Forex news for NY trading on April 24, 2017.
- Nasdaq closes at record levels. Major indices end the day with strong gains.
- US crude oil futures settle at $49.23/BBL
- Trump says not to worry about deficit as he prepares to lay out plan to cut corporate taxes
- Marine LePen temporarily steps down as party leader
- Nasdaq closes in on Nasdaq 6000
- Elabe poll shows just how tough a climb it will be for Le Pen
- Video: What's next for the euro and the Canadian dollar
- US Treasury Sec. Mnuchin imposes sanctions on Syria in response to Sarin attack
- Trump/Merkel discussed "urgent security challenge" posed by N. Korea
- Earning season continues. Key earnings this week.
- France is unsurprisingly out in front at the European close
- French IFOP poll has Macron/Le Pen at 60/40
- Bank regs make too big to fail worse says Fed's Kashkari
- Trump wants to build a wall on Mars
- Barclays still thinks the quid is cheap
- PBOC Yi speaks in NY: China to maintain growth and work on deleveraging
- Dallas Fed Manufacturing activity index 16.8 vs 17.0 Est
- Irish court sets date for Brexit hearing
- ECB QE count: Bought €11.069bn vs €12.482bn prior
- Fed rate hike expectations have taken a leap of faith since Friday
- Chicago Fed National Activity Index for March 0.08 vs +0.50 est.
- February 2017 Canadian wholesale trade sales -0.2% vs -1.0% exp m/m
- The strongest and weakest currencies as NA traders enter for the trading day
The end of day snapshot for other markets:
- S&P index, +1.08%, Nasdaq up 1.24%. Dow up 1.06%
- 2 year note 1.225% up 4.5 BP. 5 year 1.798%, up 2.8 BP. 10 year 2.2713%, up 2.3 BP. 30 year 2.927%, up 2.5 BP
- Spot gold $1276.06, Down -$8.04 or -0.64%
- WTI Crude oil $49.21. -$0.41 or -0.83%
Today was all about the French Election. Macron and LePen advanced. That was what the pre-election polls said would happen, but with Brexit and Trump in the rear view mirror, the market did give the polls the benefit of the doubt.
As a result, European stocks closed during the NY session with stellar gains led by France's CAC which rose by 4.14% and Italy's FTSE MIB which surged by 4.77%. In the other major European indices, the German Dax added 3.37%,, Spain's Ibex increased by 3.76%, and the UK FTSE rose by an embarrasing 2.11%. (what the heck....only 2.11%?).
Even the UK "modest 2.11% gain" (that is a joke), made the US stocks gains of 1.24% for the Nasdaq, 1.08% for the S&P and 1.05% for the Dow seem like chump change.
I guess you can say for those invested in equities had a pretty good day.
Up next, the Trumps tax bonanza on Wednesday (presumingly). The WSJ is reporting that Trump has ordered his people to get it done and not to worry about the deficit or cost. Treasury Secretary Mnuchin reiterated those thoughts when he said, "growth will take care" of the shortfall in revenue from lower tax rates. So, rip up the budgets. Forget about tax revenues. We are going ALL IN on the fiscal front.
Next stop after the tax bonanza, is bartering for the the extension of debt limit. Trump has asked Congress to add an emergency funding request for $33 billion to the bill with $30 billion for extra defense and combat spending, and $3 billion for more border security including the ubiquitous "Wall" (which Mexico was supposed to pay for at one point). He also called for $18 billion in cuts to domestic programs to help pay for his priorities. HMMMMMM. SMH.
In economic data today, the Canada wholesale trade sales fell by -0.2% which was better than the -1.0% est. In the US, the Chicago Fed National Activity index, a compilation of 85 different indicators remained in the black at 0.08, but was lower than the 0.5 estimate.
For the USD today, it is ending the session a little lower but mixed. Most of the declines were against the EUR which saw the EURUSD rise by 1.29% (dollar lower by 1.29%). On the other extreme the USDJPY rose by 0.61%. The dollar was down against the AUD by -0.37% but up against the GBP by +0.19%. The other major currencies were little changed.
Technically, what do traders need to be aware of in the new trading day?
The EURUSD's surge higher peaked in the 1st hour of trading in the new day. For the London and NY session it was all about holding support near the 200 day MA at 1.0839. In the NY session the low extended to 1.0835 - just 4 pips under that key MA level - before buyers returned to push the price higher into the close at 1.0865. That MA will be key in the new day and going forward. On the topside, the high during the London/NY session could only get up to 1.0873-76 (3 separate highs). Getting above that ceiling and staying above will be the hurdle for buyers. From there a move above the 1.0900-1.0910 will also be a tough level to crack. The 1.0910 was a swing low going back to June 2016, and a swing high from last month (March 2017). Key level.
Although, the USDJPY is ending the day with gains from the close on Friday (closed at 109.03 and trading at 109.76 near the close), the pair reached well above 110.00 (high reached 110.58) at the peak. Moveover, in the NY session, the price moved back below the 100 bar MA on the 4-hour chart at 109.875 around the London fixing time, and stayed below. That MA will need to be taken back if the buyers want to keep control in the new trading day. On the downside, the next support target comes in at 109.50.
Last week was more about the GBPUSD - at least on the snap election announcement day. Since that announcement though, the GBPUSD has been moving sideways with support at 1.2766-74 and then 1.2754 (38.2% retracement of move up from the pre-election announcement low). Today's low come in at 1.2771. ON the topside a trend line on the hourly chart connecting highs from April 19, 20, and today, comes in at 1.2826. Get and stay above that in the new day, would be more bullish for that pair.
For the NZDUSD, the pair found support buyers against its 200 hour MA today. It comes in at 0.7011. For the AUDUSD, the NY session low stalled just ahead of the 200 day MA at 0.75536. That MA and the 200 hour MA at 0.7550 will be eyed as support in the new trading day (stay above bullish but move below and the bias swings to the bearish side).
Below is a snapshot of the % changes of the major currencies vs each other. The EUR is the strongest while the JPY is the weakest.
