Forexlive Americas FX news wrap: US jobs impress. ISM does not, but stocks love it
Forex news for NY trading on November 1, 2019
- The major indices are going out at the session highs. Nasdaq and S&P records
- The major earnings releases are over. Disney leads next weeks schuedule
- CFTC Commitments of Traders: GBP shorts continue to be slashed
- Fed's Williams: Economy is in a very good place; it is strong
- WTI crude oil futures settle at $56.20
- What is on the economic calendar next week?
- SF Fed's Daly: US wage growth of 3% is good news
- Baker Hughes US rig count 822 versus 825 estimate
- Fed's Clarida: Repeats that US economy, Fed policy is in a good place
- European shares end the day with solid gains
- The NY Fed Nowcast of 4Q GDP comes in at 0.8% vs 0.9% last week
- Atlanta Fed cuts GDP 4Q forecast to 1.1% from 1.5% previously
- Kudlow says there have been no conversations to get rid of Powell
- US construction spending for September +0.5% versus 0.2% estimate
- US October ISM manufacturing index 48.3 vs 48.9 expected
- Fed's Kaplan says he's concerned about high levels of corporate debt
- Fed's Clarida: The US economy is very resilient
- Canada October Markit manufacturing PMI 51.2 vs 51.0 prior
- Boston Fed's Rosengren explains dissent on rate cut
- US October non-farm payrolls +128K vs +85K expected
- The NZD is the strongest and the CAD is the weakest as NA traders enter for the day
In other markets, the snapshot at the end of the week is showing:
- Spot gold is $0.17 or 0.01% at $1513.11
- WTI crude oil futures surged by $1.95 or 3.60% at $56.13
The US jobs were impressive. The ISM manufacturing index was not, but the stocks loved that people are working but the Fed will not be tightening any time soon, and may ease if the risks to the downside materialize or inflation stays contained.
- Nonfarm payroll rose 128K vs 85K estimate. Moreover,the two-month revision was +95K. This was despite -41.6K from the GM strike. The average hourly earnings rose 53.0 percent year on year. The unemployment rate remained low at 3.6% (a tick up from 3.5% record low last month).
- The ISM data was not that great with the number below the 50 level for the 2nd consecutive month. As good as the employment number was, the ISM was bad. The employment component was at below 50 at 47.7. The prices paid fell to 45.5.
Although one was good and one was bad, the stock market loved that potion. Afterall, people are working, earnings are up, but manufacturing and prices were not so great. That keeps the Fed on hold for a long time and keeps the door open for more easing down the road IF the inflation does not materialize (or goes down). Remember core PCE yesterday was at 1.7%.
The net result in the stocks was an up 1% or > for the major indices and record closes for the S&P and Nasdaq. The Dow rose 300 points too, and sits just 13 points from a new all time high for it. If it weren't for Boeing - which is muddling around unchanged on the year when the indices are up 20% or so - the Dow would be making all-time highs too (Boeing has a big weight in the Dow calculation).
Anyway, the estimates for GDP from the NY Fed and the Atlanta Fed corraborated with the sluggish GDP idea with estimates for 0.8% and 1.1% respectively. Admittedlly, it is early, but it is not what the Fed wants - especially with inflation not running.
In the Forex, the NZD is ending the day as the strongest of the majors today. The JPY is the weakest. The USD was lower with the exception of the rise vs the JPY (helped by stocks) and the GBP (some political care in the GBP today).
For the week in the forex this week, the AUD and the NZD ran neck-and-neck for the strongest of the majors, while the CAD was the weakest. The USD was also mostly lower with the exception of a 0.63% gain vs the loonie.