Forex news for NY trading on February 15, 2019
- Reminder: It's a holiday in the US and Canada on Monday
- Fed's Daly: If economy evolves as I expect, there isn't a case for a hike this year
- Crude oil futures settle the week at $55.59
- Key economic releases for Feb 18-22 week
- Baker Hughes oil rigs 857 vs 854 last week
- Fed's Bostic: Policy a little short of neutral but in no rush to move policy
- European shares end the day (and week) with solid gains
- Pres. Trump: There is a possibility to push back the trade deadline
- NY Fed Nowcast estimate falls to 2.2% from 2.4% last week.
- Pres. Trump: I happen to love tariffs. We are taking in billions from tariffs
- Goldman Sachs lowers GDP tracker to 1.9% from 2%
- White House Mulvaney: Pres.Trump declares national emergency on border. Says Trump will have $8B for border wall
- Trump: China talks are going extremely well
- US February preliminary U Mich consumer sentiment 95.5 vs 93.5 expected
- US January industrial production -0.6% vs +0.1% expected
- Canada January existing home sales +3.6% vs -0.6% m/m expected
- US January import price index -0.5% vs -0.2% expected
- Empire Manufacturing index for February 8.8 vs 7.0 estimate
- The NZD is the strongest (again) and the EUR is the weakest
In other markets:
- Spot gold is up $8.88 or 0.68% at $1321.46
- WTI crude oil futures are up $1.34 or 2.46% at $55.75
In the US debt market today, yields rebounded in the shorter end of the yield curve. Out the curve the gains were less.
Despite the rise the modest rise in rates, the USD fell today. It is ending the session as the weakest of the major currencies (see ranked charts below). The biggest declines were vs. the GBP and the commodity/risky currencies like the AUD, NZD and CAD. For the GBP retail sales in the UK today were pretty good and although the impact was not really felt in the European session (the price moved up and down), the NY session saw London fixing buy flows that shot the pair above a the 50% midpoint of the year at 1.2834 and then the 100 hour MA and swing area at 1.2853. The GBP survived another week of policital/Brexit unrest, the clock is ticking toward March 29th, but there still is hope that no-deal is averted.
Commodities were higher today (gold, silver, oil, copper) which helped to boost commodity currencies. Those pairs also got boosts from hopes for a trade agreement with China and the US. It was announced, that negotiations would continue in Washington next week. Although Pres. Trump said he "loves tariffs" as it is bringing in billions of dollars of revenue, he also said that "there is a possibility to push back the trade deadline". He may love tariffs, but a trade deal would be better for alll. Putting it another way, 25% tariffs on $200B of imports would not be good (despite the billions of dollars of taxes). The President also signed the new debt bill, which avoids another shut down. Better news took some of the 'risk fear" out of the currency rates.
For the week, in the forex, the NZD was the strongest by far. That pair, in addition to the hope on China, benefitted from a "less dovish" RBNZ and some short covering off the 100 and 200 day MAs. The weaket currency was the JPY with most of the declines vs the NZD, CAD and AUD. The USD was mixed on the week with modest gains vs the JPY, CHF, GBP and EUR and declines vs the NZD, AUD and CAD. Below is a chart of the week's changes.
The economic data today was mixed:
- Empire manufacturing was better than expected
- Export/import prices were lower than expected
- Industial production and Cap. Utilization were both weaker than expectation
- Univ. of Michigan sentiment for Feb was better than expected.
That led to more chop then trend until the dollar selling kicked in later in the day.
Stocks ending the day and week at the highs. The Dow industirals led the charge with a gain of 1.75% in the US. European shared did even better with the German Dax up 1.89%
