Forex news for North American trading on November 17, 2021
- Major indices close lower for the second time in three trading days
- More from Fed's Evans - says gas prices are high but so is the stockmarket
- Fed's Evans says he is looking for inflationary pressure to fall
- More on Biden raising the issue of oil reserve release with Japan and China
- US jobless claims, Philly Fed manufacturing index highlight events tomorrow
- US crude oil futures settle at the lowest level since October 7
- Biden changes the plan for his nomination of Fed chair to before Thanksgiving
- Fed's Waller does not comment on Fed policy or the economy
- U.S. Treasury auctions off 20-year bonds at a high yield of 2.065%
- Tom Lee on CNBC (forever bull) hedges a bit on technicals (and some other fundamental concerns)
- Atlanta Fed GDPNow estimate for 4Q growth falls to 8.2% from 8.7% last
- European indices close with mixed results
- US reduces strategic petroleum reserve deposits by 3.2M barrels
- DOE crude oil inventories -2.101M versus 1.398M estimate
- More from BOEs Mann: Short term consumer inflation expectations are lagging actual CPI
- Schnabel: By continuing to buy bonds, ECB could signal that a rate hike is not imminent
- BOEs Mann: Domestic GDP is likely to moderate
- More from ECB Schnabel: Rise in inflation expectations is a welcome development
- New York Fed Pres Williams says nothing on monetary policy or the economy
- ECB Schnabel: Fears of return of stagflation appears unfounded
- Canada October CPI 4.7% YoY versus 4.7% estimate
- US October housing starts 1.520M versus 1.576M estimate
- The GBP is the strongest and the AUD is the weakest as NA traders enter for the day
- US MBA mortgage applications w.e. 12 November -2.8% vs +5.5% prior
Soon after the weekly oil inventory data, there as a headline that the US strategic petroleum reserves (SPR) had been reduced by 3.2 million barrels. Moreover the level of reserves was at the lowest level since June 2003. Although the level is relatively small, the headline spooked the crude oil market and prices started to move back to the downside.
Later after the stock market closed, "sources" said that the US asked other countries to coordinate release of strategic oil reserves, and that they had raised the release requests with Japan and China. A White House spokesperson said that no decision had been made on oil reserve release, but it certainly has the market anxious.
The low price for the day reached the $77.67. The high was up at $80.66. Technically, the price moved to the lowest level since October 7. The high for the price reached a multiyear high at $85.39 back on October 25.
The lower oil prices help to move yields to the downside. This was despite a lukewarm demand response to the 20 year bond auction (1.5 basis point tail). The 10 year yield felt -4.3 basis points leading the way.
In the forex, lower rates and lower oil prices helped to tilt the bias to the downside for the dollar (for the first time in five trading sessions) although it did rise against the CAD (helped by the lower oil prices) and the AUD. The dollars large declines declines were against the JPY and the GBP.
The USDJPY saw the price fail on it's break of the highs from 2021 and November 2017 at 114.691 and 114.728 respectively. The high price today reached 114.964, but after moving back below the aforementioned old highs, sellers started to push to the downside. The price cracked below its 100 hour moving average at 114.235. That level will be a close resistance level in the new trading day. On the downside, the 200 hour moving average at 113.82 remains as a downside target in the new trading day.
For the GBP today, it moved higher after higher inflation data kept the door open for a December tightening by the Bank of England. The price in the European session moved up to test its 200 hour moving average and backed off toward the 100 hour MA where support buyers stalled the fall. After basing and moving higher, the the price was able to breach the 200 hour moving average again (currently at 1.34607) and move up to a high just short of the the 1.3500 level (at 1.34956). IN the new day stay above the 200 hour moving average is more bullish. Move above the 1.3500 level should lead to further upside momentum.
