Forex news for NY trading on October 2, 2019.
- The ISM non-manufacturing index on Thursday will be a market mover
- Trump: I will probably be bringing a lot of litigation against a lot of people
- US WTI crude oil futures settles at $52.64
- Bitcoin remains below its 200 day MA
- Verhofstadt: Reaction of most MEPs to UK proposal "not positive"
- Varadkar told Johnson that proposals do not fully meet agreed objectives of the backstop
- US requests emergency mid October meeting of WTO dispute body
- EUs Barnier: We shall continue to work for a deal
- Juncker doesn't immediately shoot down UK Brexit proposal
- Fed's Williams: Monetary policy is in 'the right place'
- European shares are beaten down. German DAX falls -2.5%. France's CAC -2.9%
- Trump blames the stock market decline on 'impeachment nonsense'
- Fed's Williams: US economy is very strong if you just look in the rearview mirror
- Varadkar gives thumbs down to UK Brexit offer
- Bernie Sanders cancels campaign events until further notice due to heart procedure
- Weekly US crude oil inventories +3104K vs +2000K expected
- UK Brexit proposal includes an all-Ireland zone for all goods - report
- WTO says US can retaliate against $7.5B in EU goods a year
- ISM Sept New York business conditions 42.8 vs 50.3 prior
- French stocks hit an 11-year high yesterday. Then it all fell apart.
- Ford Q3 US light vehicle sales -5.1% vs -6.0% expected
- DUP's Foster: If EU rejects 'sensible and balanced' deal, we will be entering realm of no-deal
- Gold pops on ADP data but quickly gives back the gains
- US September ADP employment change 135K vs 140K expected
- The JPY is the strongest and the CHF is the weakest as NA traders enter for the day
In other market a snapshot near the close is showing:
- Spot gold, up $19.87 or 1.35% at $1499
- WTI crude oil futures are down $1.06 or -1.96% at $52.56
- Bitcoin on Coinbase remains below its 200 day moving average at $8447.17. It is trading at $8255 that is down $-121 on the day.
Another down day for the major stock indices today as markets continue to worry about:
- Trade concerns. You can increase US/EU trade issues as the US can now impose tariffs on $7.5B of EU good as a result of a WTO penalty from subsidies to Airbus. US/China meetings ahead
- Slower US/global growth/Hangover from US ISM data yesterday
- Brexit fears and implications
- Trump flaming out as impeachment proceedings begin (a first....typed BULLS84T in a tweat. Look for more to come...
- Trump vs Warren in 2020
The major indices fell about -1.3% yesterday. Today they fell an additional 1.56% to 1.86% for the major indices. That is not a good start to the US stocks this month. The good news is it could have been worse.
- The S&P was down -65.32 points but closed down -52.64
- The Nasdaq was down -163.73 points but closed down -123.44 points
- The Dow was down 598.92 points, but closed down -494.42 points
PS European shares fared even worse today as all the major indices were down over 2.75%. Below is a summary of the % changes for the major North American and European indices.
As is typical in such a fragile equity market, the bond market and gold became safe haven homes. US yields were lower with most of the flows going into the shorter end. The 2 year was down -7.0 bps, while the 30 year was down, but only by -1.3 bps. The 2-10 yield spread widented to 11.63 bps from 8.94 bps yesterday.
Of course gold and silver also prospered on the safe haven flows. As mentioned above, gold rose by about $20 and silver was up around $0.33 to $17.57. That is a 1.95% gain on the day.
In the forex market, the JPY caught the safe haven bid and was the strongest of the majors (see ranking below). The CAD fell and was the weakest of the majors.
Oil prices fell, helping to weaken the CAD. In addition, the USDCAD just trended and trended and trended higher and in the process took out technical levels in the process.
In fact, the low to high trading range for the USDCAD of 118 pips today - from a low of 1.3205 to a high of 1.3323 - was larger than the entire trading range over the last 12 days - the low was 1.32087 to 1.33094. That is an outside day.
Some technical thoughts for some of the major currencies going into the new trading day:
- EURUSD moved above its 200 hour moving average for the 1st time cents September 20. That moving average comes in at 1.09537 (it is also at the 38.2% of the move down from September 18 high). The price is trading at 1.0959 near the close. Stay above the moving average is more bullish. Move below and the bullish run higher with the tilt back to the downside
- USDJPY: The USDJPY trended lower for most of the trading day with a low price coming in at 107.02. The low price from last week was at 106.955 and would be the next downside target for the pair. On the topside, the swing low from September 23 comes in at 107.30. The swing low from last Thursday came at 107.418. Stay below each is more bearish.
- GBPUSD: The GBPUSD moved above its 100 hour moving average and 200 bar moving average on the 4 hour chart at 1.2294 (both are converged at that level). The price today is closing right around that level. It will be a barometer for the new day. Stay above = more bullish. Move below = more bearish.
