Forex news for NY trading on November 3, 2016
- US major indices down for the 8th consecutive day
- A look at the trends in the US employment
- Oil finally finds a bit of support. What's next
- This is why market jitters will rise ahead of Nov 8
- What the US election means for the Australian dollar
- GBP: We no longer see further BOE cut - Dankse
- Europes major indices end the day flat to lower
- Court ruling says May needs to consult UK parliament. What it means
- A quick look around the markets
- Passporting is one of the key areas under Brexit negotiation
- CNN/ORC poll: Nevada poll puts Trump ahead
- Brexit's Davis: High court ruling on article 50 will require an act of Parliament - BBC
- ISM's Nieves: Service providers are still growing at a decent pace
- US factory orders for September +0.3% vs. +0.2% estimate
- October 2016 US ISM non-manufacturing PMI 54.8 vs 56.0
- USDJPY rebounds. But why didn't it unravel on the break of key support?
- October 2016 US Markit services final 54.8 vs 54.8 exp
- Carney: We may adjust to fiscal policy when it happens
- Carney: We do not target the exchange rate
- Monetary policy will be determined by supply, demand and the FX rate says Carney
- Carney: Exchange rate will drive inflation
- BOE's Carney says effects on monetary policy of vote to leave EU are not automatic
- US initial jobless claims 265k vs 256K estimate
- US Q3 prelim nonfarm productivity +3.1% vs +2.1% expected
Markets:
- S&P -0.44%
- Spot gold +0.46%
- 10 year yield 1.81%, +1 BP
Fundamentally today, US non farm productivity saw an increase of 3.1% for the 3Q. This beat expectations of 2.1% and reversed the dismal -0.6% decline in Q2. The bad news is that part of the gains was because unit labor costs only increased by 0.3%. So workers did not reap the benefits. They just helped contribute to the better number. In other data, US employment claims were higher than expectations as was the 4-week MA. It is too early to tell if the move higher is the start of a trend. However, the employment report tomorrow will shed more light on that discussion. Factory orders came in a bit better than expectations despite durable goods orders being revised lower. Finally US ISM manufacturing was also weaker at 54.8 vs 56.0 estimate.
As far as currency movements today, the biggest mover was the GBP. It gained on the back of court ruling saying Article 50 needed parliamentary approval. Also the BOE's Carney and BOE was a bit more hawkish in their statement and expectations for inflation (although they view the rise in inflation due to the currency to be temporary). The GBPUSD traded at the highest level post the October 7th crash (highest price post crash was 1.2475 - the high today reached 1.24936), before backing off/stall in the NY session. A move above the 1.2375-82 level will be more bullish for the pair.
The USDJPY moved lower in the Asian Pacific session as hangover selling from stocks (FB got crushed after the NY close) and concerns about the US election kept the flows heading into the JPY (lower USDJPY). The move down took the price below the 100 day MA at 102.81 At that area was other technical levels including the 50% retracement of the move up from the end of September low, and a swing low from October 10th. The market tried to keep a lid on the pair at that level, but once the price moved back above, the sellers turned to buyers and the NY session saw the price climb back to a NY session high of 103.31. The price ended the day around the 103.00 level as US stocks closed near low levels. That level - along with the 102.80 level - will need to hold support in order for the USDJPY to have a chance for a corrective rebound. A move back below - and staying below - should keep the pressure on the pair.
The EURUSD had an up and down and up day. It ended the session higher. Be aware that the topside is approaching the 100 day MA at the 1.1131 level. The high today stalled at 1.1125. On the downside in the new trading day, the 1.1080 will be eyed.
The USDCAD remains stuck in a range despite lower oil prices once again. The Canadian employment report will be released at the same time as the US report tomorrow. Perhaps the market is looking for something other than oil prices to move the needle higher or lower for this pair. The expectations are for -10K in employment change and 7% unemployment rate (remember last month there was an oversized gain of 67.2K. So there should be a 'give back' of sorts).
The NZDUSD squeaked above the September 27th swing high at 0.7328. There was a nice ceiling against that level for most of the day until the last hour or so, when the price extended higher (watch the level for failures in the new trading day). The pair continues to find support from the better employment and inflation expectations from Tuesday's trading.
IN the new trading day, all eyes will be focused on the employment reports in the US and Canada at 8:30 AM ET. Non Farm payroll in the US is expected to rise by a fairly robust 173K. Before than, however, in Australia the market will be focused on the RBA monetary policy statement and the retail sales (est +0.4%.). In the European session, service PMI will be released in Spain, Italy, France, Germany and the EU as a whole.
Good fortune with your trading...
