Forex news for NY trading on February 28, 2019
- Stocks tilt lower into the close. Rebound higher fizzles.
- USDJPY breaks above the 100 day MA. Extends to new session highs/new year highs
- Gold reverses earlier gains. Higher dollar/technical selling the catalyst
- Kaplan speaks to reporters: Fed will make decision on balance sheet in the not-too-distant future
- US crude oil futures settle at $57.22
- Bloomberg: US said to ready China trade deal
- More Kaplan: He does not believe Fed should be taking any action on rates through June
- Fed's Kaplan (Non-voter): 2019 growth will be slower given waning stimulus, higher rates
- North Korea foreign minister: Made realistic proposal at summit with US. Position won't change if US proposed further talks
- European shares close mostly higher. UK FTSE lags.
- Kansas City Fed Manufacturing Activity index for Feb 1 vs 6 est.
- Mnuchin: US outlook remains very strong. Trump administration united on China trade talks
- February Chicago PMI 64.7 vs 57.5 expected
- Dollar moves higher on the back of the US GDP beat
- Canada industrial product prices for January -0.3% vs 0.1% estimate
- US Q4 advance GDP +2.6% vs +2.2% expected
- US initial jobless claims 225K vs 220K estimate
- EU's Barnier: We will not change the Irish backstop or reopen the withdrawal agreement
- The CHF is the strongest. The NZD, CAD, GBP are the weakest
- Fed vice chair Clarida: Fed is entering era when it is "especially" dependent on incoming data
In other markets:
- Spot gold is down -$6.79 or -0.52% at $1313.05. The precious metal was up earlier at $1327.61 but gave up the gains as the dollar strengthened.
- WTI crude oil is trading at $57.22 up $0.27 or 0.54%. The DOE announced it was releasing 6M barrels from the strategic petroleum reserves. The Congressionally mandated sale is authorized in Section 404 of the Bipartisan Budget Act of 2015. The law authorizes the Secretary of Energy to draw down and sell up to $2 billion of SPR crude oil, for fiscal years (FYs) 2017 through 2020, to carry out an SPR modernization program. The announcement had limited impact on the price of curde today
- Bitcoin on Coinbase is trading up $53 at $3803.17.
The GDP was finally released for the 4Q and it came in better than expected at 2.6% vs estimates of 2.2%. There was some good news in the numbers in particular the rise in investment. Although investment in home structures fell, the investment by businesses was strong. One requirement for growth and hope from the tax cuts was that businessed invested and that in turn leads to increases in productivity.
Below are the some of the investment numbers:
- Business investment in structures -4.2%
- Business investment +6.2%
- Business investment in equipment +6.7%
- Business investment in IP and software +13.1%
For the full report, click here.
The strong number helped to send the USD higher after being down earlier. It also helped to send US yields higher.
For the day, although the CHF is ending the session as the strongest currency (flight into safety with North Korea and US , China and US and Brexit uncertainty leading to the gains), the CHF retraced much of its earlier declines by the close, with the USD the beneficiary. The AUD and NZD were the weakest of the majors (also on risk flows).
Below are the % changes for the major currencies:
Although the GDP was the main catalyst for the dollar today, other data helped was not bad.
- Jobless claims although a little higher than expectations at 225 vs 220, is nevertheless still near low levels.
- The Chicago PMI also came in much better than expectations at 64.7 vs 57.5 expected. Earlier this week the Richmond Fed index was stronger than expectation as was the Philly Fed index. So regional indices are feeling better after the government shutdown hurt sentiment.
Today was also the month end (say goodbye to February - for a short month it seemed long didn't it). Anyway, the GBP is ending the month as the strongest currency as the currency squeezed higher in anticipation of some sort of Brexit deal (or simply a squeeze of the shorts). The AUD was the weakest on the back of US/China concerns and expectations for softer RBA.
The USD was mostly higher with gains vs the AUD, JPY and NZD leading the way. The greenback was lower vs the GBP and modestly higher vs the EUR, CHF and CAD.
In the stock market today, US markets could not sustain an afternoon rally that got major indices back in the black. They ended down -0.28% on the day. European shares did close mostly higher.
