Forex news for North American trade on March 22, 2018
- BOE leaves interest rate on hold. Vote 7-2 vs 9-0 exp/prev
- BOE MPC Minutes: More of the same but not for McCafferty and Saunders
- Trump signs China tariffs: "This is the first, but this is the first of many"
- Commerce Sec Ross: Those saying 'the sky is falling' will be proven wrong
- US House passes $1.3 trillion spending bill
- US March prelim Markit manufacturing index 55.7 vs 55.5 expected
- Lighthizer: US wants to change China's trade behaviour
- Lighthizer says US has a problem with IP theft by China
- Germany's Merkel says EU is united over question of Trump's metal tariffs
- UK's May says she looks forward to EU endorsing Brexit transition
- US to fight China at WTO over trade violations - report
- FHFA January US housing price index +7.3% y/y
- Bill Gross: 3 or 4 Fed rate hike path is 'likely exaggerated'
- US weekly initial jobless claims 229K vs. 225K estimate
- BOC's Wilkins: Fine balance between moving too quickly or slowly on rates
Markets:
- S&P 500 down 68 points to 2643 (-2.5%)
- Gold down $3 to $1329
- WTI crude down 89-cents to 1.37%
- US 10-year yields down 6 bps to 2.82%
- JPY leads, AUD lags
It was a brutal day in equity land and that put a bid into the yen. Overall the FX market was fairly orderly and the moves weren't dramatic but stocks got pounded and the S&P 500 fell to the lowest since mid-February.
It was all about trade as Trump hit China with fresh tariffs. That spooked China-sensitive stocks and it was enough to topple the rest of the market.
USD/JPY found some support at 105.30 once Europe cleared out and it bounced to 105.80 but a second wave of stock market selling late in the day sent it back down to the lows, which are being tested at the moment.
USD/CAD is also hitting the best levels of the day late, as it claws back 40 pips from yesterday's 150 pip decline. The good news for CAD is that the US is easing up on NAFTA. The bad news is that a US-China trade war hurts everyone. Last at 1.2943.
Cable initially popped to 1.4219 on the BOE vote but that was very short-lived as it dropped right back to 1.4160 and the continued a slide below 1.41 and to 1.4076 at the lows before a quarter-cent bounce. Be on guard for BOE commentary.
EUR/USD was surprisingly subdued around 1.2300 and barely had a 40-pip trading range in North America.
For more on exactly why the market is so rattled right now, check out this video:
