Forex news for North American trading on June 15, 2020
- Fed's Daly: I expect our current stance to continue until the economy has largely recovered what’s been lost
- Crude oil futures settle at $37.12
- The market is taking the Fed news as a sign that the Powell put is still on
- Fed says it will direct buy corporate bonds instead of just ETFs
- Chinese officials are warming to the idea of 4 more years of Trump
- More from Fed's Daly: Outcome-based forward guidance has been effective in the past
- Fed's Daly: Central bank needs to be prepared to do more to support economy
- Is something different in China's latest coronavirus outbreak?
- Major European indices recovered from lows and close marginally lower
- Fed's Kaplan: Most forces will be disinflationary over next couple of years
- Who recovers faster, the US or Europe?
- Florida COVID-19 cases rise 2.3% vs 7-day average of 2.4%
- Fed's George worth considering more fiscal stimulus to aid recovery
- German finance ministry expects deficit at 7.25% of GDP this year
- Fed opens lender registration for main street lending program
- Gold dragged lower as virus fears weigh
- The Empire manufacturing survey for June -0.2 vs -30 estimate
- Canada April manufacturing sales -28.5% vs -20.0% expected
- The CHF is the strongest and the AUD is the weakest as NA traders enter for the day
In other markets:
- Spot gold was down sharply at the start of the NY session (down over -$20) as investors shunned all assets, but recovered as stocks recovered. The price is still down on the day, but is trading at $1726.61, down -$4.00 or -0.23%. The high price for the day extend up to $1734.33 but that was near the open. The NY session high reached $1728.78.
- WTI crude oil futures were down earlier on the back of coronavirus fears and declines in stocks and yields. The recovery also helped to support crude oil prices. The price is currently trading at $37.05. That's up $0.79 or 2.18%. The high price extended to $37.26. The low price reached $34.36.
The US stock market and yields opened lower as concerns about weekend coronavirus developments in US and China weighed on the market. However, the empire manufacturing data (the first of the regional indices) surprised to the upside, and data out of NY on coronavrus and reopening were encouraging. There are still hotspots but the talking points are that the US will plow through any bumps in the road.
The overall risk tone was improved when the Fed announced that they would buy qualified corporate debt directly - even new issued debt. That action is a direct open invitation for corporations to issue in times where some may not have the wherewithal.
Stocks moved higher. All three major indices erased earlier declines and then some.
- The Dow, it was down -762 points and ended the session up 157.62 points.
- The Nasdaq index was down -185 but closed up 137.21 points.
- The S&P was down -75 points and closed up 25.28 points.
Below are the % changes of the major indices:
Those are big moves.
Yields also recovered, with the
- 2 year moving from a low of 0.173% to a near close level of 0.191%
- 5 year moving from a low of 0.295%, to the near close level of 0.339%
- 10 year moving from a low of 0.651% to a near close level of 0.715%
- 30 year moving from a low of 1.384% to a near close level of 1.458%
All the closing levels are near highs for the day.
In the forex, the risk on moves helped to send the USD to the downside. At the start of the trading day, the USD was mixed vs. the major currencies. By the end of the day, the greenback was the weakest of the majors.
Looking at some of the major currency pairs from a technical perspective:
- EURUSD: The EURUSD is ending the day with the price rebounded back above its 200 hour MA (at 1.13029) and 100 hour MA at 1.13168. The low for the day was sown at 1.12256. The high for the day reached 1.1332. Traders will be watching the lower 200 hour MA for support. Stay above and the buyers can continue the upward probe. Move below, and the market loses some of the bullishness seen today.
- GBPUSD: The GBPUSD moved back above its 100 day MA at 1.2531 and based near that level in the early NY session. The price had some ups and downs in the NY morning, but after holding support at the 100 day MA near the London fixing, the next 5 hours was spent marching higher. The run higher does have some resistance ahead at the 100 and 200 hour MAs at 1.2634-38 area.
- USDJPY: The downs and ups in the stock market today (and yields) did not really lead to that much movement in the USDJPY. In fact, the NY session low came at 107.20. The high extended to 107.48 - only a 28 pip range for the NY session. What the pair was able to do was stay above its 100 hour MA (at 107.22) for most of the session. That level will remain the barometer for the bulls and bears into the new trading day. Stay above is bullish. Move below is more bearish.
- AUDUSD: The AUDUSD spent the NY session first taking back earlier declines from Friday's closing levels and then stepping higher and higher. The late afternoon, saw the price move above the 100 hour MA at 0.6902 and move toward the 200 hour MA at 0.69302. The high could only extend to 0.69243 - short of the 200 hour MA. If the price is to continue the run higher, it needs to get and stay above the 200 hour MA. Conversely, a move below the 100 hour MA would weaken the technical picture and should see a rotation back toward the 38.2% at 0.6885.
