Forex news for Americas trading on October 1, 2019:
- US September ISM manufacturing index 47.8 vs 50.0 expected
- US September final Markit PMI 51.1 vs 51.0 expected
- Canada September Markit manufacturing PMI 51.1 vs 49.1 prior
- Canada July GDP 0.0% vs +0.1% m/m expected
- EU ready to consider time-limit on Irish backstop - report
- EU denies story that they are amenable to a time limit backstop agreement
- Boris Johnson: I hope we will 'get there' on Brexit in next few days
- Ecuador is leaving OPEC in January
- ECB Draghi: Timely, effective policy action is of the essence
- Boris Johnson: UK is very, very prepared to be flexible on Irish customs checks
- Honda US auto sales -14.1% in September vs -4.6% estimate
- New Zealand GDT price index +0.2%
Markets:
- Gold up $9 to $1481
- WTI crude down 45-cents to $53.62
- S&P 500 up 35 points to 2941
- US 10-year yields down 2.5 bps to 1.64%
- CHF leads, AUD lags
The tone in markets was good early in New York trade as yesterday's optimism spilled over into the new quarter. However it was undone by the big miss on ISM manufacturing. That immediately kicked off selling in USD/JPY that started with a 30 pip dip and extended to double that as stocks and yields fell. It finishes the day near the lows.
The general theme on the news was USD selling and that helped the euro rebound to 1.0938 from 1.0890 at the start of US trading.
Cable was bounced around by Brexit headlines. It had been soft early in Europe but a report suggesting the EU was chatting about a time-limited backstop sparked a rally to 1.2325 from 1.2240 however the top came quickly and it retraced from there. A deeper retracement to 1.2255 came after the denial but late in the day, it battled back above 1.2300 on the hope that something is in the works. The next two days will be huge.
USD/CAD jumped on soft Canadian GDP but the details of the report showed that a major offshore oil overhaul was part of the reason for the miss. The pair stalled ahead of 1.33 then started to slip on ISM despite pressure on oil. It continued lower to 1.3220 in a decent-sized reversal.
AUD/USD broke to 9-year lows early in US trade, hitting 0.6672 at the worst levels before battling back above the figure on USD selling. It's in a precarious spot as US-China trade talks continue.
