Forex news for North American trading on March 5, 2019:
- US February ISM non-manufacturing index 59.7 vs 57.4 expected
- Markit US February final services PMI 56.0 vs 56.2 expected
- US January federal budget statement +$8.7B vs +$12.0B expected
- The GDT auction results show a 3.2% rise
- New Zealand QV house prices +3.0% y/y vs +2.9% prior
- China blocks major Canadian agricultural shipment
- Fed's Kashkari: I don't think the US is at full employment
- US new home sales for Dec 621K vs 600K est
- Fed's Kaplan: Monitoring the level and growth of corporate debt
- Labour's McDonnell says not many Labour MPs will back May's Brexit deal
Markets:
- Gold up $1 to $1287
- WTI crude flat at $56.55
- US 10-year yield down 0.5 bps to 2.718%
- S&P 500 flat
- USD leads, CHF lags
This ISM non-manufacturing survey cruised past expectations with a big boost in new orders. The US dollar initially rallied on the data but was only able to sustain the momentum for 30 minutes before it began to fade. USD/JPY rallied to 112.14 from 111.85 before falling all the way back over the next few hours.
The euro finished the day down 30 pips with the bulk of the move coming on the ISM data is it fell to 1.1292, bounced and then to 1.1290 a few hours later. That level held and it has rebounded to 1.1307. In the bigger picture, there isn't much exciting until the 2018 lows at 1.1213 but there is increasing talk of a breakdown.
Cable took at dive down to 1.3098 as it busted stops in an 80-pip drop at the start of New York trade. There was the usual Brexit hand-wringing but nothing meaningful on the news flow and it slowly climbeded back to 1.3177 with the help of some fixing demand.
USD/CAD rose for the fourth day. The ISM news was part of the story but so was a report of China blocking a Canadian agricultural shipment. That comes after the government decided to continue to pursue the extradition of the Huawei CFO.
In contrast, the Australian dollar rebounded from the ISM drop to finish virtually flat on the day as the Feb low of 0.7054 lent a technical hand. It's a big day to come with Lowe speaking about housing and the GDP report to follow.
