Forex news for North American trade on December 17, 2018:
- Theresa May: Meaningful vote will take place in the third week of January
- Empire manufacturing index for Dec 10.9 vs 20.0 estimate
- Canada November existing home sales -2.3% vs -1.6% prior
- UK Labour Corbyn. Putting fwd motion of no-confidence in PM May
- White House's Hassett: Odds of a recession over next 12 months about zero
- Navarro blames Fed for market volatility
- Theresa May: Meaningful vote will take place in the third week of January
- Belgian December consumer sentiment -5 vs -1 prior
Markets:
- Gold up $7 to $1246
- WTI crude down $1.99 to $49.21
- S&P 500 down 54 points to 2546
- US 10-year yields down 3 bps to 2.86%
- JPY leads, CAD lags
It didn't start out badly. The S&P 500 was even into positive territory for a short period but it's all about flows at the moment and year-end is absolutely swamping any momentum in the market. There is also considerable worry that the Fed won't be as dovish as the market hopes.
USD/JPY was at 113.30 as North Americans arrived but that would be the best level of the session as it steadily bled lower than there. The first kick came on the Empire Fed and then risk aversion set in, taking it down to 112.70 as a short-term head-and-shoulders top formed on the short-term chart.
There was more drama in the UK but the pound made some modest gains in a bounce to 1.2640. The talk of a no-confidence vote on May is embarrassing for her but it's symbolic. Cable chopped around 1.2610 in North America and that's where it is ahead of the close.
The euro battled to 1.1350 from 1.1340 in a stable session despite the pain in stocks markets.
Even the commodity currencies were relatively calm, suggesting todays 'moves were more about flows than a change in fundamentals. AUD and NZD essentially traded sideways.
CAD, however, came under some pressure as oil prices slumped $2. Technically, the breakdown in oil looks worse than stocks with no real support until $42.05.
