Forex news for North American trading on October 28, 2021
- S&P and NASDAQ close at record highs and at highs for the day
- Apple, Amazon highlight key earnings releases after the close
- White House: Biden will announce steps on stockpiles to ease the supply chain issues
- Bitcoin tumbles lower, then quickly rebounds
- WTI crude oil futures settle at $82.81
- Facebook changes corporate name to Meta
- The bond market is signaling a policy error. But which one?
- U.S. Treasury auctions off $62 billion of the 7 year notes at a high yield of 1.461%
- ECB sources: Lagarde's mild rates pushback reflected ECB colleagues view
- Pres. Biden: We have reached a historic economic framework
- Major European indices close near unchanged/higher
- ECB sources: Inflation will stay above 2% throughout the year
- A look at what's in the Build Back Better reconciliation package
- The Kansas City manufacturing index for October 25 versus 22 estimate
- Pres. Biden: I think we are going to be in good shape on agenda
- US pending home sales for September -2.3% versus 0.0% estimate
- EURUSD extends range to the upside as Lagarde press conference continues
- Lagarde Q&A: Analysis does not support market based lift off expectations
- ECB's Lagarde opening statement: Momentum has moderated
- US Q3 advance GDP +2.0% vs +2.7% expected
- US initial jobless claims 281K vs 290K estimate
- The NZD is the strongest and the CHF is the weakest as the NA session begins
- Germany October preliminary CPI +4.5% vs +4.4% y/y expected
- ECB leaves key rates unchanged in October monetary policy meeting, as expected
The ECB kept the statement little changed after their policy meeting today. They announced that the PEPP envelope would remain at $1.5 trillion, but expects it to conclude by next March. Lagarde in her press conference acknowledged that although the economy was rebounding strongly, the momentum was starting to moderate and also expect inflation to continue to rise further - and remain higher than expected - before starting to come down next year. She did also say that the conditions for lift off in rates would not be reached in the near future.
Later in the day, the "sources" headlines said that no policymakers backed a 2022 rate hike. They also said that the members of the policy committee are split regard to inflation stating elevated in 2023. Finally, they advised Lagarde not to say the market is necessarily wrong about pricing in a tightening (which flies in the face of their opinion that there would not be a tightening in 2022, but ok).
The EURUSD moved higher on the back of the comments and overall the USD saw steady declines in the US morning session. In the afternoon, there was some bounce back but overall, the US dollar is the weakest of the major currencies while the EUR is the strongest.
In other news today, US GDP came in at 2.0% for the third quarter. This was less than the 2.7% expected, and much lower than the 6.7% from the second quarter. Although lower than expected, economists estimates were from around 0.0% to 5.0%. The model from the Atlanta Fed had it forecasting 0.2%. So 2% is somewhat near the middle.
US initial jobless claims came in better than expected at 281K. That was the lowest level since the start of the pandemic and down from 291K last week.
Pres. Biden announced the framework for a trim down stimulus deal of about $1.75T. Of course yet hope for as much as $3.5 trillion, but had to pair back those aspirations as moderate Democrats Manchin and Sinema were not going go along with those types of stimulus numbers. For a look at the details, CLICK HERE.
In other markets today:
- Spot gold is trading just up only $2.50 or 0.14% at $1798.66 despite the fall in the US dollar
- Spot silver is trading unchanged at $24.04
- WTI crude oil futures are trading up around $0.47 and $83.13 after settling at $82.81
- The price of bitcoin took the plunge mid afternoon to around $56,500, but has quickly rebounded to back above $60,000 at $61,399.
In the US stock market, the NASDAQ index reached a new all-time record high today for the first time since September 7. The S&P index also closed at a record high. The final numbers are showing:
- Dow industrial average rose 239.79 points or 0.68% at 35730.49
- S&P index rose 44.74 points or 0.98% at 4596.41
- NASDAQ index rose 212.29 points or 1.39% at 15448.13
That's the good news. The not so good news is that Amazon and Apple had disappointing earnings after the close. Amazon stock is currently down $133 or 3.88% in after-hours trading. Meanwhile Apple is down $5.64 or 3.7%. The two bellwethers are a negative for the overall market going into trading tomorrow.
In the US debt market, the yields move higher with the tenure up 4.7 basis points. The U.S. Treasury auctioned off 7 year notes, and demand was somewhat disappointing with a 1.1 basis point tail higher versus the WI level at the time of the auction.
