Forex news for North American trade on February 2, 2018:
- January non-farm payrolls 200K vs 180K expected
- Worst day for US stock markets since June 2016
- PM Trudeau: Canada is willing to walk away from NAFTA
- Fed's Williams: We need to continue on path of raising rates
- Fed's Kaplan: Has more conviction on 3 rate hikes than 6 months ago
- Bank of America and JPMorgan to decline all cryptocurrency transactions on credit cards
- Fed's Kaplan: Sees 2.50%-2.75% GDP growth this year
- Baker Hughes US oil rig count 765 vs 759 expected
- NY Fed Q1 GDP Nowcast 3.22% vs 3.09%
- December US factory orders 1.7% vs 1.5% expected
- US January final U Mich consumer sentiment 95.7 vs 95.0 expected
- January ISM-New York business conditions 72.5 vs 56.3
- ECB's Villeroy says whether QE ends in Sept is not a key issue
- US Fed's Kashkari says if wage growth continues it could impact rates
- CFTC Commitments of Traders: Canadian dollar longs climb, Euro remains hot
- SPD leader Schulz says they're under no time pressure in German coalition talks
Markets:
- Gold down $17 to $1331
- S&P 500 down 60 points to 2762
- US 10-year yields up 4 bps to 2.83%
- WTI crude down 74-cents to $65.05
- Bitcoin down $533 to $8560
- USD leads, AUD lags
It was a lively day in every market on jobs Friday. Crypto was the big story early on a breakdown in Bitcoin and everything else. The low was $7700 but it bounced nearly 20% at one point, only to sag back to $8500.
In FX, the jobs report sent the US dollar 30-50 pips higher initially on strong wages to go along with jobs growth. After a bit of consolidation a second wave of USD strength hit and EUR/USD fell as low as 1.2412 from 1.2495 pre-NFP. However, it clawed back all the losses in an impressive show of resilience before the stock market crunch sent it back to 1.2457.
Other currencies never staged as strong a rebound against the US dollar. USD/JPY rose to 110.44 from 109.90 on the jobs report then retraced to 110.20.
Cable was hard hit and wiped out the recent rebound in a 150 pip fall down to 1.4115 from 1.4217 before the jobs report. A bounce to 1.1471 was mostly wiped out and it closed near the lows.
The commodity bloc barely staged any rebound as risk appetite worsened and commodities slumped. USD/CAD was given an extra boost by the late NAFTA headline from Trudeau, that helped to push it through some hedger offers at 1.2400/20. All of the commodity bloc lost at least 1%.
A fear into the weekend is that Trump will try to fire Rosenstein and end the Russian investigation. I don't know how much that played into the rout in stock markets but it was some part.
Happy trails Janet. Friday was Yellen's last day.
