Top forex news and headlines for October 20, 2014:
- Fed’s Fisher: I don’t see any reason not to curtail QE at October meeting
- German and French finance ministers warn on economy
- Brazilian election polls extremely close
- Canadian August wholesale trade sales +0.2% vs -0.3% exp
- Oct Belgian consumer confidence -12 vs -11 prior
- Woman in Ireland taken to hospital with suspected case of ebola
- No comments from the Fed’s Powell at community banking event
- Rapid moves in currency undesirable says BOJ’s Umemori
- IBM warns on earnings
- Goldman Sachs: We were wrong on bonds
- UK SME’s still tightening their belts says BOE lending report
- Gold up $7 to $1246
- WTI crude flat at $82.77
- Brent crude down 81-cents to $85.35
- S&P 500 up 17 points to 1903
- NZD leads, CAD lags
Two Fed members in Fisher and Rosengren tried to pull back chatter about the Fed keeping QE going and you’d think that would boost the US dollar. At the same time IBM had a poor earnings report with negative comments on the future and you’d think that would hurt overall sentiment.
In the end, the dollar sagged and stocks climbed nearly 1%. The market is happy to continue unwinding the worries from last week — at least for now. But it’s tough to say why, for sure there’s optimism ahead of Apple results but that’s hardly the foundation of a broad market rally.
The bond market was tepid with yields down 1-2 bps across the Treasury curve. Periphery yields also pushed higher, led by Portugal on talk of liquidation related to Espirito Santo.
The story in FX was a grind lower in the US dollar. EUR/USD started in the 1.2775 range and pushed as high as 1.2816 before sagging back to 1.2805 late. Cable was even more perky in a run up to 1.6175 from 1.6135 after the UK close.
The commodity currencies were buoyant with the exception of the loonie. That’s a reflection of soft oil prices, for the most part. Offers in the 1.1290/1.1300 range are also capping the upside.
The Australian dollar perked above 0.8800 and will be in focus with Chinese GDP data coming up.
