Forex news for NY trading on September 9, 2016
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- US stocks close near low level. S&P falls more than 2% on the day
- CFTC commitments of traders: EUR shorts increase
- Top 5 events /releases for the week starting September 13
- Crude oil futures end the session/week at $45.88
- Forex technical analysis: GBPJPY showing some cracks from stocks
- Monday at 1 PM ET will be busy....
- Did I mention Atlanta Fed GDPNow forecast has declined to 3.3%?
- Feels awfully tippy at the moment
- Baker Hughes US oil rig count 414 vs 407 prior
- USDJPY slowly unwinding the Tarullo tantrum but are we heading for FOMC trouble?
- Floppy Friday for Europe's stock markets at the close
- SocGen cautiously bullish USD but says it's all about the BOJ now
- Fed's Kaplan: Repeats that Fed can afford to be patient
- Germany bund yields rise above 0%
- GBPUSD falls into the lap of the August trend line
- Fed's Tarullo: I've been characterized in the 'show-me' camp
- Fed's Tarullo says there's room for robust discussion on whether economic momentum is holding up
- July 2016 US wholesale inventories 0.0% vs 0.0% exp m/m
- The 'Fed fear' trade is on
- Fed's Rosengren Q&A: Hard to see the FOMC hiking too rapidly
- Former Fed President Gary Stern says communication is an increasing problem
- The USDCAD moves to the upside after better (?) employment...
- Canada Aug employment +26.2K vs +14.0K expected
- Fed's Rosengren: Current policy increases the chance of overheating
- The strongest and weakest currencies as NA traders enter for the day
Stocks got hammered (S&P down 2.45%, Nasdaq down 2.54%. The Dow was down nearly 400 points).
Bond yields surged (10 year yields up 7 basis points).
The USD rose against all the major currency pairs and was the strongest of all the major currencies.
All was started with comments from Fed's Rosengren who said that a gradual policy tightening was likely to be appropriate and that he saw risks to overshooting on economy's growth. That got bond yields rising and stocks (pre-market open) falling. The US dollar started to move higher as well.
Later Fed's Tarullo said that he wants to see actual evidence that inflation will rise. That seems a bit more dovish as the Fed does not see PCE inflation moving above the 2.0% target in 2017 and project 2.0% in 2018. He might be waiting for a while.
On Monday be aware that some other Fed officials will be speaking before the Fed puts the muzzle on the mouths with a week to go to the Sept 21 decision. Fed Governor Brainard will speak along with Minneapolis Fed President Kashkari. Then Fed speak will go quiet. SHHHHH.
In other fundamental news today, the Canada employment report showed higher job growth (+26.2K ves 14.0K estimate), but the CAD got weaker as oil prices tumbled over 3%.
What about some of the other currency pairs?
The AUDUSD and the NZDUSD were laggards today. Blame it on risk off. Blame it on technicals. Each of them fell by over 1% with the AUDUSD the weakest of the bunch (down -1.35% on the day) and the NZDUSD down 1.01%.
The EURUSD? That pair had barely a 30 pip range at the start of the NY day, a few hours later the range was extended to 87 pips. Thank you Mr. Rosengren. The move lower took out the 100 day MA. It was only on Tuesday that the price surged above that level. The break took the price toward the next target at the 200 hour MA where buyers entered. Activity was more two-way the rest of the way, with the price trading mainly trading above the 100 day MA at the 1.1209 level but below the 200 hour MA at the 1.1231 level.
The GBPUSD also moved lower on the dollar buying. For it, the 200 hour MA at the 1.3276 level (at the close) was a break point and for the final 7 or so trading hours, became the ceiling for the pair. That is the bearish story line. Stay below and we go lower. The bullish story line is that for the final 6 hours of the trading day, the 50% of the move up from the August 30 low (at 1.32506 level) provided support. The levels will give traders something to base a bias on during trading on Monday. The BOE meets next week (Thursday decision).
The USDJPY did not get lost in the dollar buying, even though you never know if the stock market tumbles will lead to the USDJPY tumbles as well. There was a little of that as the move above the 200 hour MA at the 102.83 level could not be sustained. However, given the >2% declines in equities and nearly 400 Dow points, the temptation to sell all things with JPY at the end, was somewhat contained. Time will tell if Asian Pacific traders will feel the same way if there is a contagion in the opening on Sunday.
Wishing all a happy and healthy weekend. Good fortune with your trading next week
