Forex news for North American trade on March 14, 2019:
- UK lawmakers vote to extend Article 50. 412 for. 202 noes
- Brexit Amendment I defeated in a victory for May
- EU: Juncker in contact with leaders on Brexit
- US January new home sales 607K vs 622K expected
- BOE's Haskel said would want to see evidence of rising inflation before voting to hike
- DUP continues to show openness to supporting an exit deal
- Canada January new housing price index -0.1% vs 0.0% m/m expected
- US import price index -1.3% vs -1.5% y/y expected
- US initial jobless claims 229K versus 225K estimate
Markets:
- Gold down $13 to $1296
- WTI crude up 27-cents to $58.53
- US 10-year yields up 0.5 bps to0 2.63%
- S&P 500 down 2 points to 2808
- CHF and USD lead, GBP lags
Brexit was at the top of the agenda once again but the volatility was lower that earlier the week (albeit still high in general). The main question was extending Article 50, or asking the EU to extend it. That was a forgone conclusion and it passed easily. The drama was around an amendment asking to wrestle legislative control from May and ask a few indicative questions about Brexit. It would have been a blow to May's prestige and raised further questions if she could keep control but she won in a 314-312 vote. Cable however fell after initially spiking on the main vote. The market is cognizant that the EU might not be so kind about an Article 50 extension and that was the reason for the fall to 1.3225 from 1.3275. The other angle to watch is negotiations with the DUP. If they can support May's deal, it's back in play.
Otherwise market moves were choppy. EUR/USD slid early in Europe but flatlined at 1.1300 throughout North American trade. USD/JPY caught a bid into the London fix and hit a high of 111.83 but faded back to 111.70 later. It gained 50 pips on the day but the rally was in Asia. Kuroda speaks later.
USD/CAD climbed 25 pips on worries about Canadian housing. The pair hit 1.3350 before sagging back to 1.3325 in a broad commodity currency rally late in the day.
