Forex news for North American trade on October 16, 2019:
- US September advance retail sales -0.3% vs +0.3% expected
- Canada Sept CPI +1.9% y/y vs +2.1% expected
- Macron: A Brexit agreement is being finalized
- DUP leader says sources suggesting deal are 'talking nonsense'
- Fed's Beige Book: Economy expanded at slight-to-modest pace
- Fed's Kaplan: I backed the two prior rate cuts but I'm more agnostic on next move
- Trump says sanctions on Turkey will be devastating if Pence-Erdogan meeting not successful
- Fed's Evans: Another rate cut would boost his confidence in inflation
- Johnson told backbench MPs that 'we are almost there'
- Johnson spokesman: PM told cabinet there is a chance of securing a good deal
- ECB's Lane: Eurozone is facing a more-extended slowdown than anticipated
- US NAHB October housing market index 71 vs 68 expected
- US August business inventories 0.0% vs +0.2% expected
Markets:
- Gold up $7 to $1489
- WTI crude up 16-cents to $52.97
- US 10-year yields down 3.6 bps to 1.73%
- S&P 500 down 6 points
- CHF leads, NZD lags
It was all about Brexit once again. The pound jumped early on a report from RTE that a deal was almost done but the denials came shortly afterwards. What's increasingly clear is that the EU and UK are on the same page but it's not certain if the DUP will get on board. By extension, it's not clear if Johnson will have the votes in parliament, especially with the ERG saying it wants a legal text to vote on or their answer is no.
However that was all good enough to keep the general direction of the pound higher. Even a delay for legalese and other administrative reasons is fine if the deal is on track. Cable was able to break and close above the June highs in another win for the bulls. Last at 1.2820.
The euro drafted behind the pound in a rise to 1.1072 from 1.1025 early in the day. Helping it along was general weakness in the US dollar after a soft retail sales report. The odds of a cut at month-end moved up to 84%
The dollar was particularly soft against the commodity currencies in North American trading. Some of that was a reversal from earlier in the day but CAD was particularly strong until the API undid some oil gains.
