Forex news for trading on November 1, 2017
- BOC's Poloz reiterates central bank to be 'cautious' on next rate hike
- Some of the earnings after the close. Facebook beats.
- Fed appoints a new secretary for FOMC
- US stocks end the session mixed/off highs
- October US auto sales cruise past estimates
- UK Defense Secretary Michael Fallon resigns - report
- The technical sellers find a reason to dump oil
- SNB's Zurbruegg: Franc highly valued
- Full statement from the Federal Reserve November 2017 policy meeting
- FOMC holds rates at 1.00%-1.25%
- Goldman raise US payroll estimate to 340K from 325K
- FOMC preview: Views from 10 firms
- OPEC likely to keep quotas in place through 2018 - report
- German Dax soars to record close (gapped too). Other European indices are mixed
- US Rep Diane Black says tax plan to be released at 9 am ET Thursday
- Trump says he will announced Fed chair Thursday afternoon
- It's early but the Atlanta Fed GDPNow tracker is optimistic about Q4
- Sell the fact on the BOE?
- What's priced in for the Bank of England
- EIA US weekly oil inventories -2435K vs -1300K expected
- US construction spending for September 0.3% vs. -0.2% estimate
- October ISM manufacturing index 58.7 vs 59.5 expected
- October final Markit US manufacturing PMI 54.6 vs 54.5 expected
- Canada Oct Markit manufacturing PMI 54.3 vs 55.0 prior
- The snapshot of the major currencies shows the NZD is the strongest and the JPY is the weakest
- Beckner: Financial conditions could play an important role in FOMC decision
A snapshot of other markets near the day's end shows:
- Spot gold at $1276.17, up $5.17 or 0.4%
- WTI crude oil at $54.28 down $.10 on the day or -0.18%
- US yields are trading mostly lower with a flatter your curve: 2-year yield 1.607%, up 0.8 . 5-year 2.0099%, down 0.6 basis points. 10 year 2.3649%, -1.4 basis points. 30 year 2.855%, -2.4 basis points
- US stocks end of the day next. S&P index of 4.1 points or 0.16%. NASDAQ index down 11.13 points or -0.17%. Dow up 57.77 points or 0.25%.
The FOMC kept rates unchanged at 1% – 1.25% as per expectations. The statement was a bit more hawkish, keeping the December rate hike firmly in play. The market has priced in an 92.3% chance the Fed will hike in December. Unless there is a sharp fall off in economic activity over the next month, or an unforeseen event (war, crash, etc), the Fed will hike one last time before Janet Yellen leaves the Fed in February (assuming they don't hike in January 2017).
The Fed characterized economic activity as rising at a "solid rate" despite storms (i.e. the hurricanes) and said growth in business fixed investment has picked up in recent quarters. They did say that inflation remains soft, but measures of longer-term inflation expectations are little changed.
The dollar initially dipped after the headlines but recovered, ending the day mixed. It fell against the commodity currencies today with the NZD leading the currency table. The NZD benefited from a stronger employment report at the start of the day yesterday. The AUD and CAD were also higher on the day vs the greenback. Those three currencies have seen their value go down over the near term (in fact those three currencies were the biggest losers on Tuesday). Today was a recovery day for those currencies. We will see if we get some follow through in the new trading day.
The market focus will now shift to the BOE decision tomorrow with the expectations for a hike nearly fully priced in. Also tomorrow will be long awaited tax reform plan will be announced tomorrow and the announcement that Fed governor Powell will be taking over the reigns of the Fed from Yellen in February. After that, the focus will shift to something not really certain. The US labor department will release the October Non Farm Payroll report with expectations of a rebound to 313K from the hurricane influenced -33K last month.
As a result, of the events, the markets might be a little more choppy going forward. I would expect the focus tomorrow to be dominated by reaction to the BOE comments/statement.
