Forexlive Americas FX news wrap: US CPI disappoints. Draghi more upbeat.
Forex news for trading on September 13, 2018.
- US stocks close higher but off loftier levels
- Deficits soared in August but Congressional leaders have a plan to avert a gov't shutdown
- BOE Carney: A no deal Brexit could be as bad as 2008 financial crash
- Fed's Bostic speaks to reporters. Still not sure on 4th hike in 2018
- Crude oil futures settle at $68.59 per barrel
- BOE cannot cut rates to offset a "no-Brexit" deal
- US monthly budget statement -214.1B vs -$187.0B est
- More Bostic: Balanced risk to US economy
- UK Brexit Minister Raab: EU can't cherry pick bits of the negotiations
- Fed's Bostic: Rate aincreases can continue for handful of quarters
- US sells $15B of 30 year bonds at 3.088%
- Trump: Will drop Canada out of USMC (new name for NAFTA) if they don't agree to his changes
- David Tepper of Appaloosa Management speaks from Carnegie Mellon
- European stocks end the session mixed in an up and down session
- May spokesman: Deal around Chequers plan is govt's firm aim
- Trump says US "will soon be taking in billions in tariffs" from China
- What we learned from Draghi in the ECB press conference
- Draghi Q&A: Eurozone has grown above potential for some time
- ECB releases new growth and inflation forecasts
- Draghi: Data broadly confirm our assessment of convergence toward target
- US initial jobless claims for Sept 8th week 204K vs. 210K est.
- August US consumer price index +2.7% vs +2.8% y/y expected
- Canada July new housing price index +0.1% vs +0.1% m/m expected
- ForexLive European FX news wrap: Lira surges as CBRT hikes; BOE and ECB stay pat
- The AUD is the strongest. The JPY is the weakest as NA traders enter for the day
In other markets:
- Spot gold fell $-4.50 or -0.37% at $1201.80
- WTI crude oil futures fell $-1.63 or -2.32% at $68.74
- Bitcoin on Coinbase is trading higher by $129 and $6434. The high price reached $6530. That was the same high price from September 7th. The low price extended to $6295. The 200 hour moving average is currently at $6380.47. A move below that level would be more bearish in the new trading day.
In the European and North American stock markets, the European shares were mixed, while the US shares advanced. Below is a snapshot of the major indices. The NASDAQ composite index was the big gainer and 0.75%. The Italian FTSE MIB fell -0.56% and was the worst performer.
In the US debt market today, yields were marginally higher with the 5 year rising by 1 bp. The U.S. Treasury auctioned off 15 billion of 29 year and 11 month bonds at an high yield of 3.088%. The bid to cover was at 2.34X. The auction was not bad but not great either. The 30 year yield was up 0.5 bps. The 2-10 year spread was nearly unchanged from yesterdays at 21.35 bps.
A snapshot of the strongest and weakest currencies shows the EUR as the strongest. The JPY was the weakest coming into the day and extended its run higher in the North American session.
Looking at the changes and ranges fo the day, the JPY pairs are mostly near the highs for the days, led by the EURJPY and GBPJPY which are closing not only near the highs buy also up 155 and 164 pips respectively. The ranges were also well above the 22 day average (red line on the lower chart).
For the USD, it is ending the day mostly lower but mixed. While the USDJPY is closing near the highs, the dollar is closing lower and near the lowest levels for the day vs the EUR, GBP and CHF. The greenback is near unchanged levels vs the CAD and NZD, and marginally lower vs the AUD after the AUDUSD fell from higher levels earlier in the day.
There were a few catalysts for the moves today:
- US CPI was weaker than expected, pretty much across all the various breakdown. The helped to send the dollar lower. .
- At the same time (and over the course of the Draghi presser), although the ECB lowered the growth forecast by 0.1%, it was only 0.1%, and Draghi spoke repeatedly about the strong underlying momentum in the economy. That, coupled with the weaker US CPI, helped to send the EURUSD, GBPUSD, AUDUSD and NZDUSD higher. The EURUSD and the GBPUSD stayed up near the highs for the day into the close
- Trump then tweeted:
which reversed lower the AUDUSD and NZDUSD as hopes of China/US trade talks seemed less positive. Those currency pairs gave up their US CPI gains and settled into the close.
Although not having much of a market reaction, the budget deficit was nearly twice the deficit of last year/same month. Talk all you want about 4% growth from tax cuts and other stimulus, if it balloons the government deficit, it seems to be borrowing from Peter to pay Paul.
Trump poured some cold water on the NAFTA - I mean USMC, the new rebranded name for NAFTA - when he said, he would "drop the C" if Canada did not agree to his changes. It did not really have a big effect on the USDCAD (the pair traded more sideways today), but there may be a move back higher in the pair, if the hopes for progress, turns more negative.
Wishing all in the Asian region a great and safe weekend.