Forex news for New York trading, 15 April 2015:
- US Empire manufacturing index -1.19 vs. 7.17 estimate
- US industrial production falls -0.6% vs. -0.3% estimate
- Beige Book: Activity expanded across most regions
- Canada existing home sales for March rise 4.1%
- NAHB housing market index (April) 56 vs 55 estimate
- Canada Feb manufacturing sales -1.7% vs +0.1% expected
- Fed's Bullard: Now may be a good time to begin raising rates
- Bullard: Fed will go slow and actions are data dependent
- Fonterra milk auction GDT price index falls 3.6%
- Greece cut to CCC+ from B- by S&P; outlook negative
- US EIA crude oil inventories +1294K vs +3600K expected
- Schaeuble moves the goalposts for a Greek deal
- Gold up $10 to $1203
- WTI crude up $2.56 vs $55.85
- S&P 500 up 11 points to 2106
- CAD leads, USD lags
Bank of Canada:
- BOC leaves rates unchanged
- Sees return to full capacity at end-2016 (same as before)
- Lowers 2015 growth estimate to 1.9% from 2.1%
- Boosts 2016 to 2.5% from 2.4%
- Sees Q3 inflation at 0.8% vs 0.3% prior
- Sees Q4 inflation at 0.9% from 0.5% prior
- Risks to inflation outlook 'are now roughly balanced'
- Poloz Q&A: He's looking through impact of oil on inflation
Draghi/ECB:
- ECB leaves key interest rates on hold
- Draghi says QE will run until sustained adjustment in inflation
- Draghi: Latest data says economy has gained momentum
- Risks surrounding Eurozone have become more balanced based
- Draghi says no backing down from QE target
- Draghi Q&A: Worries about bond scarcity are 'a little exaggerated'
- Draghi: ECB QE intended to run through 2016
- Draghi cites improvements in breakevens
- In pictures: Draghi accosted by ECB protestor
- ECB protestor revealed
- Five takeaways from the ECB
- Germany's Schaeuble says the ECB "can only buy time"
That's a lot of headlines and that was the kind of day it was. Markets were in overdrive, especially the Canadian dollar and oil.
The ECB press conference wasn't a big event. There weren't many questions to be answered but the big ones were whether the ECB could find enough bond supply and if they would consider cutting the deposit rate further. The answer to both was 'no' and that was a mild positive for the euro.
During the press conference US industrial production data hit and that sparked a big selloff in the dollar the pushed the euro up to 1.0675. As the day wore on, European sellers of the euro were evident and it sagged back to 1.0585. There was some worry about a hawkish/optimistic Beige Book but it wasn't and that sparked day in a fresh push to the euro back to as session high at 1.0700.
Cable was very strong for the second day as election worries are wiped out. The first push came after IP and stops above 1.4800. A 50 pip correction followed and then a fresh rally to 1.4850 and it looks to close near the highs, partly on EUR/GBP selling.
USD/JPY hits stops below 119.10/00 and quickly fell to 118.79 but formed a base there and bounced back to 119.15. It wasn't the focus of the day but it's creeping toward the bottom of the range.
A big factor was USD/CAD. Ahead of the BOC there was a soft manufacturing report and that added to jitters about a surprise cut and boosted the pair above 1.2550. The BOC wasn't dovish at all and really worked to remove and expectations about rate cuts over the next six months. Forecasts were better than expected and he avoided talk of taking out more insurance in the press conference. In addition, oil absolutely busted out and it was just the perfect day for the loonie. Stops run all the way down to 1.2281.
Even AUD got in on the fun in a rip up to 0.7700 (but not touching the big figure) as the dollar got hammered across the board. The move up from 0.7620 took only about 30 minutes and there has been a slow fade to 0.7674 since. It's all about the PBOC from here.
Plenty of drama today in photos.
Plenty of drama today:
