Forex news for New York trade on January 14, 2021:
- Biden expected to outline $1.9 trillion plan - report
- Powell: Now is not the time to be talking about Fed exit
- More Powell: Time to raise interest rates is 'no time soon'. Dollar falls
- Powell: To achieve inflation of 2%, need to see inflation average 2%
- US initial jobless claims 965K vs 789K estimate
- New Zealand December median house prices +18.5% y/y
- Fed's Rosengren repeats that he's pretty confident in H2 recovery
- US December import price index +0.9% m/m vs +0.7% expected
Markets:
- Gold up $2 to $1847
- US 10-year yields up 4 bps to 1.12%
- S&P 500 down 14 points to 3795
- WTI crude up 72-cents to $53.63
- NZD leads, USD lags
You start to get the feeling we're going to be doing a lot of watching the bond market this year and figure out how that filters through the FX market.
The first news that jolted the market today was initial jobless claims and it was a reminder that the jobs market still has plenty of recovering to do. It led to a steady drop in Treasury yields and the dollar.
That peaked as Powell began to speak and offered no indication of a taper. However later in his speech he highlighted some optimism about the economy and then bonds started to wild, pushing yields higher. Or maybe there were sellers waiting in the weeds ahead of Biden's big stimulus speech.
We got a leak on that topic late with a $1.9T price tag. I'd characterize the reaction to that as mixed-to-disappointing. Rates remained near the highs but stopped moving up. The dollar generally chopped sideways but remained soft.
Cable was perky again after yesterday's break and EUR/GBP was particularly soft, testing the November lows after six days of selling. Watch that level in the day ahead.
Commodity currencies were strong after initially falling at the start of New York trade. The trio of AUD, CAD and NZD all finished a half-cent higher.
Tune in at 0015 GMT to hear what Biden has to say.
