Forex news for New York trade on December 2, 2020:
- ADP US November employment +307K vs +440K expected
- Pelosi offered stimulus package worth $1.3 trillion
- Pelosi and Schumer back bipartisan plan as a base for stimulus talks
- Beige Book: Most districts characterized economic expansion as modest or moderate
- Fed's Williams: Economy was recovering more-strongly than expected until recently
- Ireland's Coveney: Brexit 'deal can be done, but not at any cost'
- Powell: We don't want balancing sheet in long run to be bigger than needed
- US weekly oil inventories -679K vs -1980K expected
- McConnell says Democrats are negotiating in good faith on stimulus
- Fed's Harker: We are seeing signs of plateauing in economy
- Johnson spokesman: Our position on internal market bill remains unchanged
- Fed's Quarles sees 'steady but uninspiring' economic recovery
- ECB's Lane: PEPP and TLTRO programs very good match for pandemic conditions
- Canada Q3 labor productivity -10.3% vs -7.0% expected
Markets:
- Gold up $15 to $1830
- US 10-year yields up 1.3 bps to 0.94%
- WTI crude oil up 63-cents to $45.34
- S&P 500 up 6 points to 3669
- CHF leads, GBP lags
The dominant theme in FX remains the EUR/USD break above the September highs. After a brief dip back to 1.2050 at the start of New York trade, it got back on track and finishes near 1.21 on a general decline in the US dollar.
The stimulus headlines helped the risk-on mood and weighed on the dollar in the latter half of trade. The commodity currencies took advantage with AUD turning a loss into a decent gain. AUD/USD is now just a few pips from the August high in a break that could mirror what we've seen in the euro.
Cable wasn't so lucky as Brexit talks suffered a setback. The UK offered some concessions on fishing but there are still some big hangups including the UK's internal market bill. The EU is not keen on a potential break of international law and that could derail the talks. Tomorrow is a big day with Frost set to deliver an update.
It's also a big day in the oil market with the OPEC+ meeting all set. There were some positive rumblings, at least on the OPEC side and WTI bounced off the old highs in a nice intraday turnaround.
Gold also continued to add to yesterday's gains. Stimulus talks and dollar weakness are both helping.
