Market Wire Update:
Aug 18 09 09:10 EDT One worse than expected Producer Price Index number out of the U.S. reveals how fragile the sentiment is in oil and equity arenas, and low volume is allowing that sentiment to overshoot price points, on both sides of the Usd. Monthly PPI numbers showed the rate of inflation at the factory gate at -0.9%, down from 1.8%, while the core rate dropped from 0.5% to -0.1%, and was obviously not what equity and oil traders were looking to see. They were expecting a little more inflation in their pre-market action, and therefore stocks and oil were sold in the futures market, and the dollar was bought as the hedge against risk.
The major pairs are at the lows of their session against the Usd, ahead of the Wall Street open, and offer nothing other than volatility right now in how that are going to potentially react. TheLFB Signal Page is showing that USD/JPY gave back a session's worth of move in 5 minutes, as equity and oil direction show their dominance over the Usd direction. The scales dropped in the dollar's favor in the U.S. pre-market, but on volume that is sporadic, and price action that will need to see a very negative cash market in stocks to now make the next leg lower.