Forex news for North American trade on August 3, 2019:
- US July non-farm payrolls +164K vs +165K expected
- PBOC says it will lower RRR at an appropriate time
- U Mich July final consumer sentiment 98.4 vs 98.5 expected
- US June factory orders +0.6% vs +0.7% expected
- ISM New York business conditions fall to three-year low
- Dallas Fed trimmed mean June PCE price index +2.4% vs 1.8% prior
- Fed's George says data and outlook didn't warrant rate cut
- Fed's Rosengren says he doesn't see a clear and compelling case to ease
- Canada June international merchandise trade balance +$0.14 bn vs -$0.30 bn expected
- US June trade balance -$55.2 billion vs -$54.6 billion expected
- CFTC Commitments of Traders: Pound shorts most extreme since 2017
- China UN envoy says if US wants to fight on trade "we will fight"
- Baker Hughes US oil rig count 770 vs 776 prior
- China said to turn to Brazil for soybeans amid Trump tariffs - report
- Global Times editor: Beijing was disappointed with US flip-flop. There could be countermeasures
Markets:
- Gold down $4 to $1441
- WTI crude oil up $1.29 to $55.23
- US 10-year yields down 5 bps to 1.84%
- S&P 500 down 21 points to 2932
- CHF leads, NZD lags
Non-farm payrolls wasn't really the story on the day. The jobs report was very close to expectations with the details in the report roughly balanced as well. The dollar climbed briefly on the headlines but gave it in short order. USD/JPY rose to 107.25 from 106.75 but the moves elsewhere were smaller and it all retraced, part of the rise was on a report that really should have been ignored.
Shortly before the US equity open a CNBC report circulated about Trump taking off China tariffs if China offers more in talks. That wasn't really news but it was jumped on by algos and skittish traders helping stocks to briefly erase pre-market losses. It faded not long after and deep risk aversion set it.
At the extremes AUD/USD fell as low as 0.6763 and USD/CAD hit a high of 1.3266 but the FX market topped early even as stocks and bonds bounced around. USD/CAD made the larger turnaround as it sank to 1.3207 at the close with the help of a solid rebound in oil after yesterday's rout.
Cable also showed some life at the end of a miserable week. Sentiment is ultra-negative on the pound and it might have been nothing more than position squaring but it finished strongly and near the highs of the day.
EUR/USD is struggling to figure out what it's all about at the moment. It tends to do a bit better on poor US trade headlines but with the economy nearing stall speed a trade war isn't going to help.
Overall, it was a lively week and should set the tone for what's coming in August and beyond. Note that Canadian markets are closed on Monday for a holiday. Have a great weekend.
