Forex trading news for April 11, 2017.
- US stocks end the down but what a comeback
- US agreed to clear military strike against North Korea with Japan
- US WTI Crude oil futures settle at $53.40 /bbl
- This is the chart that matters: US 10-year back below 2.30%
- Risk aversion wanes but the bid in gold stays
- Fed's Kashkari impassioned on education but no takeaways for traders
- Nine of 12 Fed banks wanted to hike discount rate ahead of meeting - Minutes
- Italy cuts 2017 deficit-to-GDP target to 2.1% from 2.3%
- US 10-year auctions at 2.332% vs 2.325% WI
- Oil jumps to session high on talk of OPEC quota extension
- Fitch affirms USA with AAA rating, stable outlook
- Gold boosted by lower dollar/geopolitical situation. Highest since November.
- Treasury unlikely to name China currency manipulator in FX report - WAPO
- OPEC compliance on quotas at 104% - report
- Le Pen promises to suspend Schengen but polls put her behind
- ECB's Visco: Inflation subdued in the eurozone, as a whole
- Fed's Williams: Need to bring rates back to normal this year and next
- Draghi: It's not appropriate to reflect on potential EU exits
- JOLTS job openings 5743K vs 5650K expected
- Russia: Syrian forces don't have chemical weapons
- The strongest and weakest currencies as NA traders enter for the day
A snapshot of the other markets:
- Crude oil: $53.43. Up $0.35 or +0.67%
- Spot gold up $20 to $1274.60
- 2 year yield 1.233%, -4 bp, 10 year yield 2.296% -7 bp, 30 year 2.927% -6 bp
- US stocks down but recover. S&P -0.14%. Nasdaq down -0.24%. Dow -0.03%
US interest rates were sharply lower with the 10 year note falling below support at 2.30% area.
Gold rallied by $20 or 1.59% on the lower US rates. Geopolitical concerns perhaps in the backs of traderss minds.
Stocks tumbled early with the Nasdaq down about 1.0% but ended the day down only -0.24%. When is a down day like an up day? Today was that kind of day.
So what is the catalyst for that action? The clock is ticking for the Trump trade - at least that seems to be what the bond market is betting on. It was not long ago that the market was keen on the Trump tax changes and the 10 year yield was pushing 2.60%. Trump had high powered executives to the White House and all were licking their chops at the prospect of less regulation, lower taxes, creating more jobs. Today one of those CEO meetings was held and once again the President promised good news on taxes. Is it coming? Will the CEOs lose the faith? That is the weight the bond market is carrying around. That and perhaps some safe haven flows from geopolitics.
What about the dollar and the currency markets?
The main action was in the USDJPY (and the JPY crosses). The USDJPY fell about 1.2% on the day. Lower yields kicked this pair lower as did the surging gold. What is a wonder is how does N. Korea fit in? Lobbing a bomb over the Sea of Japan does not fit in except if there is the repatriation of funds back to Japan. All the JPY pairs fell (higher JPY). Technically, the USDJPY did crack below the 110.26 and then the 110.10 support floors. That was the kick that sent the pair even lower in the US session. The low extended to 109.60. Support at 109.36 and then the 100 day MA at 108.61 on further selling.
Other JPY pairs were were also hit with EURJPY down 1.11%. the AUDJPY and NZDJPY (each down -1.25%), and the GBPJPY down -0.56%. They were the movers in trading today.
The EURUSD moved higher in the NY session and had the longs looking good on a break of both the 100 and 100 hour MA at 1.0623 (it was also the 50% of the 2017 trading range). Did it lead to higher levels? Only to a high of 1.06295. That's it? Yep. The price moved back to trade above and below 1.0600.
Below is a snapshot of the % changes of the major currencies vs each other. The strongest is the JPY. The weakest is the AUD. The USD was little changed against most pairs with the exception of the GBP and the JPY.
