Forex news for NY trading on October 11, 2018
- Saved by the bell for the 2nd day in a row. Stocks end with big losses again.
- US committed to fair and reciprocal trade with China
- Not surprising I guess...US State Department not aware of release of US pastor - Reuters
- Remember: Key bank earnings tomorrow morning
- Washington Post. Trump and Xi agree to meet in November
- UK PM May: Briefed her inner cabinet that historic Brexit deal is close (FT)
- ECB sources: Won't come to Italy's rescue if government, banks run out of cash
- Brexit backstop talks are likely to continue until November
- Fed's George. Gradual rate hikes are likely needed
- US sells 30 year bonds at 3.344%. Below WI level
- DoubleLines Gundlach: Rates a big part of sell-off
- China won't be named currency manipulator - report
- Want $20 per barrel oil? Go to Canada
- Trump says he is not going to fire Powell
- European stock indices end day with substantial declines
- Japan fin min official: Must consider some kind of response if market moves remain very volatile
- European equity close: Late selling adds to woes
- Japan finance minister Aso: Global economy on firm note
- Crude oil inventories show a build up 5987K versus 2800K expected
- Gold breaks the late-August high after $20 jump
- Kudlow: Powell is on target
- China looking into joining Trans-Pacific trade pact - report
- Trump to hold meeting with China's Xi at G20 in November - report
- EU's Malmstrom: Exploring the idea of not negotiating with US on trade
- Canada new housing price index for August 0.0% versus 0.1% expected
- US initial jobless claims 214K versus 207K expected
- US September CPI +2.3% vs +2.4% y/y expected
- The NZD is the strongest. The USD is the weakest as NA traders enter for the day
In other markets, the near end of day snapshot is showing:
- Spot gold up $29 to $1224. After rising only about $4 yesterday despite the tumble in stocks, today buyers piled in on the 2nd big day lower. Flight to safety? Probably some of that as portfolios see rotations out of stocks, into bonds and perhaps even gold
- WTI crude suffered again on concerns about global growth. The price is down -$2.31 or -3.16% at $70.85. There was also a surprise build of inventories for the 2nd consecutive week +5987K and +7975K in back to back weeks.
- Bitcoin on Coinbase fell -$351.13 at $6181.71 and broke away from the 100 and 200 hour MAs and 100 and 200 day MAs as well.
In the US debt market today, yields were up early. US CPI came out weaker than expected. Yields moved lower but stayed positive. Stocks sold off,and the 30 year auction was a winner with strong demand (give it an "A"). That sent yields lower. The long end benefited the most with the 30 year down -3.2 bps and the 2-10 flattening by about -2.3 bps.
Below is the snapshot of the changes and ranges for the current yields for the day.
In Europe today, yields closed mixed with flows into the safety of German, France and UK.
As mentioned, traders breathed a sigh of relief near the start of the North American session when CPI data came out a touch weaker than expectations. The headline number was up 0.1% vs 0.2%. The core was also weaker than expectations at 0.1% vs 0.2%. Those smaller month on month increases flowed through to the YoY numbers as well.
Coming off the 3-4% declines in the stocks yesterday, and futures implying more weakness, the market was relieved and worked toward unchanged near the openings.
A report out of the White House that Trump and China's Xi would meet at the G20 in November, sent the stocks to the highs for the day.
A short time later, however, Larry Kudlow - a Trump economic adviser - appeared on CNBC and took the steam out of the idea that a formal meeting was agreed. The two leaders - who according to Trump have a great relationship - are likely to meet (after all they both will be at the same event), but no formal meeting was agreed.
Stocks reversed and stepped lower.
Although the major indices did not close at the lows like they did yesterday, the closing levels were still down by hefty amounts. The Dow and S&P closed down over -2% and the Nasdaq fell by -1.25%. The second verse may not have been the same as the first (i.e. yesterday's trading) but it was certainly not that great.
Moreover, each of the major indices close below their 200 day MAs.
- Nasdaq 200 day is at 7500. Closed at 7329.
- S&P 200 day MA is at 2765. Closed at 2728.37
- Dow 200 day is at 25426.74. Closed at 25052.
If there is any consolation, indications are in after trading stock ETFs are trading higher by about 0.7% to 0.8%. Bank earnings for JPMorgan, Citi, Wells Fargo and PNC will be announced before the opening. Can they save the day or will the week end on it's back?
In the forex market today, there was a lot of ups and downs. The winners though, even in a down, risk-off market, were the AUD and the NZD. On the downside, the USD was the weakest of the majors although in the NY session, most of the action was up and down in most of the pairs. With all the action in the stock markets, the traders in the forex market seemed more content to move higher and lower, and watch the fireworks in the stocks (or maybe even trade those markets instead).
