Session Wraps - Major Forex Headlines wrapped up by trading session

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Forex news for North American trade on January 15, 2020:

Markets:
  • Gold down $21 to $1826
  • US 10-year yields down 4 bps to 1.09%
  • WTI crude down $1.43 to $52.14
  • S&P 500 down 27 points to 3768
  • USD leads, NZD lags
There was a decided risk off tone in markets and that meant a bid in the US dollar even as Treasury yields slid. It was a classic 'sell the fact' move after Biden's big stimulus plan, something I warned about.

Midway through the day, commodity currencies and risk assets tried to stage a rally and they made some headway before the selling returned later.

The economic data was a reminder of how much the government is supporting consumption as retail sales missed badly. There were also reminders of inflation pressures in the PPI and U Mich data, but the bond market appears to be moving on from that theme.

There wasn't much political fallout from the Biden plan with few Senators speaking for or against it. Take that as a good sign for Biden but the market wasn't in that kind of mood, perhaps with the long weekend taking away some of the positive sentiment.

Tune in for the Chinese data on the weekend and a thin session on Monday.


Forex news for North American trade on January 15, 2020:

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Author: Justin Low

Forex news from the European trading session - 15 January 2021

Headlines:

Markets:

  • JPY leads, AUD lags on the day
  • European equities lower; E-minis down 0.3%
  • US 10-year yields down 3 bps to 1.098%
  • Gold flat at $1,846.50
  • WTI down 1.1% to $52.98
  • Bitcoin down 2.8% to $37,675

EOD 15-01
It was a quiet session for the most part as the market continues to digest the Powell and Biden narratives from trading yesterday.

Risk stayed more defensive as investors reacted with some skepticism that Biden would be able to gather bipartisan support to push forward with his full $1.9 trillion proposal.

European equities retreated alongside US futures, while 10-year Treasury yields kept lower throughout and is near the lows under 1.10% ahead of North American trading.

In FX, the dollar held firmer alongside the yen and the franc. EUR/USD eased from 1.2140 to 1.2116 and is testing daily support from the 21 December low @ 1.2130.

USD/JPY eased from around 103.75 to 103.62 but is trading within a narrow range as both currencies are maintaining a modest advance on the session.

GBP/USD fell from 1.3670 levels to 1.3614 as price is now testing its 100-hour moving average @ 1.3620. Meanwhile, AUD/USD fell from 0.7760 to 0.7727 and is testing swing region support around 0.7730 currently.

Elsewhere, gold stuck around close to $1,850 as the push and pull continues around the consolidation range of $1,830 to $1,860 in trading this week.

Looking ahead, just be reminded that it is a long weekend in the US and that might factor into a bit of added caution in the market after a bit of a disappointment in anticipation for some fireworks i.e. exhaustion following the Powell and Biden risk events.

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Forex news for Asia trading for Friday 15 January 2021

The main points of incoming US President Biden's coronavirus economic rescue plan were reported a couple of hours ahead of his scheduled speech. The response of markets was underwhelming with not a lot of movement. Biden's speech later was a little more impactful, but not by much; there was a small sell off in 'risk' FX and also in US equity index futures. While outlining an enormous stimulus plan (which, of course, must pass Congress where it may be whittled down some) Biden also said it had to be paid for. He mentioned tax loopholes, though you can be sure there will be higher taxes in the mix also. For the next few months/quarters though its not about deficit concern/austerity from Biden but rebooting the health and economy of the US.

Currencies were fairly quiet, trading small ranges only. The USD and yen outperformed. 

Forex news for Asia tradingfor Friday15January 2021

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Forex news for New York trade on January 14, 2021:

Markets:

  • Gold up $2 to $1847
  • US 10-year yields up 4 bps to 1.12%
  • S&P 500 down 14 points to 3795
  • WTI crude up 72-cents to $53.63
  • NZD leads, USD lags
You start to get the feeling we're going to be doing a lot of watching the bond market this year and figure out how that filters through the FX market.

The first news that jolted the market today was initial jobless claims and it was a reminder that the jobs market still has plenty of recovering to do. It led to a steady drop in Treasury yields and the dollar.

That peaked as Powell began to speak and offered no indication of a taper. However later in his speech he highlighted some optimism about the economy and then bonds started to wild, pushing yields higher. Or maybe there were sellers waiting in the weeds ahead of Biden's big stimulus speech.

We got a leak on that topic late with a $1.9T price tag. I'd characterize the reaction to that as mixed-to-disappointing. Rates remained near the highs but stopped moving up. The dollar generally chopped sideways but remained soft.

Cable was perky again after yesterday's break and EUR/GBP was particularly soft, testing the November lows after six days of selling. Watch that level in the day ahead.

Commodity currencies were strong after initially falling at the start of New York trade. The trio of AUD, CAD and NZD all finished a half-cent higher.

Tune in at 0015 GMT to hear what Biden has to say.

Forex news for New York trade on January 14, 2021:


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