Forex news for North American trading on August 16, 2021.
- A new day, and new records for the Dow and S&P
- Pres. Biden to speak on Afghanistan
- Heads up. Fed's Rosengren to be on CNBC.
- S&P index reaches a new intraday high
- WTI crude oil futures settle at $67.29
- Germany's Merkel: Developments in Afghanistan are bitter for Afghans
- Pentagon: Military has control of air traffic control in Kabul
- Euro Stoxx index falls for the first time in 11 trading sessions
- OPEC+ sees no need till release more oil
- Reuters: Bank of England to raise bank rate to 0.5% in 2023
- Canada Manufacturing sales for June 2.1% vs 2.0% estimate
- US August Empire Fed manufacturing index 18.3 versus 28.9 estimate
- The JPY is the strongest and the CAD is the weakest as the NA session begins
The North American session began with stocks lower, yields down and the dollar higher but mixed with a "risk off" slant.
The weekend brought the awkward evacuation from Afghanistan of US diplomats as Taliban forces overpowered the Afghanistan security forces, and the US started the process to exit the country. as a result,geopolitical risks were elevated leading to a move out of risk, and into the relative safety of the CHF and JPY and to a lesser extent, the USD.
Economically in China the retail sales and industrial production data were much weaker than expectations further pushing down currencies like the AUD, NZD and also the CAD as oil tumbled lower on the back of slower economic growth.
When the NY Fed Empire manufacturing index came out much weaker than expected at 18.3 vs 28.9 (and down from 43 in July), the dollar moved lower giving up some of the earlier gains as yields moved lower on concerns of US economic growth. The 10 year moved from a high of 1.285% to 1.223% at the low (it traded as high as 1.378% last week). True to the news, the New York stocks opened with declines after Friday's record close in the Dow and S&P. The Dow industrial average reached an intraday low of -283 points. The S&P tumbled -30.34 points or -0.68%. The NASDAQ index fared the worst with a decline intraday of -212.90 points or -1.44% at the session lows.
However, as the market started to get its Monday feet under itself, crude oil was given a boost on the back of an OPEC source saying that they would not look to cut production as was hoped by the White House last week.
US rates started to recover off it's lows. Rates are still ending the day down from Friday's closing levels but well off the lows from the day as well.
In the US stocks, the prices start to rotate more into the cyclical Dow and S&P indices and work back higher. By the end of the day, both the Dow and S&P closed at record levels once again (fifth day in a row). The NASDAQ index ended lower by -0.20%, but that was still well off of the lows for the day at -1.44%.
In the forex market, the dollar remained mixed with an upward bias thanks to gains versus the CAD, AUD, NZD and to a lesser extent, the EUR and GBP. The greenback could fall vs the CHF and JPY as the flows still remained more skewed to the relative safety of the JPY and CHF.
In other markets as your traders exit for the day:
- Spot gold rose $8.31 or 0.47% to $1787.43.
- Spot silver rose $0.13 or 0.56% to $23.83
- WTI crude oil futures are trading down $0.51 or -0.75% at $67.42
- Bitcoin felt $1137 or -2.42% to $45,890.81. That was well off the high price the day of $48,075
the US stocks ended the session
