anytime soon. We have North Korea issuing statements early in the morning and then we have Trump tweeting back his responses in the evening and this has kept the market on tenterhooks for a large part of this week.

CPI Data Disappoints

With the tensions in the background, the focus of the market, as far as the economic data is concerned, was firmly on the CPI data that was to be released from the US. The inflation data is a key parameter for the Fed to make a decision on when to make the next rate hike and hence this data was keenly anticipated. The data came out weaker at 0.1% while the expected value was 0.2% and this was largely a disappointment for the markets as it meant that the recovery that seemed possible due to the strong NFP data last week was broken to pieces and this made the dollar weaker across the board. But this also led to a recovery in the US stock markets which meant that we are currently having some highly choppy action in the markets.