Forex news for North American trading on October 18, 2021
- Its started again already - US Treas Sec Yellen says will use extraordinary measures to avoid hitting the debt limit
- Major releases and events tomorrow in the North American session
- Sen. Manchin does not see how a deal on the Biden agenda will be done by Oct. 31
- The earnings calendar for the week kicks in tomorrow
- Coming soon: State-by-state JOLTS data
- SEC will release a 'meme stock frenzy' report today
- White House says continuing to press OPEC to address oil supply issue
- White House: Biden is feeling urgency to get things done on 'build back better'
- Icahn on CNBC: At some point the markets will hit a wall
- MUFG trade of the week: Stay short GBP/USD
- European equity close: Soft start to the week
- Have a look at Powell's stock trading from 2020
- Oil gives back gains to trade flat after hitting fresh 7-year high
- Bank of Canada Q3 business outlook survey: Future sales 54 vs 47 prior
- NAHB Oct US home builder sentiment 80 vs 76 expected
- US September industrial production -1.3% vs +0.2% expected
- US 5-year yields hit a new cycle high as rate hike probabilities rise
- The USD is the strongest and the AUD is the weakest as NA traders enter
- Canada September housing starts 251.2 vs 256.5K expected
- Former US Secretary of State Colin Powell dies of covid-19
The USD was mixed. The US stocks were mixed. The US rates were mixed. You might be able to add the economic data as being mixed too, with industrial production weaker than expected (and Capacity utilization), but the NAHB home builders index better than expected.
Overall the day can be characterize as being a mixed up Monday.
In the forex, the NZD is ending as the strongest of the majors. It was boosted by higher than expected inflation for the quarter at 2.2% vs 1.5% expected and 1.3% last quarter. The RBNZ has already tightened by 0.25 basis points at their last meeting and are expecting to continue that trend going forward.
The GBP was the weakest along with the JPY. The pound is weaker despite BOE's Bailey laying the groundwork for a tightening potentially before the year end as a result of higher inflation. Although he still expects inflation to remain be transitory, he is concerned that higher oil will keep inflation higher for longer and that could impact inflationary expectations. Nevertheless, the GBP was lower on the day. Tomorrow Bailey is expected to speak at a climate change conference at the start of the North American session, but traders will be paying attention to the question-and-answer session.
What about the USD? It saw modest gains verse the GBP, JPY, CHF, CAD and AUD, and losses vs the NZD and EUR to start the trading week. The price action in the day reflected the uncertainty to start the week as flow of funds initially moved into the dollar and then out of the dollar vs a number of the currencies.
In the US stock market, the major indices also had a mixed reaction in trading today. The Dow industrial average fell as much as -0.73% at the lows and could only reach +0.09% at the highs. It closed down -0.1%. Meanwhile the NASDAQ index fell as much as -0.43% at it's lows but declined as much is at 0.87% at its highs. It ended the day near that high at +0.84%. The S&P index saw a similar price reaction with the index closing near it's highs for the day (+0.34%).
In the European markets, the major indices all closed lower with the France's CAC down -0.81% and the German Dax down -0.72%.
In the US debt market, yields in the short and were up well the 30 year yield fell. The five year yield has been an inflection point on the curve. It rose by 4.1 basis points to 1.1634%. The 10 yield was up 1.5 basis points or 1.591% while the 30 year fell -2.3 basis points to 2.027%.
