Forex news for New York trade on September 1, 2021:
- US ADP national employment report for August 374K versus 640K estimate
- US August ISM manufacturing 59.9 vs 58.6 expected
- August final Markit US manufacturing 61.1 PMI vs 61.2 prelim
- OPEC agrees to plan on gradual output hikes
- ECB's Vasle: ECB not ignorant to the risks of high inflation
- US construction spending for July 0.3% versus 0.2% estimate
- Russian oil minister: Expects global oil market to fully restore in 2022. Crude quickly falls $1.50
- ECB Largarde: We are emerging from pandemic, with economies that are stabilized
- BOE names Huw Pill as chief economist and an MPC member
- Atlanta Fed GDPNow estimate rose to 5.3% from 5.1% last
Markets:
- Gold up $1 to $1814
- US 10-year yields flat at 1.30%
- WTI crude oil down 6-cents to $68.44
- S&P 500 up 4 points to 4527
- AUD leads, CAD lags
The ADP employment report has a terrible track record of predicting non-farm payrolls but the market bit on it once again this month, sending the dollar 30-40 pips lower across the board on the big miss in the report.
From there the dollar steadied and then made a slight recovery late in the day, particularly against the euro and pound as the risk trade faded.
Oil dropped $1.50 ahead of the OPEC meeting, perhaps on talk of more production next year from Russia's oil minister. Later, a tight US oil inventory report combined with record US oil demand put a line under crude and it slowly fought its way back. The OPEC decision was a non-event.
The loonie was pressured as yesterday's weak GDP report continues to reverberate and raise questions about the path of BOC rates. Even with all that, the underperformance of the loonie relative to its commodity cousins and soaring natural gas prices was a bit of a surprise.
In crypto, ethereum shot nearly 10% higher on a technical breakout fueled by the NFT madness. The broader space also did well.
