Fundamental Analysis 2017.08.14 – JPY CHF Safe Havens on the Rise Again This Week?

Market recap
Markets seemed to recover slightly from last week’s war of words between the US and N. Korea. Most of Trump’s administration tried to mediate the frictions between the two nations –Asian stocks recovered after the dip they experienced due to the N. Korean/US war of words, including South Korea, and even US Treasury bond yields saw a slight increase after sentiment calmed, pointing towards a conservative “risk-on” trading mentality.

The side-effects of this though was CHF and JPY which flourished the last week, fell significantly today while commodity currencies took the spotlight of market sentiment. If the political situation continues to settle – then safe-havens such as JPY and CHF will inevitably continue to drop.

US CPI data came in under expectation causing the USD to lose against the stronger (and possibly strengthening) EUR . A further effect of this was markets revising downwards their expectation that the Fed will increase rates.

On Friday oil prices increased largely due to a weaker dollar, and saw a further boost when threats put oil production in jeopardy in one of Libya’s biggest oil fields. Of course oil lacks data to support its boost, which might change when IEA announces its estimates on Friday.

Today’s market
Today the Japanese GDP and Chinese data have already been released – and lack of other indicators, means a quiet trading day.

On a different hemisphere, the EU industrial production, which is unlikely to have markets clamoring to buy or sell. Its affect is generally miniscule and temporary.



Tuesday will start a little earlier than usual with the German second quarter GDP data. The initial EU-wide second quarter GDP has already been released, even so, the German GDP usually has an impact on markets due its scale within the European market. German GDP is higher than EU-wide GDP suggesting toward room for acceleration of EU-wide activity.









This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.

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