Forex news for NY trading on June 19, 2018
- Dow is the big loser today as big multi-nationals are shunned on trade
- There is a low floor area for NZDUSD which keeps holding the sellers weight. Can it continue into the new day?
- Crude oil futures settle at $65.07
- Iran oil minister: Pres. Trump...don't tell us about oil
- Trump: Labor department has a new plan for association health plans for small businesses
- Canada's Freeland: Has no choice but to reciprocate against US
- European stocks close lower but off low levels
- White House trade advisor Navarro says Trump making little progress on China trade
- Kuwait's oil minister speaks on upcoming OPEC meeting
- Atlanta Fed GDPNow estimate falls to 4.7% from 4.8% last
- Global Dairy Trade auction results -1.2% to average price of $3481
- Nowotny: ECB is starting exit from expansive monetary policy
- US housing starts for May 1350K vs. 1311K expected. Building permits 1301K vs. 1350K expected
- PBOC Gov. says investors should stay calm
- The JPY is the strongest. The AUD is the weakest after trade wars heats up
In other markets:
- Spot gold is trading down $2.73 or -0.22%
- WTI crude oil is trading down -$0.93 or -1.41% at $64.92
- Bitcoin is trading up $6 at $6730
In the US stock market, the multi-nationals in the Dow were hit the hardest on trade concerns. The broader S&P and Nasdaq were down but off lows. The small-cap Russell index was actually higher. Here are the numbers:
- Dow fell -1.15%
- S&P fell -0.40%
- Nasdaq fell -0.28%
In the US debt market, yields were lower but off the lows
The JPY and CHF were the strongest currencies on safety flows. The NZD and other commodity currencies ended as the weakest as they were shunned as risky currencies. The USD was mostly higher - only falling vs the JPY and the CHF.
Once again, it was a low event day. The only economic release was housing starts and building permits. That combo series came out mixed with starts better than expectations while permits were lower. The data is not really a market mover.
What was a catalyst today - at least more than starts and permits? Trump vs China Trump love Xi. They have a great relationship, but Trump called for $50b of tariffs, China saw the $50B. Trump raised to $200B and China said we may not be able to see the full $200B as the US only exports $130B. However, they can impose "qualitative" (vs quantitative) measures like increased regulation, blocking expansion or encouraging a consumer boycott (its been done before).
Sounds like the makings of a trade war, right? However, the markets do not really feel that bothered (or showed it).
For example,
- The stock market - although lower - did not crash and burn.
- US bond yields are ending lower but they were lower earlier in the day (by about 4 bps in the 10 and 30 year issues)
- I would think gold would find a bid on flight to safety buying, but it's down -$3.74 and running further away from the $1300 level from last week. It trades at $1274.59
IN the currency markets, there were flows into the safety of the JPY and CHF and out of the commodity currencies, but the USD was lower vs the JPY by -0.61% at the start of the NY day and is closing down -0.47%. The dollar was higher vs the AUD by 0.84% on flight out of risk earlier, but is ending the day only up 0.54%.
If the fears of a trader war were for real, I would think the markets would have reacted more violently.
Maybe, it will be a delayed reaction and we will see worse tomorrow? Maybe the worst is yet to com Maybe it is a long drawn out process? I don't know, but for today, there was some fear, but the market was not scared to death.
Have a good day, evening, night.
PS World cup results today:
- Japan 2 Columbia 1
- Senegal 2 Poland 1
- Russia 3 Egypt 1
Tomorrow:
- Portugal vs. Morocco
- Uruguay vs. Saudi Arabia
- Iran vs. Spain
