Forex news for North American trading on April 13, 2021
- S&P closes at an all time record high. Nasdaq 100 also closes at a record.
- Fed's Rosengren. No hurry for the Fed to raise rates
- WTI Crude oil settles at $60.18
- Bitcoin trades to a new all time high ahead of Coinbase IPO
- US sells 30-year bonds at 2.320% vs 2.338% WI
- Feds Barkin participates in virtual roundtable of the Ohio Valley
- Feds Harker expects slower GDP growth in 2021
- European shares end with mixed results
- Euro likely to outperform on a notable acceleration in vaccination - MUFG
- ECB's Villeroy: Causes of inflation increase are only temporary
- FDA official says 1 US death after J&J vaccine, one patient in critical condition
- J&J to delay rollout of vaccine in Europe
- BOE's chief economist Haldane to stop down
- US March CPI +2.6% y/y vs +2.5% expected
- The JPY is the strongest and the CAD is the weakest as NA traders enter for the day
The North American session started with news that the distribution of the J&J Covid vaccine was paused due to blood clots in 6 recipients. That led to a reactionary move to the downside in pre-market stocks with the "recovery stocks" leading the way lower. However, as traders realized that the reaction was probably a little much, the pre-market stocks started a rebound.
The next hurdle was the CPI data. Recall from last week the PPI numbers showed a much larger increases than expected. For the CPI, the data was a touch higher than expectations for the headline and the ex food and energy (by 0.1% for both), but the market took it in stride.
Yields which were a little higher in early NY trading started to move back down. Later in the debt market, a successful end to the auctions this week gave treasuries even more of a boost. The 30 year auction saw the yield come in 1.8 basis points below the WI level. The bid to cover was also well above the 6-month average indicative of strong demand. Yes, the yields on the auctions this week were the highest in a year or so. However, the market seems to be comfortable with the current levels. The sharp rise of the 1st quarter is at the least leveling off and fears of a 2% 10 year yield is still some 39 basis points away (after peaking at 1.774% last week and 1.702% today). Below are the near closing levels for the debt yield curve today.
The decline in yields helped to give the Nasdaq stocks a boost as it outperformed the S&P and Dow on the day. Even so, the S&P index closed at another record level but lagged the gains in the Nasdaq which is still about 170 points for the all time high reached back in February. The Dow last closed at a record on Friday of last week. European shares closed mixed with modest gains and losses on the day.
In the forex market today, the EURUSD broke outside of a narrow confining range and trended higher in the NY session. The pair is trading at the highest level since March 18 (traded up to 1.1950 area) and will be looking toward the 50% midpoint of the move down from the Feb 25 high at 1.1973 in the new trading day.
The GBPUSD tested the 100 day MA at the session lows, and rallied higher but remains in a choppy up and down quagmire as traders wrestle with the directional bias in the pair. If I could say something redeeming about the pair technically, it is the price traded the last 6 hourly bars back above the 100 hour MA at 1.37334. The 200 hour MA remains untouched since moving below that MA a week ago today. It stands at 1.37865 and would be a target on more upside momentum.
The USDJPY is closing near it's lows for the day and looks to test the lows from last week as well at the 109.00 level. The low today reached 109.012. IT will take a break below the level to increase the bearish bias, but it could be a tough nut to crack.
The USDCAD ran higher in London morning trading and peaked within a swing area above between 1.2623 to 1.2628. The price then spent the North American session moving back lower. The 100 and 200 hour MAs were broken (currently at 1.2570 and 1.2564) and selling continued until reaching 1.2526. The pair is still just above the low from early Monday at 1.2522. Can sellers kick the pair below that level and the low from last week at 1.2501 (call it 1.2500) of is the pair going to remain in the up and down range?
The NZD was the strongest of the majors today, while the USD is ending as the weakest thanks to the decline in yields.
Bitcoin surged higher today by over $3000 to a new all time high at $63769 ahead of the Coinbase IPO tomorrow (trades at $63200). A move below $61000 is needed to give sellers a minor victory from a technical perspective. You can read about it HERE.