Forex news for New York trade on January 5, 2020:
- ADP US January employment +291K vs +158K expected
- January ISM non-manufacturing 55.5 vs 55.1 expected
- US January final Markit services PMI 53.4 vs 53.2 expected
- EU reportedly takes aim at the City of London financial industry w/ MIFID 2 rewrite
- Canada December international merchandise trade -$0.37B vs -$0.61B expected
- US trade balance for December $-48.9 billion versus $-48.2 billion estimate
- Russia is not supporting a deeper output OPEC+ cut - report
- Romney says he will vote to impeach Trump on one charge
- China Global Times: US government should be flexible on China–US phase 1 trade deal
- BOC Wilkins: Canada has avoided secular stagnation and has a strong fundamentals
- US weekly crude oil inventories +3355K vs +3000K expected
Markets:
- Gold up $4 to $1557
- US 10-year yields up 5 bps to 1.65%
- WTI crude oil up $1.50 to $51.09
- S&P 500 up 37 points to 3335
- AUD leads, CHF lags
US stocks finished just shy of a record high as coronavirus fears were swept away by the relentless bid in everything. Talk about a 'cure' for coronavirus was fanciful but it was gobbled up in some circles and that set an early tone that proved to be irreversible.
At one point the WHO reminded everyone that the count of infected people continues to rise and that sent a brief shudder through the market but not for long. Economic data was generally a touch better than expected, particularly the jobs number and that was a big factor as well.
The euro continued to show that it's a favored funder as it slipped while risk trades rose. It has come within 2 pips of the January low and just below that is the November low, so we're watching for a run on stops.
USD/JPY didn't track higher with sentiment. The high of 109.84 from early in US trading continues to hold in what has been generally-subdued trade.
Cable sank back below 1.3000 and continues to be an oasis of volatility this week. After finding bids at 1.2950 it crept back above the figure before sliding to 1.2992 last.
USD/CAD was bounced around by oil prices. They rose early in the day and that weighed on USD/CAD but the trade was inconsistent. Some traders focused on Wilkins' comment about the lower bound of rates being closer by but that dip was later bought in a 15-pip round trip.
AUD and NZD didn't take part in the risk rally as much as the day before. In fact, both peaked early in London trade and were softer from there.
