Forex news for NY trading on March 4, 2020.
- US stocks trading at new session highs
- Michael Bloomberg: He is a leaving race to help defeat Trump
- DOTs Szabat: Coronavirus causing reconsideration of air travel
- Italy orders sporting events without fans until April 3
- WTI crude oil futures settle at $46.78 per barrel
- EUs Peter Power: Talks with EU off to a good start
- Beige Book: Economic activity expanded at modest to moderate rate
- Another cruise ship appears to have coronavirus outbreak, this time in the US
- An enormous shift happened yesterday in US politics
- BOE Deputy Gov. Broadbent: There may be a role for economic policy to support activity
- US House and Senate negotiators have reached agreement on emergency coronavirus bill
- Italy confirms schools will close until March 15
- European equity's close with gains on the day
- Bullard: Risks are rising that virus could be worse than anticipated
- BOE's Bailey says central bank can lower rates to about 0.10%
- US weekly crude oil inventories +784K vs +3000K expected
- Michael Bloomberg is suspending Presidential campaign
- Full text of the Bank of Canada rate decision on March 4, 2020
- Bank of Canada cuts rates by 50 basis points vs a 25 cut expected
- US ISM nonmanufacturing index for February 57.3 versus 54.9 estimate
- US Markit Feb final services PMI 49.4 vs 49.4 expected
- BOE's Bailey: No question that virus is first issue we will face
- UK coronavirus cases jump by 34 to a total of 85 - BBC
- ADP US February employment +183K vs +170K expected
- The AUD is the strongest and the EUR is the weakest as the NA session begins
Highlights for today's near trading session:
- The Bank of Canada cut the rates by 50 basis points. The expectations was for a 60% chance of a 50 basis point cut. As a result, the Canadian dollar weakened. The USDCAD went from a pre-decision low of around 1.3330, to a session high of 1.34308 (100 pip move). The move took the price above the swing highs from yesterday and the NY session high between 1.3090 to 1.30953. The prices since rotated back to the downside and afternoon trading and trades just above that swing high area. a move below in the new day would next target the rising 100 hour moving average 1.3377
- In the US the ADP employment report showed a bigger than expected gain of 183K versus 170K estimate. However the prior month was revised lower to 209K from 291K. The BLS will release the US job data on Friday with a change in nonfarm payroll of 175K estimate. It's prior month came in at 225K. The revision down in the ADP report brings its number closer to the US number
- Democratic nominee Biden was resurrected after the Super Tuesday primaries. Biden won 9 of the 12 contests, and took the lead over Bernie's Sanders in the delegate vote. The big reversal helped to calm market fears about the implications of a Sanders nominee.
- The US stocks surged with the Dow industrial average rising by over 1100 points on the day. The Fed easing yesterday was not greeted with as much excitement, but Canada cut rates by 50 basis points as well and others were rumored to be moving in the cut direction. That stimulus along with the Biden Super Tuesday showing, helped to send stocks soaring. In addition to the NASDAQ rising by over 1100 points or 4.4%, the S&P index is up over 120 points or 4.1% and the NASDAQ index is up 317 points or 3.66%. A huge day to the upside for US equities
- European shares also close higher but off there high levels of the day. I would expect that all things being equal, they should play some catch up to the US afternoon gains
- Coronavirus continues to be a newsworthy story with numbers outside of China pushing higher. However, the market seems more comfortable at least today with other stories to focus on. UK coronavirus cases jump 34 to a total of 85 according to the BBC. In Italy, they announce that schools and universities will be closed until at least March 15. The number of deaths and cases in Italy continues to rise making it the European country with the most exposure so far. Italy also announced that sporting events would be held without spectators until the beginning of April. The number of deaths in Italy rose to 107 a gain of 28 from yesterday's numbers. In the US the number of deaths increased to 11 (10 in Washington state). VP Pence will visit the governor in Washington state tomorrow to discuss plans for containing the virus. California had its 1st confirmed deaths (a elderly patient with health issues)
- The US yield curve continue to steepening with the 2 – 10 year spread rising to 36.81 basis points from around 30 basis points at the close yesterday. Moreover, the 10 year yield move back above the 1.0% level after trading as low as 0.93%. The 30 year yield rose 5.7 basis points to 1.671%
- For what it's worth ISM nonmanufacturing rose to 57.3 versus 54.9 estimate. Those highest level since February 2019
- In the forex market, the strongest of the major currencies was the AUD and GBP. The weakest was the EUR and JPY. The USD is ending the session mixed with gains versus the EUR, JPY, CAD and declines vs the AUD, GBP and NZD. The GBP was helped in afternoon trading after EU trade official said UK/EU trade talks were off to a good start.
- The EURUSD is ending the day lower, but the pair did successfully bounce off of the 200 day MA at 1.1096. The price is up at 1.1134 near the close.
