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Markets:
Economic data wasn’t the driver of market moves on Tuesday but rather a missile strike by Iran in Israel. Reports so far don’t suggest casualties or damage but it’s early. Israel is also talking about a response so the market is waiting for that but fearing damage to Iran’s oil infrastructure.
The attack was either leaked by Iran or picked up by US/Israeli intelligence beforehand so the market moves came on the first warnings with strong bids in the yen and dollar. Gold and oil also benefited while US stocks went from modest losses to a 2% decline in the Nasdaq.
Layered into that was a strong JOLTS report that suggests the Fed won’t need to cut 50 bps in November. Still, we have some major data coming in the remainder of the week that will overshadow that data point, including Friday’s non-farm payrolls.
After the dust settled on the attacks, there was some dip buying that helped to lift commodity currencies and the pound but they remained below pre-attack levels, with the exception of CAD.
It was also the first day of the quarter so flows were a factor, particularly in fixed income.
This article was written by Adam Button at www.forexlive.com.
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