Forex news for NY trading on June 4, 2018.
- Nasdaq closes at a record high.
- It's a date: Trump and Kim set to meet at 9 am on June 12
- Crude oil falls below the 100 day MA for the first time Since September
- BOE Tenreyro: A few rate rises will be needed, but timing is an "open question"
- Bitcoin giving back the weekend gains
- European stocks end the session with gains (sans Italy)
- May: Told Trump metals tariffs were unjustified and deeply disappointing
- EU's Malmstrom: We're looking to safeguard our metals industries, first measures could come in July
- US April factor orders -0.8% vs -0.5% expected
- Italy to pass flat tax for companies next year, maybe families too
- ISM New York May business conditions 66.9 vs 64.3 prior
- BOC's Poloz is upbeat on investment despite NAFTA uncertainty
- The AUD is the strongest. The USD is the weakest as NA traders enter for the day
In other markets, the snapshot shows:
- Spot gold is down -$1.81 or -1.4% at $1291.96. The dollar rallied in the NY session and that helped to turn gains in Gold to losses.
- WTI crude oil fell -$0.95 or -1.44% at $64.86. The price is closing below its 100 day MA for the first time since September 2017 (see post here).
- Bitcoin fell -$237 at $7495. The 200 hour MA comes in at $7464.87. A move below that MA would be more bearish in the new day. ON the topside, the 100 hour MA come in at $7580.92 would need to be broken to attract more buying.
The US stocks closes higher with the Nasdaq and Russell indices closing at record highs.
- Nasdaq rose 0.69%
- S&P rose 0.45%
- Dow rose 0.72%
- Russel index closed up 0.33%
- European indices with the exception of the Italian FTSE MIB all rose today. Spain's Ibex was the big winner on the day
In the US debt markets today, yields moved higher with the short end leading the charge:
- 2 year rose 4.4 bps to 2.5161%
- 5 year rose 4.4 bps to 2.793%
- 10 year rose 4.0 bps to 2.942%
- 30 year rose 3.2 bps to 3.083%
- European yields ending the day mixed today
US factory orders were the main economic event today. They came in weaker than expectations for April at -0.8% vs -0.5% expected. The prior month was revised a little higher and durable goods were also a little better than previously reported at -1.6% vs -1.7% in the earlier report. The data was not a huge mover.
The geopolitical environment continues to be contentious. UKs PM May expressed displeasure in tariffs calling them "unjustified" and "disappointing". Pres. Trump meanwhile is focused on getting the deficit down and winning (Tweet: "The U.S. has made such bad trade deals over so many years that we can only WIN!").
In the forex market, the AUD rode better data for retail sales, inventories and company profits in the Asian session, and that sent shorts covering in that currency. It was the strongest currency for the day. In the new trading day, the RBA will likely keep rates unchanged. The AUDUSD moved to the highest level since April 23rd, but still remains below the 38.2% of the move down from the 2018 high at 0.7688 going into the decision (trades at 0.7642 currently).
The USDJPY is ending the session at/near the highs at 109.78. A stronger stock market and higher yields is contributing (the Fed is to continue to gradual raise rates and that combination is good for the USDJPY). Technically, the 100 bar MA on the 4-hour chart comes in at 109.82. The high reached 109.848. PS. the 50% of the move down from the May high comes in at 109.749 making the 108.75-85 a key barometer for the bulls and the bears. Move above is more bullish. Move below would be more bearish (at least in the short term).
The GBPUSD was another mover in the NY session. It moved above a topside trend line in the London session at 1.3382, could not extend above the 1.33000 level and started to move back down. The price fell below the 1.33478 area (was near the London low and was also the swing high from last Thursday) and sellers took the price back toward the 100 and 200 hour MAs at 1.3307-19 currently. The buyers had their shot today and failed. Do we get follow through selling in the new day? Get and stay below the 100 hour MA at 1.3307 will be step #1.
