Forex news for US trading on September 30, 2016
- US stocks end the session higher. The month is mixed.
- CFTC commitment of traders: GBP shorts reestablished. CAD position turns around.
- The top 5 event and releases for the week starting October 3rd
- Fed's Kaplan expects much stronger GDP growth in 2H or 2016
- IMF Special Drawing Right basket gives Yuan a 10.92% weighting
- Baker Hughes US oil rig count 425 vs 418 last week
- OPEC output hits a new record high - Reuters
- European stocks finish Friday with a flourish but can't undo a losing week
- The month end flows rears it's 'ugly' head
- EURUSD rockets to 1.1250 as Deutsche Bank shares rocket
- US stocks trading at day highs
- Month end fixing ahead. Put on your seat belts.
- Atlanta Fed GDP Now cut to 2.4% vs 2.8% prior
- September 2016 Chicago PMI 54.2 vs 52.0 exp
- Forex technical analysis: USDCHF corrects some of the London gains
- Not so fast on the Deutsche Bank news
- Deutsche Bank may only be fined $5.4bn by DOJ - Livesquawk
- Forex technical analysis: EURUSD gets a boost from US data
- Another 'hit and miss' set of numbers for the Fed to deal with
- The strongest and weakest currencies as NA traders enter for the day
Data releases:
- US personal spending 0.0% vs +0.1% est. Personal income 0.2% vs. +0.2% est.
- August 2016 US core PCE 1.7% vs 1.7% exp y/y
- Canada July GDP +0.5% m/m vs +0.3% m/m expected
- September 2016 US Michigan consumer sentiment final 91.2 vs 90.0 exp
It was a Friday. It was the end of the month. It was the end of the quarter. All of which can contribute to volatility as a result of "flows" from hedgers and speculators alike.
The EURUSD and EURGBP were particular impacted as tends to be customary. The GBPUSD was brought along for the ride as well.
Contributing to some additional volatility was a buoyant stock market that took it's cue from chatter that Deutsche Bank's fine from the US Department of Justice for their involvement in the housing market meltdown, was more like 5-something billion vs 15 something billion originally reported. Of course analysts opinions started to come out of the woodworking as soon as the price of the DB stock started to surge higher (the stock is ending the NY session up about 14%.).
So how did the major US stock indices end the quarter?
- Dow up 2.11%
- S&P up 3.31%
- Nasdaq up 9.69%
For the year, the numbers show the following (9 months)
- Dow is up 5.07%
- S&P is up 6.08%
- Nasdaq is also up 6.08% (how about that coincidence).
With 10 year note yields at 1.5961% , and the world chirping that yields are going to go higher, where do you put your money? If the choice is bonds or stocks, I guess stocks (with dividends) but also have some gold and perhaps some index puts just in case. FYI for the last three months spot gold was down -0.37%. For the year though, it is up 24%.
How about currencies? How did they do in the 3Q?
The strongest currency vs. the USD was the AUD. It rose by about 210 pips or 2.79%.
The weakest was the British Pound. The GBPUSD fell about 330 pips from the closing level on June 30 at 1.3307. That is good for a 2.56% decline vs. the USD (the USD was stronger by that amount). Of course the decline was in addition to the tumble from the Brexit vote. For the year. the British Pound is down nearly 12% (-11.94%).
The CAD and Chinese Renminbi were the only other currencies that fell against the dollar in the quarter with the CAD falling -1.49% and the Renminbi falling by a scant -0.36%.\
The EURUSD closed the 2Q at 1.1104 and is trading 137 pips higher at 1.1241 currently (a change of 1.22%). That is not that big a change. Of note in this pair is the EURUSD will close above the 100 week MA for only the 2nd time since August 2014. The last time was the week of August 14, 2016. The level comes in at 1.1223 this week. After 7 weeks of going sideways, is next week a break week for the EURUSD?
The USDJPY closed the 2Q at 103.16 and currently trades at 101.31 - a decline of 185 pips (or 1.79%)..
The highlight next week is the US employment report released on Friday. The expectation is for a gain of 170K (vs 151 K last month). With the unemployment rate at 4.9%, as long as that rate remains here, any job gain will be considered strong enough (or potentially strong enough) for the Fed rhetoric to remain at "We are likely to tighten before year end". Blah. Blah. Blah.
Other key releases and events are outlined HERE.
Hoping all have a great weekend. I know I will be tuned into my TV tomorrow as I watch the Memphis Tigers shock the Ole Miss Rebels.
