Forex news for New York trade on April 4, 2018:
- US February factory orders +1.2% vs +1.7% expected
- March ISM non-manufacturing index 58.8 vs. 59.0 expected
- US Fed's Bullard says current interest rate level is close to neutral
- US March final Markit services PMI 54.0 vs 54.2 expected
- US March ADP employment 241K vs 210K expected
- Trump said to soften auto demands in NAFTA negotiations
- Trump directs Pentagon to deploy National Guard at the Mexico border
- Canada ambassador: 'still lots of issues' on NAFTA
- White House: No new trade actions planned right now
- Gundlach: US 10-year yields seem about right
- DoubleLine's Gundlach: Recession likely in the Trump administration
- New Zealand March house prices +7.3% y/y
- Fed's Meister does not comment on rates during speech
Markets:
- Gold flat at $1333
- S&P 500 up 30 points to 2644
- WTI crude flat at $64.54
- US 10-year yields up 2.5bps to 2.80%
- NZD leads, CHF and JPY lag
Eight hours ago the world was plunging into a global trade war with China raising the stakes by announcing retaliatory tariffs on the US. The S&P 500 gapped 40 points lower at the open and USD/JPY sank to 106.00 from 106.60.
Throughout the day, the White House sent out its economic team to say it was only negotiations and that there wouldn't be a trade war. So while that sort-of undermines the tariffs, it also gave risk assets a reason to rebound and that's exactly what happened as the S&P 500 made a 75-point intraday reversal to finish 1.2% higher.
USD/JPY also rebounded to 106.80 from 106.00 and commodity currencies climbed after earlier losses. More positive NAFTA headlines also helped the Canadian dollar with USD/CAD underscoring what looks like a head-and-shoulders top with a drop down to 1.2770.
Separately, cable was crunched down to 1.4015 but found major support at the big figure and ripped back to 1.4080 in a move that was more pound-centric and not about the trade war sentiment.
Tune in tomorrow for more market madness.
