Forex news for NY trading on January 15, 2019
- S&P 500 closes above the key 2600 level
- GBPUSD tests 100 day MA at 1.2892
- What happens if May loses the confidence vote?
- May spokesman: We don't necessarily agree Article 50 will have to be extended
- EU may float extending Article 50 until the end of June
- Corbyn proposes no-confidence motion in May's government
- May's Brexit deal defeated in UK parliament with 432-202 votes against
- More Kaplan: He'd be open to balance sheet adjustments if appropriate
- Amendment to rewrite Irish backstop overwhelmingly rejected
- Fed discount minutes show 6 of 12 regional banks voted for no hike
- Fed's Kaplan says as fiscal stimulus wanes, GDP could fall back to 1.75% trend
- Corbyn confirms Labour will vote against May's Brexit deal
- May will bring back 'more palatable' Brexit deal next week - report
- Fed's George: It might be a good time to pause on hikes
- EU plans to say its position won't change after May loses vote - report
- EIA bumps 2019 and 2020 world oil demand forecasts
- Fed's Kashkari: No need to tap the brakes on economy as long as inflation low
- European major indices close with gains ahead of the Brexit vote
- ECB's Draghi: Recent developments have been weaker than expected
- Lighthizer saw little progress with China on structural issues and IP protection
- New Zealand GDT price index +4.2%
- Canada December existing home sales -2.5% vs -1.0% expected
- Dec Philly Fed non-manufacturing index revised to +7.7 vs +3.9 initially
- US December PPI +2.5% vs +2.5% y/y expected
- Empire manufacturing index for January 3.9 vs. 10.0 estimate
In other markets, the snapshot is showing:
- Spot gold, $-2.46 or -0.19% at $1289.23. The price is well off the high for the day at $1295.08
- WTI crude oil futures rose $1.56 or 3.09% at $52.07. The low reached $50.64. The high extended to $52.30
- Bitcoin on Coinbase is trading down $-100 and $3565.
In the US stock market today, the Netflix bumped up subscription costs for consumers from $11-$13 and it helped to support the overall market. Netflix is closing 6.52%. Other big gainers include Citigroup, +4.17%, Amazon, +3.55%, Adobe, +3.33%, , alphabet, +3.11% Tesla, 3.0% and Microsoft, +2.90%. All the big names road the wave caused by Netflix.
The gains helped to push the NASDAQ composite index +1.71%. The S&P index also gained a healthy 1.07%. After the horrible December, the US major indices have healthy gains to start the year (Nasdaq up 5.86%, S&P up 4.13% and Dow up 3.16%).
European shares also close mostly higher (although at more subdued pace). The only major indices to close in the red today was the Italian FTSE MIB (-0.03%).
In the US debt market, yields on the longer end moved higher. The shorter end changes were more subdued (2 year are ending down -0.4 bps).
The yields in Europe fell with the exception of Italian notes which rose 3.1 bps.
The weakest currency of the day is CHF. The strongest currency of the day was the GBP.
That rise in the GBP came despite a resounding defeat of PM Teresa May's Brexit proposal by a vote of 432-202. That defeat was even larger than the pundits expected, and led to the calling of a vote of no-confidence by Labour's Corbyn (the vote will take place at 1900 GMT tomorrow after debate).
So the GBP got hammered, right?
Well before the vote and immediately after it, the GBPUSD had moved sharply lower. The range was 250 pips. The low was down about -182 from the close from yesterday. That's semi hammered.
However, perhaps because of short covering, or perhaps in response to the thought that May would survive the no-confidence vote (remember her party had a vote of no-confidence a few weeks ago that she passed), and that she would tweek the deal/get concessions from the EU to avoid a hard Brexit and then pass Deal #2 in parliament, the GBPUSD started a "hard" recovery. That is a lot of hope.
The run higher did stall just 4 pips short of the 100 day MA which may put a nice ceiling in place after the up and down and up again day today. In the new day the 100 day MA willl be a key barometer for the bulls and bears. Stay below and a rotation back lower cannot be ruled out. A move above and depending on the shorts out there, there might be more of a squeeze.
PS. the EURGBP also stalled at a key "day MA". For it, the 200 day MA stalled the fall at 0.8857 and bounced modestly into the close.
So both the EURGBP and GBPUSD saw key MAs tested and both stalled moves. Maybe the high for the GBP is in place, at least before tomorrows Brexit Fireworks, Part II.
In other pairs,
- The EURUSD tested the 61.8% of the move up from the December low at 1.13834 and bounced. The rebound did stall just under the 50% retracement at 1.1419 though. The two levels will be eyed for a break in the new day.
- The USDJPY in the NY session tested the 200 hour MA twice and held (at 108.37 currently. The highs for the day came in at 108.747 and then 108.76. The end of day rally stalled at 108.73. Three highs intraday with 3 pips of each other. We are trading at 108.658 into the close. Stay below the ceiling is bearish. Move above and sellers against the ceiling, will likely cover and push the price higher.
- The AUDUSD bottomed two pips above its 100 day MA and moved higher into the close. The run higher took the price back above its 100 hour MA at 0.71954 (trading at 0.7202). Stay above the MA is more bullish. Move below in the new day and there could be a rotation lower.
Other fundamental news was overshadowed by the Brexit vote, but
- Shut down continues in the US
- US trade representative Lighthizer said that little progress was made with China on key issues in the last week.
- US PPI came in as expected at 2.5% YoY
- Empire manufacturing barely stayed above the 0 line (3.9 actual vs 10.0 estimate). The index has fallen from 21.4 in November (two months).
- Fed members Kashkari, Kaplan and George all expressed the desire to stall the hikes.
- ECB Draghi testified that recent developments were weaker than expectations
I am not sure the day went as scripted but it was quite a ride - espeically for the pound.
