Forexlive Americas FX news wrap: Hot UMich inflation expectations cool Fed rate cut talk ...Middle East

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Forexlive Americas FX news wrap: Hot UMich inflation expectations cool Fed rate cut talk
UMich May prelim consumer sentiment 50.8 vs 53.4 expectedUS April housing starts 1.361m vs 1.365m expectedUS April import prices +0.1% vs -0.4% expectedJapan not keen for compromise in US trade talksTrump tax bill fails in House panelBaker Hughes US oil rig count -1Federal Reserve said to plan cuts of 10% of workforce over next several yearsSNB's Schlegel: Switzerland is not a currency manipulator

Markets:

WTI crude oil up 88-cents to $62.50US 10-year yields down 2.3 bps to 4.43%Gold down $46 to $3193S&P 500 up 0.6%USD leads, CHF lags

The FX market was lacklustre on Friday with no real driving force behind any of the moves. An earlier report about Japan balking at US trade negotiations didn't get much traction and the market was middling.

    It eventually sprang to life after the UMich report, which once again showed a dismal reading on consumer confidence but it was likely the continued surge in inflation expectations that caught the market's attention. That reversed a drop in yields and pared some of the Fed cut pricing seen in the market.

    With that, the US dollar found some decent bids and EUR/USD sank to 1.1131 from 1.1200. It was a broad move in the dollar that included a rise in USD/JPY to 146.05 from 145.45.

    As the day wore on, some US dollar sellers returned but the moves were modest.

    The bigger conclusion from markets this week is that the trade war has likely peaked, and I'm on board with that thinking. That doesn't mean it will be easy from here. It was a refreshingly quiet week in the latter half as Trump went to the Middle East and that helped to lift risk assets.

    It's probably too much to ask for more of the same next week.

    Have a great weekend.

    This article was written by Adam Button at www.forexlive.com.

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