FX Insights

OVERVIEW

    Equities nose-dived on Wednesday as oil briefly traded below USD30/bbl following the release of US weekly crude oil inventory figures that showed another large inventory build. US Treasuries saw yields falling, with the 2-year yield pushing lower towards 0.90%, and the 10-year yield below the 2.10%-mark.

    There were no major economic data releases out of the US, apart from the modestly wider-than-expected federal deficit in December (revenues rose a modest 3.5% y/y in Q4) and a rise in the MBA’s weekly new purchase mortgage applications index. Separately, the Fed’s Beige Book, prepared by the Philadelphia Fed, reported that economic activity expanded in nine of the twelve Districts over the review period, with growth generally described as ‘modest’ or ‘moderate’.

    The US calendar on Thursday is dominated by weekly jobless claims and December import prices. The St Louis Fed’s James Bullard will speak to the Economic Club of Memphis. On the corporate front JP Morgan will report Q4 earnings before the NY open whilst Intel Corp will report after the bell.