Forex news for NY trading on February 26, 2019
- The major indices are ending the session after late day rally fizzles out
- Fed discount minutes: All 12 voted to keep rates unchanged in January
- Are we finally turning a corner with Brexit?
- US sells 7-year notes at 2.538% vs 2.545% WI bid
- Fed's Powell: Being patient means Fed is in no rush to make judgment on policy
- European provisional closes show mixed results
- Atlanta Fed GDPNow for 4Q dips to 1.8% from 1.9%
- Powell Q&A: This is a good time to be patient, to watch and wait
- OPEC+ to stick to quotas and push for more adherence, despite Trump criticism
- US February Conference Board consumer confidence 131.4 vs 124.9 expected
- Richmond Fed manufacturing index for February 16 vs 5 estimate
- Fed's Powell: Sees favorable economic outlook with some cross-currents
- Merkel caucus: Could accept Brexit delay until end of June but not beyond
- ECB's Mersch: ECB must monitor fintech developments closely
- May: I have not discussed Brexit delay with other EU leaders
- US Q4 FHFA house price index +0.3% q/q vs +1.3% expected
- US December Case-Shiller 20-city house price index +0.19% vs +0.3% expected
- Philadelphia Fed non-manufacturing index 10.0 vs 1.0 last month
- US December housing starts 1078K vs 1256K expected
- The GBP leads the way on the upside. AUD is the laggard as NA traders enter for day.
In other markets:
- Spot gold is up $1.18 or 0.09% at $1328.80
- WTI crude oil is up $0.10 or 0.18% at $55.59
- Bitcoin on Coinbase is trading down -$5.80 at $3799. THe high reached $3830.34. The low extended to $3763.71. The 100 and 200 hour MA are above the current price near $3900. The bears are in control, below those MA levels
The US trading session was highlighted by the testimony by Fed Chair Powell in front of the Senate Banking committee. The Fed was thought to be more dovish saying the Fed should be patientm defining "patient" as being in no rush to make judgment on policy. Another comment from his prepared remarks hedged a "healthy"economic outlook by saying:
While we view current economic conditions as healthy and the economic outlook as favorable, over the past few months we have seen some crosscurrents and conflicting signals. Financial markets became more volatile toward year-end, and financial conditions are now less supportive of growth than they were earlier last year. Growth has slowed in some major foreign economies, particularly China and Europe. And uncertainty is elevated around several unresolved government policy issues, including Brexit and ongoing trade negotiations. We will carefully monitor these issues as they evolve.
Powell also said the US economy was not overheating.
Other news today was mixed:
- Housing starts were weaker but building permits were higher than expectation
- Case Schillerr was lower
- Richmond Fed Manufacturing index rebounded from a negative reading of -2 last month to 16 this month (above est of 5)
- Consumer confidence was much better than expectations at 131.4 vs 124.9 estimate.
The US stock market had a mixed session with the major indices opening lower, rallying to new highs in the last hour of trading, but falling off to end just in the red at the close. The European shares ending mostly higher with the UK FTSE lagging.
Speaking of the UK, the GBP was the strongest currency of the day helped by political maneuvering from PM May who agreed that Parliament should have the option to seek a delay in Britain's exit plans. Of course, if done it would only delay what needs to be done and agreed by the lawmakers and the EU (or not done in the event of a no deal). Nevertheless, it did appease the forex market and helped contribute to a squeeze higher for the GBP pairs. The GBPUSD was the strongest on the day with a 1.19% gain. The GBPJPY's change was the least of the majors, but it still rose by 0.76% on the day.
The weakest currency was the US whiich fell the most vs the GBP (1.19%) and the JPY (0.42%). THe EURUSD moved 0.28% and the AUD 0.27%.
Fed Powell's remarks and lower rates helped to push the greenback lower.
Below is an end of day snapshot of the US rate changes and ranges today. The 10 year ended down -2.5 bps at 2.6375%. The low for the day extended to 2.63%.
Technically speaking:
- The EURUSD squeezed higher with the price moving above its 100 day MA at 1.13892, but stalling near the 50% retracement of the move down from the January high at 1.14016. The price is trading near the 100 day MA at close. The MA will be a barometer for the bulls and bears in the new trading day
- The GBPUSD spiked higher and traded close to the September 2018 high at 1.3297. The high price today reached 1.3287 and backed off (trading at 1.3253 now). If the pair is going higher, that near double-top needs to be broken and stay broken.
- The USDJPY followed the dollar lower in NY afternoon trading and was helped by a push below the 200 hour MA at 110.674. The low fell all the way down to the 100 bar MA on the 4-hour chart at 110.421 and bounced (trade at 110.56 at the close which is near the lows from last Thursday and Friday. Find sellers below the 110.56 level should see a more bearish bias in the new day. The range for the week is 82 pips. Last week, the range was only 52 pips for the whole week. It's a start but is there now more than 82 pips in the USDJPY. If so, getting below the 110.42 is in the futures (barring a move move back above the 200 hour MA - all bets would be off then).
