Forexlive Americas FX news wrap: US yields recover a bit into the weekend
Forex news for NY trading on August 16, 2019
- Stocks close the session with solid gains. Erase more of the declines from this week
- CFTC commitment of traders: GBP shorts trimmed modestly. JPY longs increased.
- Key events and releases for next week's trading
- Fed's Mester: She can see scenarios where rates are steady or moved lower
- WTI crude oil futures settle at $54.87
- UK finance minister Javid: Want to see lower taxes, that would pay for public services
- NY Fed GDP Nowcast rises to 1.82% from 1.58% last week
- Fed's Kashkari: Recession not base case but risks risen quite a bit
- Baker Hughes oil rig counts 762 versus 762 estimate
- Pres. Trump held call with top bankers as market tumbled
- European shares have a recovery day
- German government is getting prepared for deficit spending in case of recession
- German finance minister: EU27 stand united and is ready for all Brexit scenarios
- Atlanta GDPNow tracker for 3Q growth remains unchanged at 2.2%
- U Mich August preliminary consumer sentiment 92.1 vs 97.0 expected
- This is the most-important chart this week
- US July housing starts 1194K vs 1256K expected
- GBP is the strongest while the CHF is the weakest.
Yes this week, had a day when the Dow and Nasdaq each fell over 3%. However, this week was really about yields.
- The 10 year yield moved from 1.745 last Friday to a low of 1.4732 before rebounding yesterday afternoon and today and are currently trading at 1.555%. Nevertheless, that is a 10.9% decline for the week or nearly 20 basis points. PS at the lows, the yield reached 1.4732% or -15.56% for the week.
- The 2-10 year spread went negative for the first time since 2007 (see chart below)
- We will retaliate if tariffs go into effect in September
- Let's meet half way
- Hong Kong is none of your business.
- A deal will be on US terms
- Xi should go talk to the protesters
- The US will win
That may just be covering in the GBP. Afterall the CBOT speculative positions still has the GBP shorts as the largest position. So a short squeeze is not out a surprise. However, the Brexit clock is still ticking and Germany today was encouraging the EU27 to stick to their guns on the current deal. PM Johnson will be going to Europe next week to meet France's Macron and Germany's Merkel who may just say "sod off mate" (or the equivalent) when he comes looking for a compromise. That may weaken the GBP again.