Forex news for North American trading on November 4, 2020.
- CNN has 'called' Michigan for Biden
- Major indices up for the 3rd straight day. Rise despite election uncertainty
- Biden speaking - says count will show he has won the presidency
- Trump team starts organized effort to declare victory in Pennsylvania. Here's why
- Crude oil futures settles at $39.15
- What can you say about the pollsters?
- US voters didn't choose to open the fiscal taps
- Here comes the legal battle: Trump demands counting stop in Michigan
- Fed's Kashkari won't attend FOMC meeting this week, Daly will vote instead
- US dollar continues slide but many questions remain
- European shares rise for the 3rd consecutive day
- Wisconsin says all votes have been counted. Georgia a spot to watch
- McConnell signals some willingness to work with Democrats on stimulus
- McConnell puts some distance between himself and Trump
- UK reports nearly 500 coronavirus deaths
- US weekly EIA oil inventories -7995K vs +275K expected
- ISM October US services index 56.6 vs 57.5 expected
- US October Markit final services PMI 56.9 vs 56.0 expected
- Canada international merchandise trade for September -3.25B vs -2.35B estimate
- Canada September trade balance -$3.25 billion vs -$2.35 billion expected
- US September trade balance -$63.9 billion vs -$63.9 billion expected
- BOE brings forward monetary policy decision on Thursday to 0700 GMT
- US October ADP employment change 365k vs 650k expected
- The CHF is the strongest and the GBP is the weakest as NA traders enter for the day
The US election dominated the news of course. Dem candidate Biden has his hands on the Presidency, but votes still need to be counted and finalized. There are still some states which can not be declared but would be a hard lift for Trump to take i.e. Arizona - despite Fox declaring Biden the victor last night, and Nevada which just needs to see the votes for sure to declare. Georgia is still undecided as is Pennsylvania with Pres. Trump looking for recount in Wisconsin and suing Pennsylvania even before all votes are decided. Get ready for more lawsuits.
Biden did not declare victory, but addressed the American people near the end of day saying he is on track to win the election, but will let the vote counting proceed to it's conclusion. He looks to rid the US of red and blue states and treat each as the "United" States.
The financial markets admittedly were a bit "different"
- Stocks soared, with large gains in tech, and large caps but not in the small caps. The Russell 2000 closed unchanged while the Nasdaq rose 3.85%. The S&P index increased by 2.2%. The Dow industrial average rose by 1.34%. The major indices all closed up for the 3rd consecutive day
- US yields tumbled. . The 10 year yield fell by 13.64 basis points to 0.762% after being as high 0.943% during the Asian session. While stocks rose from risk-on flows, the Pavlovian reaction was not to sell bonds (pushing yields higher). Instead there was a huge rally across the yield curve
- Gold was up and down but closed marginally lower. It seemed to struggle with the ups and downs in the various markets.
In the forex, the NZD and AUD are ending the day as the strongest of the majors while the GBP is the run away weakest . The USD opened mixed and is ending mixed, but moved higher into the London close (before heading back lower in the NY afternoon session ). The dollar rose the most vs the GBP (+0.62%) and declined the most vs the NZD (-0.30%) and the AUD (-0.27%). Versus the other currencies, the green back is ending within 0.12% of the closing levels from yesterday.
Having said, that the day was not without oversized moves up and down in all the pairs vs the USD. However, apart from the GBPUSD which is down -81 pips, the other pairs are all closing within 20 pips of unchanged (up or down - see the chart below).
Apart from all the election news,
- ADP released their expectations for employment change. The gain was a 365K which was much lower than the 643K estimate. Last month the gain was 753K. . The US nonfarm payroll report will be released on Friday with expectations for a gain of 590K vs. 661K in September.
- The US trade balance came in as expected for September $-63.9 billion. Trade Deficits remain high in the US.
- The ISM services index for October was weaker than expected at 56.6% vs. 57.5%. The manufacturing index released earlier this week surprised to the upside.
- Finally crude oil inventories showed a sharp drawdown of minus 7998K vs. an expected build of 275K. Gasoline inventories however saw a build of 1541K vs. minus 800K estimate. The price of WTI crude oil futures settle at $39.15 which was up $1.49 or 3.96%.
The FOMC rate decision will be tomorrow at 2 PM ET. No change is expected. Also on the economic calendar tomorrow will be initial claims which are expected to show a rise of 735K vs. 751K. Continuing claims are expected to move lower to 7200K vs. 7756K last week. We can expect Arizona, Nevada votes to be hopefully concluded.
