Forex news for NY trading on December 13, 2018
- US stocks finish flat after up-and-down day
- What's on the US economic calendar Friday
- Still no love in Bitcoin land
- WTI crude oil nears the highs of the week
- New Zealand November REINZ house sales +7.1% y/y
- French central bank cuts growth forecasts
- US November monthly budget deficit $204.9 billion vs $100.5 billion in October
- An 'aspiration end date' isn't going to be enough for a Brexit deal
- US sells 30-year bonds at 3.165% vs 3.170% WI bid
- ECB debated changing balance of risk assessment, some wanted more caution - report
- Saudi Arabia said to target US with sharp oil export cut
- Moscovici: Italy has made 'significant effort' on its budget
- European equity close: Spain leads, France lags
- Trump told by Justice Dept to stay out of Huawei CFO case
- Looks like a shutdown: Schumer says no more funding for Trump's wall
- ECB releases details on reinvestment plans
- Draghi Q&A: We have continued confidence with increasing caution
- Draghi: Balance of risks is moving to the downside
- ECB cuts 2018 and 2019 growth forecasts, lowers 2019 inflation view
- ECB's Draghi: Inflation coming in weaker than expected
- Canada new housing price index +0.1% y/y vs +0.1% expected
- US import price index for November -1.6% vs -1.0% expected
- US initial jobless claims 206K vs 226K estimate
- The GBP is the strongest. The JPY is the weakest as NA traders enter.
In other markets:
- Spot gold, $-3 or -0.24% at $1242.60
- WTI crude oil futures up $1.98 or 3.87% at $53.13
- Bitcoin on Coinbase fell $-176 and $3263. For a technical look at Bitcoin, CLICK HERE.
In the European and US stock markets today, the indices ended mixed. In the US, the Dow was up modestly, the Nasdaq was down modestly. The S&P was unchanged. The same pattern can be said for the European markets with Spain and Italy rising, France falling and the UK, German ending unchanged.
In the US debt market today, yields are mixed with the short end yields falling and the far end rising modestly for a change.
The 2-10 year spread is out to 15.34 bps. The 2-5 year spread is nearly flat after being negative over the last week or so.
European benchmark 10 year yields were mixed with Italy and Portugal notes falling on investor demand for the higher yields.
A snapshot of the forex market is showing that the GBP is the strongest. It was the strongest at the start of the day and after a midday dip, moved back higher on hopes for a passable Brexit deal from the EU (still debatable) . The JPY was the weakest at the start of the NA session, and ended up at the weakest at the end of the session.
The USD is ending the day lower vs the GBP by 0.25% and higher vs the JPY by 0.26%. The other pairs vs the greenback are near unchanged levels (less than 0.1% moves in each).
The big news items for the day centered around the ECB.
- Rates were kept unchanged.
- The QE purchases were stopped as per expectations.
- The ECB will continue to reinvest maturing funds keeping the balance sheet steady. That will continue for an extended period of time
- Balance of risk is to the downside
Moreover the ECB lowered estimates for GDP and inflation. Below are the changes for GDP:
- 2018 1.9% vs +2.0% prior
- 2019 1.7% vs +1.8% prior
- 2020 1.7% vs +1.7% prior
- 2021 1.5% (no prior, this is the first forecast for 2021)
Inflation forecasts revised up for this year but down in 2019 and 2020:
- 2018 1.8% vs +1.7% prior
- 2019 1.6% vs +1.7% prior
- 2020 1.7% vs +1.7% prior
- 2021 1.8% (no prior, this is the first forecast for 2021)
For the EURUSD the initial reaction was to the downside off the pressers comments but ran out of steam and shot back up. Later after the presser a new low for the day was reached along a trend line on the hourly chart at 1.1331 and bouced. The 100 hour MA at 1.1366 is resistance in the new day. Stay below and the sellers are in control into the weekend.
The GBPUSD spent the NY session ping ponging between the 100 and 200 hour MA and ends the session between those MAs. The 100 hour MA is below at 1.2612. The 200 hour MA is above at 1.26779. Look for traders to use the levels to define risks with potential for stops on breaks.
The USDJPY got a boost after the US initial jobless claims came in better than expected. The price moved above the 113.49-54 swing highs from Wednesday and early Thursday and wandered up to the next target at 113.71 (high from Dec.3). That was enough to stall the rally. The pair trades into the new day, between the support at 113.49 and the resistance at the 113.71. Look for the break and run.
