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Corrective Cycle Still In Play


Approaching Recent Highs

FOREX: Equities welcome earnings, trade deal with new alltime highs
- The signing of the phase one trade deal with China provided few new details
for markets, but equities traded well regardless. The S&P500 hit a new alltime
high while generally positive risk sentiment worked against the greenback,
flattering most major pairs and the AUD in particular. Some participants eyed
Trump's criticism of the still-strong US dollar, but a lower, flatter Treasury
yield curve had already begun sapping the greenback ahead of Trump's presser.
- CHF gained further still Wednesday, hitting new multi-year lows as markets
look to continue to pressure the SNB's perceived tolerance band for the
currency. EUR/CHF fell to new lows of 1.0742 on the fifth anniversary of the
Bank withdrawing the 1.20 floor, keeping focus on support at 1.0632. Elsewhere,
GBP erased initial weakness on the back of weak inflation numbers, but markets
still eye a high chance of a rate cut as soon as January's meeting.
- The data calendar is quieter Thursday, with few data releases until US retail
sales and weekly US jobless claims numbers. ECB President Lagarde is scheduled
to speak in Frankfurt.
MNI London Bureau | +44 203-865-3809 |