Session Wraps - Major Forex Headlines wrapped up by trading session

Forex news for Asia trading Wednesday 16 January 2019

Brexit:

After the gyrations for GBP surrounding the UK parliament's vote on PM May's deal Asian markets were more subdued on the currency. There were plenty of news and opinions pieces bandied about but after a 50-odd point drop in the Asian morning for cable it pretty gained a lot back and is net little changed on the session

'Little changed' won't last in the hours ahead as another tumultuous day approaches in the Commons, with at least one 'no confidence' vote to occur.

Brexit related posts today (read from the bottom up for chronological order):


Other:


Yen gained in the Tokyo morning on some (not huge) safe-haven flows in the face of Brexit uncertainty. The move was limited, though, a 30 or so point drop for USD/JPY in total. Currencies fell soon after, providing a double whammy move for yen crosses. Again, the moves were not large and have mainly recovered to be little change for AUD, CAD, EUR, NZD on the session.

There were plenty of stimulus-related announcements and comments from China today (see bullets above) ... apart from one official saying deleveraging efforts will continue.

Still to come:

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Forex news for NY trading on January 15, 2019

In other markets, the snapshot is showing:

  • Spot gold, $-2.46 or -0.19% at $1289.23. The price is well off the high for the day at $1295.08
  • WTI crude oil futures rose $1.56 or 3.09% at $52.07. The low reached $50.64. The high extended to $52.30
  • Bitcoin on Coinbase is trading down $-100 and $3565. 
In the US stock market today, the Netflix bumped up subscription costs for consumers from $11-$13 and it helped to support the overall market.   Netflix is closing 6.52%. Other big gainers include Citigroup, +4.17%, Amazon, +3.55%, Adobe, +3.33%, ,  alphabet, +3.11% Tesla, 3.0% and Microsoft, +2.90%.  All the big names road the wave caused by Netflix.

The gains helped to push the NASDAQ composite index +1.71%. The S&P index also gained a healthy 1.07%.  After the horrible December, the US major indices have healthy gains to start the year (Nasdaq up 5.86%, S&P up 4.13% and Dow up 3.16%).  

European shares also close mostly higher (although at more subdued pace). The only major indices to close in the red today was the Italian FTSE MIB (-0.03%).

In the US debt market, yields on the longer end moved higher. The shorter end changes were more subdued (2 year are ending down -0.4 bps).


The yields in Europe fell with the exception of Italian notes which rose 3.1 bps.

The weakest currency of the day is CHF. The strongest currency of the day was the GBP.  


That rise in the GBP came despite a resounding defeat of PM Teresa May's Brexit proposal by a vote of 432-202.  That defeat was even larger than the pundits expected, and led to the calling of a vote of no-confidence by Labour's Corbyn (the vote will take place at 1900 GMT tomorrow after debate).  

So the GBP got hammered, right?

Well before the vote and immediately after it, the GBPUSD had moved sharply lower. The range was 250 pips. The low was down about -182 from the close from yesterday.  That's semi hammered.  

However, perhaps because of short covering, or perhaps in response to the thought that May would survive the no-confidence vote (remember her party had a vote of no-confidence a few weeks ago that she passed), and that she would tweek the deal/get concessions from the EU to avoid a hard Brexit and then pass Deal #2 in parliament, the GBPUSD started a "hard" recovery. That is a lot of hope.

The run higher did stall just 4 pips short of the 100 day MA which may put a nice ceiling in place after the up and down and up again day today. In the new day the 100 day MA willl be a key barometer for the bulls and bears. Stay below and a rotation back lower cannot be ruled out.  A move above and depending on the shorts out there, there might be more of a squeeze.  

PS. the EURGBP also stalled at a key "day MA". For it, the 200 day MA stalled the fall at 0.8857 and bounced modestly into the close.  

So both the EURGBP and GBPUSD saw key MAs tested and both stalled moves.  Maybe the high for the GBP is in place, at least before tomorrows Brexit Fireworks, Part II.

In other pairs, 
  • The EURUSD tested the 61.8% of the move up from the December low at 1.13834 and bounced. The rebound did stall just under the 50% retracement at 1.1419 though. The two levels will be eyed for a break in the new day.
  • The USDJPY in the NY session tested the 200 hour MA twice and held (at 108.37 currently.  The highs for the day came in at 108.747 and then 108.76. The end of day rally stalled at 108.73.  Three highs intraday with 3 pips of each other.   We are trading at 108.658 into the close.   Stay below the ceiling is bearish. Move above and sellers against the ceiling, will likely cover and push the price higher.
  • The AUDUSD bottomed two pips above its 100 day MA and moved higher into the close. The run higher took the price back above its 100 hour MA at 0.71954 (trading at 0.7202). Stay above the MA is more bullish. Move below in the new day and there could be a rotation lower.
Other fundamental news was overshadowed by the Brexit vote, but
I am not sure the day went as scripted but it was quite a ride - espeically for the pound. 


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GMTAuthor: Justin Low

Forex news from the European morning session - 15 January 2019

Headlines:

Markets:

  • CAD leads, CHF lags on the day
  • European equities mixed, near session lows; E-minis up 0.1%
  • US 10-year yields down 1.8 bps to 2.685%
  • Gold flat at $1,291.02
  • WTI up 1.1% to $51.08
  • Bitcoin down 0.5% to $3,646


It was a session of topsy turvy action as risk sentiment completed its transformation from being more positive to jittery following JP Morgan's disappointing earnings. Meanwhile, the pound also saw plenty of see-saw action as volatility in the currency heightens ahead of the meaningful vote later today.

Risk currencies led the charge early on with AUD/USD holding around 0.7220 before slipping to 0.7200 mid-way through the European morning as risk sentiment was tempered a little. But as JP Morgan's earnings result led the drop in equities, the pair fell to a low of 0.7188 where it trades close to now.

USD/JPY also saw gains erased as a result of fading risk optimism with the pair beginning the session at the highs of 108.75 before slowly erasing those gains to trade near 108.30-40 levels ahead of US trading.

The loonie remains rather resilient with USD/CAD still trading around mid-range today at 1.3270 currently as oil prices remain buoyed despite the latest shift in risk sentiment. Oil is still up by 1.3% on the day currently.

But the currency in focus is the pound and traders are looking to be all over the place ahead of the meaningful vote later today. Cable began the session around 1.2900 before slipping to a low of 1.2829 and then bouncing back to 1.2875 before gyrating around 1.2830-60 levels as Brexit headlines are contradicting one another from all different sources today.

Most news sources are reporting on different stances on things like the Murrison amendment to the margin of May's defeat later (some claiming 60 votes while some are claiming 150 votes). According to them, their sources are "trusted" which is leaving little for traders to go on as there isn't any straight story line ahead of the vote later.

The simplest way to look at this is to just brush aside all the rumours and "sources" talk. There isn't going to be anything that changes significantly ahead of the vote later. All that matters for the pound's direction next will be the margin of May's defeat later and that is something I believe no "source" will be able to predict accurately.

What happens next is still very much up in the air as Labour could table a confidence motion or we could see things just settle down as May angles for a possible second vote on a revised deal.

In the meantime, keep an eye on risk sentiment and US stocks as well. With markets in a jittery mood now, all it takes is just one more negative headline to tip things over the edge.


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Forex news for Asia trading Tuesday 15 January 2019

After yesterday's poor China data (exports, imports slump) we got supportive comments rolled out of China today from the PBOC, the NDRC, and the Ministry of Finance. The comments were nuanced and perhaps not rippingly bullish, but markets took heart nevertheless and ripped yen crosses higher along with stocks.

AUD, EUR, NZD, CAD, GBP all higher against the USD and the yen.

Gold is little changed on the session.

In the earlier part of the session, coinciding with the London evening there were plenty of Brexit news items ahead of today meaningful vote. ICYMI the vote is expected in the 1900-2100GMT time window, though the UK parliament has not announced this as firm timing. I've collated all the Brexit info posted from late US time through the Asian morning if it helps (and linked above also):

Still to come:


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