Forex new for North American trading on November 8, 2021
- Fed report on near-term financial risks: virus, interest rates, China's real estate sector
- All major indices close higher once again
- Fed's Evans say if inflation expectations increase a lot it'd make sense to think about a 2022 rate hike
- Australia's October NAB business confidence 21 vs 13 last month
- Oil continues to shrug off White House threats, closes higher
- MUFG trade of the week: Sell GBP/CHF
- Fed's Evans: Much of the current surge in inflation is temporary
- U.S. Treasury auctioned off $56 billion of three year notes at a high yield of 0.750%
- More from Feds Bowman: Inflation has remained high with some forces to remain well into next year
- Bank of England's Bailey: Much of the rise in inflation has to do with reopening
- Fed Governor Bowman: Likely to see higher inflation from housing for a while
- Feds Harker (Voter 2023): Does not expect fed to raise rates until after taper
- European shares close mixed. German Dax near unchanged. France's CAC closes higher
- New York Fed survey on the economy sees one year inflation expectations higher and at a new high
- Fed Quarles to resign at the end of December
- No comments on the outlook from Powell in prepared remarks
- US October employment trends 112.2 vs 110.4 prior
- Fed's Clarida: Benchmarks for rate hikes could be met by end of 2022
- Bitcoin extends above the April high, but stays below the October all-time high
- US Energy Sec: "Hopefully, there will be an announcement" on actions this week
- Fed's Bullard: Expect more than 4% GDP growth in 2022. Sees 2 rate hikes
- ECB's Lane: Extensive accommodation is needed to build up inflationary pressure
- The NZD is the strongest and the CHF is the weakest as NA trading begins
- ForexLive European FX news wrap: Dollar mixed in quiet, steady markets
There was a number of Fed speakers today a few days after the FOMC decision last Wednesday. The Fed at that time start to taper process but comments from Fed's Powell suggested there is no hurry in raising rates until at least the taper is complete. Feds Clarida said that rates would likely not rise until perhaps the end of 2022. Feds Harker said that he does not expect the Fed to hike rates till after the taper. Fed Evans said that much of the current surge in inflation is temporary, but did that inflation expectations increase a lot, it would make sense to think about a 2022 rate hike (but gave no time table). The most overly hawkish Fed member Bullard said he expects 4% GDP growth in 2022 and 2 rate hikes.
Although rates may rise, the markets seem comfortable with the idea that they may rise, but with rates at 0.25%, the markets can handle it. That is the feeling for now at least.
In the US debt market today, the US yield curve flattening the bed with the five year up 6.5 basis points while the 30 year fell -0.2 basis points. The U.S. Treasury auctioned off $56 billion a three year notes at 0.75%. That was one basis point above the WI level at the time of the auction and helped to push yields up a little bit on the disappointment.
US stocks were somewhat uninspiring today with the S&P up only 0.09% and the NASDAQ up only 0.07%, but each was still good enough for another record close. The Dow rose by 0.29% which led the Big 3 indices and closed at a record as well. The Russell 2000 rose by 0.23% and it too closed at record. Some milestones reached today:
- The S&P and Dow reached new all time record highs
- The NASDAQ close higher for the 11th consecutive day
- The S&P closed higher for the eighth consecutive day
- NASDAQ index closed at a record high for the 44th times in 2021
- S&P index closed at record high for the 65th time in 2021
- Dow industrial average closed at a record high for the 44th time in 2021
In the forex, the NZD was the strongest of the major currencies while the CHF was the weakest.
Some technical levels into the new trading days to eye:
- EURUSD: The EURUSD peeked above the 200 hour MA at 1.1588 on a number of hourly bars in the US session but could not sustain momentum. The prices currently trading at 1.1586 which is just below. The 100 hour MA is below at 1.15695. It would take a move back below that level to spoil the correction higher party for the buyers.
- USDJPY: The USDJPY fell below the 38.2% retracement of the October trading range at 113.211. The low reached to 113.079, but could not go any further. For shorts who see lower levels risk would be the 113.396 high of the swing area between 113.21 to 113.396. Move that level and there should be disappointed sellers getting out. On the downside 113.00 and 112.754 are the next targets
- GBPUSD: The GBPUSD is closing right near the falling 100 hour MA at 1.35607 after stretching as high as the 38.2% retracement of the move down from the October 20 high at 1.35803 and finding sellers. In the new day (and going forward) it still takes a move above the 38.2% retracement to increase the bullish bias (the minimum retracement target if the buyers are to take more control).
- USDCAD: The USDCAD traded within a 30 pip trading range with the 200 day moving average 1.24748 as resistance above and the 100 hour moving average at 1.24339 as support. In the new trading range those levels will be the upper and lower targets. On a break of either, look for momentum.
