Forex news for near trading on February 13, 2020
- US stocks end the session down marginally
- Senators expect Trump to withdraw Shelton nomination
- Tomorrow's key economic releases for the New York session
- Bitcoin (on Coinbase) tests the 100 hour MA and bounces
- Easy money is dominating everything else. Fundamentals are dead.
- Mexican central bank lowers rates to 7.00% from 7.25%
- ECB's chief economist Lane: Euro area low interest rate phase is temporary
- Fed's Kaplan: Would be confident about 2020 outlook if not for virus
- US auctions off $19 billion of 30 year bonds at 2.061%
- Kudlow: US may get to 3% growth baseline assumption later in year
- China mulls delaying annual parliament meeting
- European shares close mostly lower but off lows for the day
- UK Spokesman: PM has created a new Downing Street economic team
- Coronavirus fears hit US stocks on the opening
- Initial jobless claims 205K versus 210K estimate
- US January CPI +2.5% vs +2.4% y/y expected
- The GBP is the strongest and the NZD is the weakest on shift to risk aversion
In other markets:
- Spot gold stayed bid for most of the day on coronavirus fears (I guess). The price is currently up $10.16 or 0.65% $1576.21. The higheached $1578.34. The low extended to $1563.71
- WTI crude oil futures are also trading higher by $0.44 or 0.84% of $51.61. The high reached $51.96. The low extended to $50.60
The markets were worried early in the session on the back of the sharp rise in infected and increase in the number of deaths from the coronavirus in China. Stocks were lower in premarket trading, Bond yields were lower, Gold was higher. In the forex, the currency flows showed signs of risk aversion with the NZD and AUD lower. The JPY was higher (although the CHF was not). The USD was mixed.
However, after the stocks opened lower, equities started to rebound (or at least not get any worse). The Pavlovian reaction on dips in equities these days is just buy the dips. The price of equities moved higher and even turned positive on the day for the broader S&P and NASDAQ indices. However, when the Fed announced that they were going to taper back overnight term repos, those gains evaporated in the major indices are closing lower on the day. Overall, the major indices declined modestly with the Dow industrial average faring the worst at -0.43%. The NASDAQ and S&P index had much more modest declines of -0.16% at -0.14%. Below are the summaries for the North American and European equities today.
I can't say that the other markets reacted in the same.
The dollar pretty much kept the same order of strength and weakness with the GBP and JPY the strongest, while the NZD, and AUD were lower.
The pound was boosted by a shakeup of the PM Johnson economic team. Out as chancellor of the Exchequer went Sajid Javid and in came Rishi Sunak (along with an economic team in line with PM Johnson plans for fiscal support).
The market interpreted the shift as good for growth especially from the fiscal side. As a result, the GBP surged higher.
The move higher in the GBP spilled over into the EURGBP. That pair fell 82 pips today, and helped keep the EUR in general overall, under pressure.
For example, the EURUSD is closing near the lows for the day at 1.0839 and is moving closer to filling an old price gap going back to May 2017 that has never been filled at 1.0777 to 1.0820. Be aware in the new trading day. The EURJPY and EURCHF are also closing near lows for the day
In the US debt market, so yields open much lower. The 10 year yield reached a low level of 1.566%, but did move back higher and is closing near 1.616%. The treasury did auction off $19 billion of 30 year bonds at the lowest level on record. Despite the low yield, the demand was strong with the high yield trading below the WI level and the bid to cover also quite strong.
On the economic front today, the CPI rose to 2.5% from 2.3% last month with the ex food and energy staying steady at 2.3%. Initial jobless claims continue to impress with claims coming in at 205K versus 210K estimate. No problem in the job sector.
