ForexLive Americas FX news wrap: Taken out to the woodshed
Forex news for Americas trading on August 14, 2019:
- The White House's plan to spur growth is to pressure Powell - report
- Global Times editor: I doubt China will resume large-scale farm purchases
- Former Fed Chair Yellen: US economy has enough strength to avoid recession
- Fed's Bullard: Economic outcomes are quite good for the United States
- US EIA weekly oil inventories +1580K vs -2500K expected
- Navarro: People just need to be patient on US-China trade talks
- US import price index +0.2% m/m vs -0.1% m/m expected
- Wilbur Ross: Tariffs delay is to avoid disrupting Christmas season
- Gold up $13 to $1514
- WTI crude down $1.96 to $55.14
- US 10-year yields down 11 basis points to cycle low of 1.59%
- JPY leads, AUD lags
- S&P 500 suffers worst day of the year, ends down 86 points, or 2.93% to 2480.5
It wasn't so much a headline driven market today, nor were there fresh worries on trade. Instead risk assets were swamped on global growth concerns above soft German GDP and Chinese industrial production.
The mode in markets was a trickle followed by a flood. S&P 500 futures were 37 points lower at the open but the bottom fell out in time. All the talk was about the brief inversion of 2s10s, which is a classic yield curve warning.
For all the pain in equitiies and the huge moves in yields, it wasn't that dramatic in FX. USD/JPY fell 75 pips to 106.00 after touching a low of 105.66. That drop didn't even erase the gain a day earlier.
Commodity currencies were hit harder with the loonie and Aussie under pressure. AUD/USD fell to 0.6740, which will be the lowest close of the year but still well above the 0.6675 intraday low. USD/CAD rose 93 pips to 1.3316 in part due to the drop in oil but it couldn't break last week's high of 1.3345.
The President spent most of the day attacking the Fed. He did it four separate times and, to me, that shows a man who is obsessed with keeping the market high. That's a tiny positive in what was a dismal day.
The euro fell 40 pips to 1.1133. Technical selling was a big part of it after the recent range broke in a fall below 1.1160. Cable finished the day just above the recent lows.