Forex news for NY trading on January 24, 2019
- Democratic bill to re-open US government lacks votes to pass Senate
- Vote on third Senate bill to reopen the government could be coming
- Senate does not have the votes for Trump's plan for a $5.7 billion border wall
- Mnuchin says he thinks US and China "making a lot of progress"
- JPMorgan moves GDP growth to Q2 from Q1 on shutdown
- Crude oil futures settle at $53.13
- SocGen: Don't buy risk assets until spring at the absolute earliest
- Q3 balance of payments winners & losers In FX - BAML
- Wilbur Ross changing his tune a bit on Fox Business
- German economic minister to lower German 2019 growth sharply
- Gold little changed. Trades up and down in $25 range.
- UK shares fall but other European indices close higher
- Ups and downs are the forex theme for today
- Pompeo says time for debate on Venezuela is done
- KC Fed manufacturing index +5 vs +3 prior
- US weekly oil inventories +7970K vs -750K expected
- Funding pressure weighs on Australian dollar
- Lithuania President says no deal may be better than extending Brexit uncertainty
- US January prelim Markit services PMI 54.2 vs 54.0 expected
- Draghi Q&A: Today's meeting was devoted to analyzing the slowdown
- Draghi opening statement: Risks around the eurozone outlook have moved to the downside
- Wilbur Ross: US and China 'miles and miles' away from trade resolution
- US initial jobless claims 199k vs 218K estimate
- The USD is the strongest currency. The AUD is the weakest at the start of the NA session
In other markets:
- Spot gold is down -$2.00 or -0.16% at $1280.68
- WTI crude oil futures are up $.55 or 1.05% at $53.17
Equity prices are ending the session mixed in the US with the Nasdaq up 0.68%, the Dow Jones Average down (-0.09%) and the S&P near unchanged (up 0.14%).
In Europe, apart from the UK FTSE, the major indices ended with gains.
In the US debt market today, yields moved lower with changes at -2.1 to -2.9 bps.
The change in interest rates may have been helped lower by global growth concerns. Honestly, US data was pretty good today with US initial claims posting their lowest level since 1969 (yes 1969) and also printed below 200K (199K vs 218K estimate). That is despite the government being shut down. The US Markit PMI data was also ok.
However, Europe had lower PMI flash data. Draghi did talk with more of a cautious tone with regard to the economy and inflation. He did not walk back the end of summer rate hike just yet. Also, Germany lowered growth for 2019 from 1.8% to 1.0%. That is a big ratchet down. As result, European yields moved even more than US rates (see changes below). The 10 year benchmark notes fell from -4.5 bps to -9.2 bps (vs -2.9 bps in the US 10 year).
What happened in the forex markets today?
A snapshot look at the strongest and weakest into the close is showing the JPY and the USD as the strongest. The AUD is ending as the weakest. Although employment in Australia showed yet another gain, mortgage rates were increased by NAB and that reversed the currency. The implication of a bank hiking rates while the central bank remains unchanged is worrisome. The funding pressure for banks, will add pressure on the central bank to cut the cash rate to lessen some of that pain.
Although the static picture of the end results seems to make some sense (better US data helped the USD, EUR was lower because of less hawkisk/more dovish ECB), the reality was there was a lot of ups and downs in intraday trading.
For example,
- The EURUSD fell to 1.1305 (equalling the low from Jan3rd) and then rallied all the way to 1.1380, before heading to, and through the double bottom to a new low of 1.1288. The pair is closing right around the 1.1305 level.
- The GBPUSD fell to a session low of 1.3011 near the start of the NA session. Then rallied up to 1.3057, and back down to 1,1313 before moving higher again into the close to a NY session high at 1.3065 (down and up and down and up again).
- The USDJPY opened near highs of the day at 109.77, fell to a low of 109.41, and moved back to 109.73 before settling around its 100 hour MA at 109.578.
- The USDCAD moved to a new week high at 1.33745 (was 1.3370). Failed on the break and fell to a trend line at 1.3331. Support held and the price bounced higher to 1.3363 and is settling at 1.3353.
You get the idea.
Running parellel to the markets is the stuff out of Washington.
Multi millionaire Commerce Secretary Wilbur Ross suggested that he did not understand why furloughed workers didn't just go to their local bank and get a loan for the lost wages as a result of government shutdown. He also added, that China and US were "miles and miles away" from an agreement. The getting the loan thing might sound like a great idea to Ross, but Geez...the stories are different for many people and will "just go and get a loan" is not the right answer. As for the "milles and miles" comment, I gotta think Trump may have choked on his Egg McMuffin on hearing that and watching stocks move from positive to negative. Later Ross, softened his comments when speaking on another business channel.
With lots of balls still in the air (Brexit, US/China, central bank policy, earnings, and the government shutdown causing havoc), it is no wonder the markets are in flux too.
