Forex news for US trading on May 16, 2016:
- May Empire Fed manufacturing index -9.02 vs +6.50 expected
- Fed's Williams: The labor market looks good
- Saudi Arabia holds $116.8B Treasury bonds in newly-released data
- US NAHB May housing market index 58 vs 59 expected
- ECB QE count: Total QE €763.2bn vs €746.3bn prior
- Fed's Lacker: Case for raising rates in June is 'pretty strong'
- BOE's Bailey takes his turn stoking the Brexit fears
- Canada April existing home sales +3.1% vs +1.5% prior
- Tulin says Russia has no plans to intervene in FX
Markets
- Gold flat at $1273
- WTI crude up $1.57 to $47.78
- S&P 500 up 20 points to 2066
- US 10-year yields up 5 bps to 1.75%
- CAD leads, JPY lags
The pound was the winner in New York trading as it quietly rolled higher but the bigger stories were the rally in stocks in oil and the quick drop in gold.
GBP/USD opened lower and floundered for most of the day. Part way through European trading it began to catch a bid and that continued into US trading as it slowly rose to a high of 1.4415 from 1.4355 when US traders arrived. It was tough to identify a culprit for the gains; in the broader market, the US dollar was solid.
EUR/USD made some gains after a weak Empire Fed manufacturing report. The pair rose to 1.1340 from 1.1320 before the report but slowly gave back the gains over the remainder of the day. The pair essentially finishes the day unchanged.
USD/JPY got some help from the rally in stock markets. Commodity stocks and AAPL were big winners and that spread to a positive risk tone and climbing Treasury yields. In turn, USD/JPY rose to 109.10 at the highs from 108.90 at the start of US trading.
The commodity complex held a bid but maybe not as much as you might expect given the nearly 4% rally in oil. USD/CAD dipped down below 1.2900 to 1.2875 in the early trading but stabilized and is back at the big figure even as oil ends at the highs.
AUD/USD also finishes US trading where it started. Lost in all the commodity excitement today, China disappointed with weekend economic data. For now it doesn't seem to matter and AUD/USD finishes the day up 20 pips.
Gold took a quick hit down to $1274 from $1288 shortly after US traders arrived. Silver took a similar tumble and the reasons for the moves are tough to pin down. ETF buying increased for the 14th straight day but, clearly, someone was selling.
