Forex news for NY trading on February 13, 2019
- Goldman Sachs on the factors posing risks to US growth (recession probability is low)
- Nasdaq bounces off of unchanged in some late day selling
- RBNZ Orr: Interest rate outlook is balanced. NZDUSD trades at NY session lows.
- AUDUSD completes its up and down lap before the close
- Crude oil futures settle the day at $53.90
- US monthly budget statement shows a deficit of -$13.5B vs -$11.0B estimate
- EU Tusk: Waiting for concrete, realistic proposals on how to break Brexit impasse
- More from Fed's Harker: I am not a fan of tariffs
- Trump: Will make determination on whether to sign funding bill when he gets it
- Fed's Harker: Sees 1 hike in 2019 and 1 in 2020 as appropriate
- UK FTSE trades at the highest level since Oct 10. European indices higher today
- Weekly DOE crude oil inventories show a build of 3633K vs 2400K est
- Mark down March as a meeting time for Trump/Xi
- More Mester: There is a desire to slow the balance sheet runoff
- Nasdaqs sniff of the 200 day MA finds sellers
- Fed's Bostic: One more increase for 2019 is my projection
- Spain PM calls Friday cabinet meeting, snap election coming
- Comments from Fed's Mester are the same as yesterday
- White House says final US-China trade deal depends on Trump-Xi meeting
- Canada Teranet house price index +2.2% y/y vs +2.5% prior
- US January CPI 2.2% vs 2.1% y/y expected
- The NZD is the strongest and the JPY is the weakest at the start of the NA session
A snapshot of other markets is showing:
- Spot gold fell -$4.78 or -0.36% at $1306.
- WTI crude oil is up $0.91 or 1.71% at $54
In the US/European stocks today, the results were mixed in the US. European shares kept the week's winning streak alive. In the US, the Nasdaq closed near unchanged and near the day's lows. The price high tested the 200 day MA at 7462 today, but stalled. The S&P rose 0.30% which was off the highs, but the index remains above its 200 day MA at 2744 (closed at 2753.02). The Dow closed near the middle of the day's range at +0.46%. The Italy FTSE Mib and UK FTSE were the big gainers in Europe. For the UK FTSE, the price high today was the highest since November 2018. This despite concerns about no-deal Brexit.
Today, US CPI came in about as expected on the MoM, but a little higher YoY. Feds Mester and Bostic and Harkin alls spoke today. Both Harkins and Bostic said they see one hike in 2019 and one in 2020 with focus on the data. They all agreed that sitting tight is probably warranted.
That makes sense given the uncertainty from China/US trade, and slower growth in Europe. If the dollar gets stronger and stronger, the headwinds from it, may also start to weigh more on the US economy. Finally add the lag from the hikes of the past and although things look pretty good in the US, the risks (which Fed officials speak of) are to the downside.
Looking at the rank of the major currencies, if it weren't for the NZDs run higher (it came off the highs too), the USD would have had a pretty good day. The biggest gains for the greenback were against the EUR (up 0.55%), the JPY (0.47%) and GBP (0.35%). It did fall by 0.91% vs the NZD which gave up nearly half it's gains of the day, by the close. The RBNZ did not waver more to the dovish side in their statement today, and that ignited a short covering rally in the NZDUSD (the pair based against the 100 day MA over the last two days and moved above the 200 day MA which also helped the covering run higher).
Some technicals:
- EURUSD fell below and closed below the 1.1262-695 area which has been home to lows in November, lows in December and lows in the current month. Staying below the 1.12695 would be ideal for shorts in the new day.
- The GBPUSD stalled just ahead of the 200 hour MA at the highs today (at 1.2958), then rotated back down and through the earlier lows for the day at 1.2873. The low for the day reached 1.2843. The 50% of the 2019 trading range comes in at 1.2835 The low from Tuesday reached to 1.2832. A break below each in the new day will open up the downside for more selling.
- The USDJPY continued it's march higher helped by higher yields (up 2 to 3 bps), higher inflation, stocks doing ok and positive technicals. The pair reached a high of 111.048 which was just above a topside trend line on the hourly chart. The 200 day MA is an alluring upside target at 111.27 in the new day. Be aware. There may be some stall there. On the downside, watch the trend lines on the hourly chart below.
Have a good day, night.
