Forex news for NY trading on April 3, 2019
- BOE Carney: BOE will do everything to support the economy in a No-Deal Brexit
- US crude oil futures settle at $62.46
- Letwin/Cooper bill passes the next vote 315 for and 310 against
- The US and Europe are in a race to be the most-disappointing economy
- Carney says he will not stay at Bank of England beyond January 2020
- Labour says have agreed to a programme to explore scope for agreement
- Business motion for Letwin/Cooper passes by 1 vote margin
- BOE Carney: Risk of no-deal Brexit alarmingly high
- European shares end with solid gains. German Dax leads the way
- US stocks are higher but you should see the German Dax
- Junior Brexit minister Chris Heaton-Harris quits May's government
- US weekly crude oil inventories +7238K vs -800K expected
- Kudlow: Chinese delegation in US this week, hope to get closer to deal
- ISM non-manufacturing index 56.1 vs 58.0 expected
- US March final Markit PMI services 55.3 vs 54.8 expected
- Italy likely to slash 2019 GDP forecast - report
- US March ADP employment +129K vs +175K expected
- The AUD is the strongest. The JPY is the weakest as NA traders enter for the day.
In other markets, the snapshot of prices is showing:
- spot gold, $-1.73 or -0.13% at $1290.80
- WTI crude oil futures trading down $.12 or -0.19% at $60.46. The inventory data today showed a sharp build of 7238K in inventories (see post here). That helped to weaken energy prices but they did recover some of the declines (the low reached $62.05) into the close.
- Bitcoin on Coinbase is trading of $338 at $5142.76. The price extended to the highest level twice level since November 19, 2018 and remains above its 200 day moving average at $4608. The low today reach $4769.39 before resuming the move back to the upside. The next major target area comes in at the $5733 to $5790 range. That is home to the 38.2% retracement of the move down from the May 2018 high and the swing los from the end of June 2018.
In the US and European stock markets, all the indices moved higher, led by the German Dax which rose by 1.70%. In the US the major indices are ending higher, but off the highs as well. The Nasdaq did lead the gains at up 0.60%. For that index, the 50 day MA moved back above the 200 day MA, kicking in the so called "Golden Cross" bullish signal. The S&P "Golden Cross" was crossed last week.
Below are the ranges and percentage changes of the major indices.
In the debt markets today, US yield are ending the day higher by 2.8 to 5 bps with the longer end of the curve leading the run in yields higher.
In Europe, the benchmark 10 year yields were also mostly higher. The German 10 year moved back above the 0.0%.
Today fundamentally, the ADP employment job change report was released, and the number showed a moderation from the prior month. The job gains totaled 129K vs 175k estimate and down from 189K last month. On the surface it is weaker than expected and a step down from last month, but given the point of the expansion, it is not surprising to see the number come down. The US NFP report (and other job statistics in the US) will be released on Friday. Total NFP jobs are expected to rise by 180K with the Unemployment rate coming in at 3.8% (unchanged).
In other news, the Markit PMI services index moved lower MoM at 55.3 vs 56.0 last month, and the ISM non-manufacturing index was also lower at 56.1 vs 59.7 last month. Both are still above the 50 level - so you can't get too concerned - but it is the recent trend that is worth monitoring. The employment component in the ISM index did see a rise to 55.9 from 55.2 last month.
In the UK, Labour met with PM May, with Labours Corbyn saying his party has agreed to a programme to explore scope for agreement. Other reports, from sources said that the talks did not go well. The lawmakers did vote - and agreed to vote on the "Letwin/Cooper bill" which is an initative aimed at stopping a no-deal Brexit. Specifically, it will bring forward a bill requiring the prime minister to put forward a proposal to extend article 50 past Aprl 12 to ensure the UK cannot leave the bloc with no-deal by default. The final vote will be aound 2200 GMT (give or take).
As far as forex winners and losers today, the AUD and the NZD started and are ending the day as the strongest. The AUD was helped by better retail sales and trade data at the start of the day's trading.
The JPY is ending as the weakest (it was the weakest at the start of the NY session as well). Risk off flows, sent the JPY pair higher (JPY lower).
Below is a snapshot of the strongest and weakest of the major currencies heading into close. The USD was mostly lower on risk off flows.
Technically, the EURUSD trades between the goal posts defined by the 200 hour MA at 1.12508 and the 100 hour MA at 1.12207. In the new day a break above or below will be eyed for the next bias clue.
The GBPUSD trades above its 200 hour MA at 1.3138. Stay above would keep the bulls in control in the new day. On the topside a trend line from the March 27 comes in at 1.3187. A move above it should open the upside for more gains.
NZDUSD tried to extend above the 100 hour MA for the 2nd time this week, but failed. If the pair is to go higher from here, getting back above that MA (and staying above) is required. On the downside, watch the 0.6773 level/
