Forex news for NY trading on May 12, 2020
- Stocks slide and tumble into the close. Major indices close near session lows.
- US CDC reports 1064 new deaths
- House Majority Leader Pelosi: Imperative to address needs of American people
- US reports record monthly budget deficit of $737.9B vs est. of $737.0B
- NY state deaths 195 new deaths, up 0.9% on the day
- US treasury auctions off $32B of 10 year notes at 0.700% vs 0.712% WI
- European indices close with mixed results
- OPEC+ source: OPEC+ wants to keep oil output cuts of 9.7 million BPD beyond June
- Dr. Fauci: US is in phase 1 clinical trial of a vaccine
- Feds Barkin: Theory of ETF purchases "A little bit of money, might settle things"
- Fed's Kashkari: Policymakers have been a pretty unanimous against negative rates
- Fed Harker: Q2 will be brutally painful
- Pres. Trump excited about $26 oil
- Fed's Kaplan: I would be against negative interest rates
- Fed's Bullard: Prolonged shutdown risks bankruptcy, depression
- US CPI for April MoM -0.8% versus -0.8% estimate
- The NZD is the strongest and the USD is the weakest as NA traders enter for the day
In other markets:
- Spot gold is up $4.19 or 0.25% $1702.12. The precious metal traded above and below the $1700 level today with a low of $1693.33 and a high at 1007 and $11.21
- WTI crude oil futures for July delivery rose 0.75% or 2.99% at $25.83. It's hi reached $26.23. The low price fell to $24.22
US CPI data today saw the index dropped most since the great recession. The fall in prices was attributed to lower gasoline and services including travel due to the coronavirus. The numbers showed a month-to-month decline of -0.8% versus -0.4% in March. The fall was the largest since December 2008. Making things even worse the core measure, which excludes food and energy costs, fell -0.4%. The decline was the largest one month drop going back to 1957. The year on year measure rose 1.4%. That was the lowest annual gain since 2011.
For the month gasoline prices plunge by -20.6%. The price of food did offset some of that decline as it rose by 2.6% as consumer stopped up on goods from grocery stores. Paper products posted record increases.
The fall in prices helped to send yields lower through the day with the yield curve flattening. The 2 year yield fell by -1.2 basis points while the 10 year yield declinedby -4.8 basis points.
US stocks opened higher but found sellers early on. A late day selloff, however, helped to push the S&P index and NASDAQ indices much lower with the S&P index and NASDAQ index falling by over 2% (and closing at the lows). The Dow industrial average declined by a slightly lower -1.89%. The index also closed near session lows for the day.
In the forex market today, the JPY was the strongest of the majors, while the GBP was the weakest. The USD - which was the weakest of the majors at the start of the day - ended the session mixed with gains vs the GBP, CAD, AUD and declines vs the EUR, JPY and CHF. The NZDUSD is settling near unchanged at of the interest rate decision in the new day by the RBNZ (no change expected).
A look as some specific pairs heading into the new day:
- EURUSD: The EURUSD moved higher early in the New York session with the pair spiking above its 200 hour moving average at 38.2% retracement near the 1.0863 level. The high price extended to 1.08845. That was just short of a swing high from May 5 at 1.08865. The gains above the technical levels could not be sustained and into the London close, the price moved back below each of those levels. The pair is closing near session lows at 1.0847
- USDJPY: The USDJPY fell in the Asian session only to rebound into the early European session. The price rise stalled against its 200 bar moving average on the 4 hour chart (sellers leaned against the level at 107.63) before stepping down in the New York session. The price closed the day near session lows at 107.14. On the downside, the 38.2% retracement of the move up from the low from last week comes in at 107.08. Just below that is the 100 bar moving average on the 4 hour chart at 107.028. Get below each and we could see further selling momentum.
- GBPUSD: The GBPUSD peak near the start of the New York session at 1.23767. That move - like the move in the EURUSD today - took the price above its 100 hour moving average (currently at 1.2350. However, the gains could not be sustained and the next 9 hours show declines in 8 of the last 9 trading hours. Initially there was support at the lows from last week at 1.22653. However after a rebound to 1.2293, the price wander lower closed near the session lows at 1.2263. (The low reached 1.2253). The April low reached 1.22465, and that will be the next target to get to and through. If done traders will behind the 1.2173 area. That is the 30.2% retracement of the move up from the March low.
- NZDUSD: As mentioned, the reserve Bank of New Zealand will likely keep the OCR rate on change at 0.25%. However expectations are for an increase in the Large-Scale Asset Purchase program. Technically, the price sold off in the New York session and moved toward its 50% midpoint of the move up from the May 7 low to the high prices seen yesterday. That level comes in at 0.60746 and is joined technically by the 200 hour moving average near that level. Into the new day- and interest rate decision - staying below would be more bearish. A move above the area at 0.60746 and the 100 hour moving average at 0.60860 would attract more buying momentum.
