Forex news for near trading on February 3, 2020
- Solid recovery day for the US stock indices, but Dow and S&P lag
- Wuhan will convert its sports stadium and conference center into hospitals
- Coronavirus: US wants to see trade numbers going in the right way, doesn't care about Chinese 'excuses'
- Coronavirus appears to be milder-than-feared. Why that's bad news
- WTI Crude oil settles at $50.11
- ECB's De Guindos: We are in the first stages of coronavirus outbreak, must be cautious
- Weidmann: ECB should simplify inflation target
- Atlanta Fed GDP now estimate for Q1 2.9% versus 2.7% prior report
- European equity close: A bounce to start the week
- US CDC has confirmed a second 'person-to-person' transmission of coronavirus
- January seasonal scorecard: Another clean sweep
- China said to be seeking US flexibility on Phase 1 trade pledges
- US construction spending for December -0.2% versus 0.5% estimate
- US ISM manufacturing survey 50.9 vs 48.5 expected
- Markit US January final manufacturing index 51.9 vs 51.7 expected
- Canada January Markit manufacturing PMI 50.6 vs 50.4 prior
- Bernie Sanders is the favorite in the Iowa caucus, but the odds aren't overwhelming
- The AUD and NZD rebound, while the GBP is the runaway weakest currency as NA traders enter for the week
There was let's coronavirus fears today and some recovering ISM data has helped the dollar and risk on flows. The ISM for January came in 50.9 versus 48.5 expected and is back above the 50 level suggesting an expansion in the manufacturing sector. Having said that there is some "mixed" in the market. Is it apprehension about the coronavirus? Time will tell.
For example,
- Gold is trading down -$12.32 or -0.78% at $1576.24. The high reached $1592.11 while the low extended to $1569.79. Gold moving lower is an indication of risk fears subsiding.
- While Gold is higher WTI crude oil futures trade sharply lower today. The current price is trading down $1.56 or -3% on the day at $50. There were some reports that OPEC would look to cut supply but that didn't help. Falling prices may be supply but it can also be the expectations for demand. A slower Chinese economy/slower global economy would impact demand for oil. That may be what we are seeing. Crude oil was the point not focused on risk on today.
- US interest rates rebounded today. The 10 year yield reached a high yield 1.5734% however as we head into the close, that yield is already down to 1.522%. Other points on the yield curve are also well off their high yield levels. The 30 year bond currently trades at 2.0% after trading as high as 2.05% (it is up only 0.1 basis points now). The bounce today and move back down are showing the apprehension in the debt market about growth/inflation - especially given the better-than-expected ISM data.
- US stocks move higher in the day, but like the US debt market, a lot of the gains (up 1.33% at the highs) in the S&P index were retraced by the close (up 0.73%). It was still a good day but well off the highs. The Dow fared worse with the market up 1.32% at the highs and closing up only 0.51%. Having said that, the NASDAQ kept most of their gains today. The index was up 1.63% at the highs and is closing up 1.34%.
- Finally in the forex, there was some flight into the US dollar today. That could be safety flows. However, it also could be the better data today. The AUD was also stronger today which is not congruent with coronavirus fears but the RBA decision is later in the new trading day and there could have been some profit-taking. The GBP was the run away weakest currency on the day after UK PM Johnson and EU Barnier started the trade deal monologue. Judging from the results today, we are likely in for more anxiety coming out of Brexit (it ain't over until it is over - including trade deals).
