Forex news for North American trading on May 20, 2020:
- BOE's Bailey: Negative rates are under active review
- Canada April CPI -0.2% vs -0.1% y/y expected
- Fed April 2020 meeting minutes: Coronavirus would weigh heavily on economic activity, employment and inflation
- BOC's Lane says doesn't think a further rate cut advisable
- US sells 20-year bonds at 1.220% vs 1.213% WI
- Fed's Bullard: Still possible to have V-shaped recovery
- US weekly oil inventories -4985K vs +2150K expected
- Eurozone May advance consumer confidence -18.8 vs -23.8 expected
- BOE's Bailey: Negative rates are under active review
- Fed's Kaplan: My guess is that Fed will need to do more
- Canada March wholesale sales -2.2% vs -4.8% expected
- Canada's Teranet/National Bank home price index for April 1.3% vs. 0.6% last month
Markets:
- Gold up $4 to $1749
- S&P 500 up 46 points to 2969
- US 10-year yields down 1 bps to 0.68%
- WTI crude up $1.63 to $33.59
- NZD leads, GBP lags
The US dollar was under pressure for much of the day, including a fall against the yen despite improving risk appetite early in the day.
One of the headlines that hurt the market was a move from US Senators to unanimously pass a bill that makes it tough for Chinese companies to stay listed in the US. That also hurt the US dollar, along with the spiraling war of words between the US and China.
The other headline that was a factor was the BOE's Bailey talking about negative rates again. Officials there have repeatedly floated the idea while cautioning that it's just an idea but the central bank could be backing itself into a corner. Cable had been flying high ahead of the comments but is 50 pips off the highs and near a session low.
On the technical side, the most-notable move was AUD/USD rallying above the May and April highs to the best levels in two months. That breaks a double-top and is a good sign for the broader risk trade, or at least the idea that Australia can cruise along with few cases.
A broader confirmation on the positive sentiment would be a breakdown in USD/CAD and that pair is close as it sank another 50 pips to 1.3868 at the lows before bouncing 30 pips on the China headlines.
