Forex news and economic data headlines 12 September 2016
- USDCAD moves toward days lows
- How the FX market looks if you combine Friday and today
- The Fed's Brainard make six important points as she went to war with the hawks
- US stocks liking what Brainard has to say
- More Kashkari: The Fed will allow the balance sheet to shrink with growth (Brainard also answering questions)
- Fed's Brainard Q&A: Return from financial crisis is always slow
- Full text of the speech from the Fed's Brainard and live video
- Fed's Kashkari: Economic recovery has been slow, frustrating
- Federal Reserve's Brainard: Urges continued 'prudence' before hiking
- US sells 10-year notes at 1.699% vs 1.690% WI
- Forex technical analysis: EURGBP finding support buyers
- Preview: Will Brainard 'go full Bullard'?
- US CEO Economic outlook index less optimistic
- It was a bad day for European stocks but it had been a whole lot worse
- UK's Brexit minister says we'll take an empirical approach to decide exit strategy
- What's not to like about trading the Aussie when it plays like this?
- ECB QE count: Total PSP €1.0183tn vs 1.0019tn prior
- US stocks putting up a fight after early losses
- Fed should be working towards better communication says Lockhart
- Lockhart: Investment is being affected by a wide atmosphere of uncertainty
- The strongest and weakest currencies as NA traders enter for the day
- Fed's Kashari: Politics doesn't rear its head in Fed deliberations on policy
- Serious discussion on hike is needed at Sep meeting says Fed's Lockhart
The big event for the day was the speech from FOMC member Lael Brainard. She has been a dove, but would she paint a more hawkish opinion right before the week long blackout period by the Fed before their September meeting?
The answer to that question was "No". She had no interest in raising rates at all and outlines her concerns clearly (see Adam's post here). Needless to say, she has her talking points all lined up for next week and the other Fed governors will have to take her on with their talking points.
Fed's Kashkari and Fed's Lacker were also speaking today. Kashkari spoke on how fiscal policy was likely the next form of stimulus needed in the market as all the Fed stimulus bullets have been shot. Lacker suggested there would be a healthy debate at the next meeting on inflation and employment, and wondered whether a close to 0% rate was consistent with that situation.
The market wad more focused on the comments from Brainard. So the reaction was a softening of the dollar a bit in the NY afternoon. The stock market certainly liked the idea as S&P advanced 1.5% and the Nasdaq was about 1.7%
What currency pairs were the movers and shakers?
Pairs with JPY attached to the name. Each of the major crosses with the JPY extension ended lower (USDJPY. EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY all lower which is bullish for the JPY of course) That beiing said, the majority of the declines were before the NY session. In the NY sessions, the rising stock market helped those "risk pairs" recover w/ the AUDJPY, NZDJPY, GBPJPY, NZDJPY, CADJPY in particular rising. It was just hard to keep them down.
Now the rebounds were not so much driven by a rebound in the USDJPY. That pair remained closer to it's floor than moving up. Technically, the USDJPY spent all of the NY session below the 100 hour MA at the 102.016 level. That is the level that needs to be broken and remain broken if the pair is going higher - stock market recovery or no stock market recovery. On the downside, the Brainard comments were dollar negative. So the pair did tumble below a support level defined by the 200 bar MA on the 4-hour chart. A late day rally took the price above that level at the 101.80 level but not by much. However, maybe that was it. So watch that level too. A move below and the traders will be showing more downside potential.
NZDUSD...this pair rallied strongly and ended up reversing all the Asian Pacific and London morning declines (and then some). In the process, teh price moved above the 200 hour MA at the 0.7345 level. Stay above and the bulls remain in firm control. Move below and traders will be questioning the upside potential. Also keep an eye below at 0.7310. that was the high in August. Over the last 5-6 days, the price has been able to close above that level. Remember that level.
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