Forex news for NY trading on May 16, 2018
- The US stocks end near middle of the trading ranges
- NAFTA: Guajardo says does not rule out reaching deal from end of May onwards
- China's Liu said to be optimistic trade deal can get done - report
- Fed's Bullard: Yield curve has a nice slope, not invert danger now
- BOC's Schembri: Rates are below neutral because of NAFTA uncertainty
- The US small cap Russell 2000 hits an all time high
- Fed's Williams: I would hike to invert yield curve in the right situation
- Weekly EIA US oil inventories -1404K vs -2000K expected
- Why it's all about Italy today
- US April industrial production +0.7% vs +0.6% expected
- Fed's Bostic: Most businesses in surveys aren't changing 2018 capex
- EU's Tusk: We will stick to our guns in dispute with US on trade
- Draghi: We're seeing increasing political fragmentation
- US housing starts for April 1287K vs 1310K expected
- Canada March manufacturing sales +1.4% vs +0.9% expected
In other markets:
- Spot gold is trading near unchanged levels (up $0.60 or 0.04%) at $1291.05
- WTi Crude oil is up $0.23 or 0.32% at $71.54. The inventory data for gasoline showed a sharper than expected draw down. The crude oil inventories showed a lower than expected draw down of -1404K vs -2000K expected, but the private data yesterday showed a surprising +4854K build. So the market had reason to be confused.
- Bitcoin on Coinbase is trading down $254 at $8266.71. The digital currency traded to a low or $8103 and $8114 on two separate lows. Getting back below each will be eyed in the new trading day.
- S&P rose 0.41%. Nasdaq rose 0.63%. Dow rose 0.25%. The small cap Russel index closed at record levels and up over 1% on the day.
- US yields reversed higher after starting the day down a pip or so. 2 year 2.5892%, up 1.6 bps. 5 year 2.940%, up 2.2 bps. 10 year 3.10%, up 2.8 bps. 30 year 3.219%, up 1.9 bps.
The NY session had some minor data released during the day. The housing starts continue to be impacted by lack of labor and higher costs for lumber. The data came in weaker than expected.
Later industrial production came in a little better than expected at 0.7% vs 0.6%.
Draghi came out early and said the EU was becoming increasingly more fragmented politically. That is particularly evident in Italy as 5-Star and the League are forming a coalition and one of the early "wish list items" is a forgiveness of 250 billion euros in Italian bonds in order to bring down Italy's debt. The anxiety helped to push the EUR to the bottom of the major currency league table today (see table below).
At the top of "the table' were the commodity/risk on currencies (CAD, AUD and NZD). Stocks were higher, the Canada manufacturing sales were better than expected at 1.4% vs 0.9%. Oil remains elevated which helped contribute to the better "risk on" tone. In addition, the AUD and the NZD have been hit hard and the Australian employment report will be released in the new trading day. So there was a reason for a little corrective activity in those pairs too.
The NZDUSD based against a lower trend line at the years low at 0.68504 and moved up to a high of 0.6916 before consolidating near the highs into the day's close (closing near 0.6896). Nevertheless, the 100 hour MA remains higher at 0.6924 (and moving lower). That will be need to be broken to start to scare the bears/seller.
For the AUDUSD, it stalled earlier in the day at the swing low from yesterday (at 0.7444). The double bottom was enough to ignite it's move higher. The move stalled around the 100 hour MA at 0.7521. The pair closes the day above the 100 hour MA at 0.7502 and below the 200 hour MA at 0.7521. With the employment number out in the new day, those levels will be in play. Look for a break and run on a surprise.
For the USDCAD, the price fell below its 100 bar MA on the 4-hour chart at 1.2845 and the 200 hour MA at 1.2843, and that led to a run lower. The low stalled at 1.2777 - just ahead of the 200 bar MA on the 4-hour at 1.2774.
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