Forex news for NY trading on July 15, 2020
- S&P index leads the way. NASDAQ lags but closes higher for the 2nd straight day
- Macklem talks to BNN Bloomberg: Rates on hold for at least 2-years
- California coronavirus cases 11,126 vs 7346 yesterday
- WTI crude oil futures settle at $41.20
- Beige Book: Activity increased in almost all districts but remained well-below pre-pandemic levels
- WTI crude touches the highest since June 23
- Trump leans against US sanctions on Chinese officials for now - report
- Germany's Roth: Some EU countries are pressing for focus on loans rather than grants
- Fed's Harker: There is only so much policymakers can do to affect the economy
- European shares end the day higher. German DAX rises by 2%
- Arizona coronavirus cases rise 3257 vs 4273 yesterday
- Macklem Q&A: We lowered our US growth projection on pickup in virus
- Macklem opening statement: BOC will be there to provide stimulus for extended period
- Florida coronavirus cases 10,085 vs 9,261 yesterday
- DOE crude oil inventories for July 10 week -7.493M vs -2.098 million estimate
- Bank of Canada monetary policy report for July 2020
- Bank of Canada rate statement for July 2020. Rates remain unchanged.
- Bank of Canada holds rates at 0.25%, as expected
- Four things to watch for in the Bank of Canada decision
- Oil falls on reports of OPEC reversing some production cuts
- US June industrial production +5.4% vs +4.3% expected
- Canada June existing home sales +63.0% m/m vs +65.0% expected
- Russia and Saudi Arabia support tapering oil cuts in August
- Fed's Harker says he is revising his economic outlook as infections spike
- Canada May manufacturing sales +10.7% m/m vs +9.8% expected
- US June import price index +1.4% m/m vs +1.0% expected
- Empire manufacturing index for July 17.2 vs. 10.0 estimate
- The AUD is the strongest and the CHF is the weakest as NA traders enter for the day
In other markets:
- Spot gold is trading up $2.29 or 0.13% at $1811.63. The high price reached $1814.92 while the low extended to $1802.60
- WTI crude oil futures for August delivery is trading up $0.71 or 1.71% at $41. The high price reached $41.26. The low price extended to $40.08. Today there was talk that OPEC+ would reduce the production cuts in August. Also crude oil inventories showed a larger than expected drawdown (but was less than the private API data last night). The pair is close to correcting 50% of the move down from the January high at $41.25.
In fundamentalist today:
- The Bank of Canada kept rates unchanged with the new BOC Governor Macklem saying rates will remain low for a few years (at least), and that the Bank of Canada will do all it can should the economy falter. The CAD got stronger throughout his Q&A session and is closing the day right around the 200 day MA at 1.35059.
- The Empire manufacturing index rose to 17.2 vs. 10.0 estimate and -0.2 last month. The new orders and shipments led the way.
- Industrial production and capacity utilization also rose greater than expectations in June. Industrial production rose 5.4% vs. 4.3% estimate. Capacity utilization increased to 68.6% vs. 67.8% estimate and 65.1% last month (an all-time low level) percent
- The Fed's beige book stated the obvious that activity increased vs. last month but was less than pre-pandemic levels
- Fed's Harker had a pessimistic view on the recovery saying that he is revising his economic outlook as infections spike, that he is skeptical that the July report will be as good as May and June, that he is worried about the fiscal cliff of expiring unemployment programs and finally that state and local governments need help. Ex Fed Chair Bernanke in an op-ed for the NY Times, reiterated the idea that state and local governments needed help in order to avert large layoffs.
In the US stock market today, the major indices closed higher across the board. The Dow industrial average gained 0.85%. The S&P index gains of 0.91%. The NASDAQ lagged with a 0.59% gain. The big winner was the small cap Russell 2000 index which gained 3.5%. Low sharply higher, the Russell index is still down -11.4% for the year, while the NASDAQ index is up 17.59%.. Stocks were helped by reports that Moderna vaccine was ready for the final phase of testing. The S&P index closes just below the 2019 closing level of 3230.78 (within 0.13% of the level).
Below are the percentage changes and percentage ranges for the major North American and European indices. European shares will close higher with the exception of the Portugal PSI 20:
In the forex market today, the CAD was the strongest of the majors, while the CHF was the weakest. The USD was mostly lower with gains only vs the CHF. The pair was near unchanged vs the EUR.
Some technical levels to eye in the new trading day:
- EURUSD. The EURUSD found sellers against a topside trend line on the hourly chart (the high reached 1.14512). The fall into the New York afternoon session the price down to the 1.1400 level where buyers leaned against the natural support level. In the new trading day keep an eye on 1.14223. That was the Asian session high from today's trading. On the downside, a break of the 1.1400 level would look toward 1.13759. That is the 38.2% retracement of the move up from Friday's trading low.
- USDJPY. The USDJPY trended lower into the New York morning session. The low price reached 106.66. That was at the topside of a swing low area between 106.629 and 106.66. The subsequent bounce with the price back toward the 107.00 level (the high price reached 106.967). IN the new day, a move above the 107 level would run into the falling 100 hour moving average at 107.07. Today, the break of that moving average turned buyers and the sellers, and attracted new shorts. It should solicit sellers against the level on the 1st test.
- GBPUSD: The GBPUSD moved close to the ceiling from last week/early this week at 1.2663 to 1.26688. The high price could only get to 1.26487 before rotating back to the downside and falling back below the 100 hour moving average at 1.2590 and a swing area between 1.2590 and 1.25998. It will take a move back above the 1.2600 level in the new trading day to tilt the bias back higher. On the downside a break of the 200 hour moving average at 1.25652 would give sellers more reason to sell (and buyers less reason to be long).
