Forexlive Americas FX news wrap: Tame import price inflation. Middle east tension.
Forex news for NY trading on June 13, 2019
- US stocks has a late day move higher and close nearer session highs.
- WTI crude oil futures settle at $52.28
- Pres. Trump: Too soon to even think about making a deal with Iran. Pompeo: Iran did it.
- Kudlow: Overall economic burden of trade war will shift more to China than US
- US sells $16B of 30 year bonds at 2.607%
- Trump: It is up to the US to get USMCA passed
- European shares end the session with small(ish) changes
- Gold remains above the 100/200 hour MAs
- 40% of economists in WSJ survey see Fed cut in July
- Lagarde: Eurozone growth has slowed, inflation is low. This requires policy coordination
- UK leadership contest is now a race for second place
- US May import price index -0.3% vs -0.2% m/m expected
- Canada April new housing price index 0.0% vs +0.0% m/m expected
- US initial jobless claims 222K versus 215K estimate
- The CHF is the strongest and the AUD is the weakest as NA traders enter for the day
A snapshot of other markets are showing:
- Spot gold is up $8.52 or 0.64% at $1342.20
- WTI crude oil futures are trading up $1.12 or 2.19% at $52.26
- The price of bitcoin on Coinbase is trading up $133 and $8256. The high reach $8300. The low extended to $8048.75.
The three major news items of the day included:
- Tame US import price data for the month of May. The index fell -0.3% for the month. It does not include the impact of tariffs, but it suggests perhaps that exportes into the US are eating some of the impact from the tariffs. It is kinda good and bad news for the Fed. The bad news is does not bump up inflation which is a concern. The good news is the impact on consumption might not be hurt by higher prices from the tariffs. For the Fed, do they ease for fear of inflation expections falling or do they stay the same becasue the economy is still ok and people are working?
- Middle east tensions heated up with the bombing of oil tankers in the Gulf of Oman. The US intelligence lays blame on Iran. They continue to nudge the US. Japan's Abe is trying to be a broker of peace but as Pres Trump tweeted, "...it is too soon to even think about making a deal. They are not ready, and neither are we!" Crude oil was higher and so was gold in reaction to the news
- Boris Johnson is the front runner for the Tory PM replacement as he got 114 of a possible 314 votes. The next stage survivors are Johnson 114, Hunt 43, Gove 37, Raab 27, Javid 23. Hancock 20, Stewart 19. So BoJo has a head start, but assuming he goes on to being the choice will it be enough to unite the party (see Adam's post here). The GBPUSD is ending the session lower and stayed below it's 100 hour MA (at 1.27015 - see blue line in the chart below). The 100 and 200 hour MA are converging near the 1.2700 level. Staying below that area will keep the sellers more in control for the pair.
In other economic news today, the initial jobless claims remain steady at lower levels in the current week.
The strongest currency for the day was the strongest currency at the start of the NY session. The CHF benefitted today by SNB which was a little more hawkish. The CAD was also higher on the day but gave up larger gains on crude oils move back down (crude ended higher but off the $53.45 high).
The weakest currency of the day was also the weakest currency at the start of the NY session. The AUD was hit today on the back of mixed with a softer bias employment data. The unemployment rate ticked up to 5.2% (the RBA would want to see that rate more toward the 4.5% area). There were higher job gains, but most were in the part time sector. That hurt the AUD.
In the US and European stock market, the US indices closed higher, while the European indices - sans the German Dax, Portugal, PSI 20, and Italy's FTSE MIB - closed near unchanged levels.
In the new day, the markets will be influence by China retail sales in employment, while in the NY session the US retail sales will be of great importance.