FX news for NY trading on August 15, 2017
- US stocks end the session mixed. Little changed.
- Dallas Fed Kaplan: There is still some slack in US labor market.
- Pres. Exec. Order: To establish protocol of one federal decision for major infrastructure projects
- Crude oil futures settle at $47.55 /BBL
- Congressional Budget Office: Premiums would jump 20% if Trump payments cut
- German FM Schaeuble: Brexit vote has strengthen EU
- Scott Paul (Alliance for American Manufacturing President) resigns from Trump council
- European stocks end higher for the 2nd consecutive day
- Atlanta Fed GDPNow estimate for 3Q at 3.7% vs. 3.5% last
- Fed: US household debt up 2% in 2Q.
- The NZ Global Dairy Trade auction prices -0.4%
- US business inventories for June 0.5% vs 0.4% estimate
- US NAHB housing market index for August 68 vs. est. 64
- 10 year yield up sharply after US retail sales
- IMF forecast China GDP to grow average of 6.4% through 2020
- Canada existing home sales (July) -2.1% vs -6.7% last
- US advance retail sales (July) 0.6% vs 0.3% exp m/m
- US July import price index mm 0.1% vs 0.1% exp
- US August NY Empire State mftg index 25.2 vs 10.00 exp
- US representative Brady (Tex) still working on details of tax reform plan
- A snapshot of the strongest has the USD leading again. JPY and GBP lag
In other markets today, a snapshot shows:
- Spot gold was down about -$10.00 to $1272.25
- WTI crude is trading up $0.12 at $47.71
- US yields are higher. 2 year 1.3465%, up 2.8 bp. 5 year 1.8253%, up 5.6 bp. 10 year 2.728%, up 5.4 bp. 30 year 2.8488%, up 4.1 bp
- US stocks ended the day little changed. S&P down -1.2 points or -0.05%. Nasdaq down -7.22 points or -0.11%. Dow up 5.28 points or 0.02%
The US retail sales in the US today surprised to the upside. Not only were the headline and breakdown numbers (ex food and energy, control group) better than expected, but the revisions were also better.
As the better retail sales were being released, the Empire State manufacturing index was also coming out better at 25.2 vs 10.0 estimate. The 1-2 punch sent to dollar to new session highs against all the major currencies.
The EURUSD went down to test last weeks lows at 1.1688. The low reached 1.16867 and bounced. The price moved back above the 1.1711 level on the rebound. That level was the swing high from August 2015. The price also moved above a broken trend line on the daily chart (see post here) at 1.1715. In the new trading day that line moves up to 1.1724. Be aware.
The USDJPY moved to test the swing high from August 8th at 110.824. The high reached 110.84 and came back off. The corrective move fell below the 100 bar MA on the 5-minute and 4-hour chart, but held against the 200 bar MA on the 4-hour chart (and lows from before the retail sales and empire manufacturing data (see chart below).
The GBPUSD fell to a low of 1.28456. That was just below the 100 day MA at 1.28599, trend line support, and the 61.8% of the move up from the June low at 1.28478 (see chart below), but the selling momentum stalled and the market "sidewayed" its way for the rest of the trading day (high reached 1.2875).That cluster of support remains a key level for both buyers and sellers. It defines bullish above and bearish below in the new trading day.
In other news, the Atlanta Fed GDPNow estimate for the 3Q showed an increase to 3.7% from 3.5%.
US business inventories rose by 0.5% while sales rose by a less than equal 0.3%. So the sales to inventory ratio went up a smidge.
The NZ GDT prices fell by -0.4% which helped to send the NZDUSD to the lowest level since July 11th at 0.7228,
At the end of the day, Pres. Trump announced a executive order that proposes to streamline major infrastructure approvals in an attempt to cut all the red tape. Good idea. However, during the lively question and answer session, Trump reverted back to not condemning neo-Nazi alt right groups, but spent most of his time talking about how both sides were to blame. He can't help himself. UGH.
Four CEO have left his business council. It will be interested to see the type of pressure that will be put on others to resign....
I don't know about you, but when David Duke thanks the President, it is a sad day.
Below is a snapshot of the winners and losers for the day. The USD was the winner. while the JPY was the weakest.
