Forex news for NY trading on December 20, 2019
- New lows for the week in the GBPUSD
- And yet another record close for all the major indices
- CFTC Commitments of Traders report: GBP shorts trimmed
- AFP news agency: Xi told Trump US interference harming Chinese interests
- Crude oil futures settle at $60.44
- Wilbur Ross: Sees 75K new jobs in the auto sector coming from USMCA
- Baker Hughes oil rigs 685 versus 664 estimate (667 prior)
- Atlanta Fed GDPNow forecast for 4Q growth 2.1% vs 2.3% prior
- The reason the pound has been falling since the election
- European shares end the day with gains
- NY Fed Nowcast estimate for 4Q growth rises to 1.3% from 0.7% last week
- How did Byron Wien do in his 2019 market surprise predictions?
- US November personal spending +0.4% vs +0.4% expected
- U Mich December final consumer sentiment 99.3 vs 99.2 expected
- US core PCE deflator YoY 1.6% vs 1.5% estimate
- The year-to-date FX scorecard is depressing
- Canada October retail sales -1.2% vs +0.5% expected
- Canada November new housing price index -0.1% m/m vs +0.1% expected
- US Q3 2019 GDP (third reading) +2.1% vs +2.1% expected
- The AUD is the strongest and the CHF is the weakest as NA traders enter
In other markets:
- Spot gold is down $0.55 -0.04% to $1478.27
- WTI crude oil futures trading down $0.83 or -1.36% at $60.35. Remained above the $60 level for the week. Today the Baker Hughes rig count showed a pretty healthy rise of 17 rigs for the current week. Perhaps the $60 barrel level is allowing for some little rigs to be restarted profitably.
In the US stock market today, it seems cliché but the major indices all closed at record levels and reached new all time intraday levels as well.
The S&P index led the way with a gain of 0.49%. The S&P index has risen for 4 consecutive weeks. The NASDAQ index rose by 0.42%. The NASDAQ index has risen for a consecutive days.
The Dow industrial average lagged as Boeing stalled that index (Boeing, is the largest contributor to the Dow and was lower by -1.65% on the day today) .
For the week, the NASDAQ led the way with a gain of 2.18%. The S&P index rose by 1.65% and the Dow industrial average rose by 1.14%.
Fundamentally, probably the biggest event of the day was the Canadian retail sales. It showed a greater than expected decline of -1.2% versus 0.5% estimate for the month of October.
The USDCAD shot higher rising above its 100 hour moving average at the 1.3140 level on way to a high price of 1.3180. However, the rest of the day saw the pair chop back and forth, and then move lower into the close. The pair is trading at 1.3150 and just above its 100 hour moving average at 1.3143. Buyers in the USDCAD could not keep control and gave up/squared up into the weekend.
In the US the 3rd cut of 3Q GDP came in as expected 2.1%. No big move off of that data. Later the PCE deflator came in at 1.5% versus 1.4% estimate, while the core deflator came out at 1.6% versus 1.5% estimate. Although higher than expectations for each, the readings are still well below the 2.0% target for the Fed. Fed officials this week said that they wouldn't mind seeing inflation running hot, a sentiment expressed by Chair Powell last week.
In the forex market today the AUD was the strongest of the majors, with the EUR the weakest. The US dollar was mostly higher with only declines versus the AUD.
For the AUDUSD, the pair moved up to test its 200 day moving average at 0.69029 (the high price reached about 3 pips above that level at 0.6906 before rotating back below the key moving average level. In next week's trading that 200 day moving average will be a key barometer for the bulls and the bears. Move above and it's more bullish. Stay/move lower and the rally in the pair this week should see some corrective action to the downside.
The EURUSD in the early London session tried to rally up to test its 200 hour moving average at the 1.1125 area (the high price reached 1.1123). However, when the price could not extend above that moving average level, the sellers entered and pushed the price steadily to the downside. The 1st hurdle in the EURUSD was through the 50% retracement of the move up from the end of November low at the 1.10895. A trendline was broken next at 1.1075, but support buyers did show up near the pairs 100 day moving average at 1.1063. The low price for the day extended down to 1.1066 (close enough). The price is trading at 1.10746 into the close. The 100 day moving average next week will be close barometer for the bulls and bears.
The GBPUSD moved to new session and week lows in the last hour of trading, and to the lowest level since December 3. In the process the price fell below the 200 bar moving average on the 4 hour chart at 1.29923. The low reached 1.29765. The pair did correct toward the 200 bar moving average at the close. Next week that moving average level will be the close barometer for traders.
For the week, the GBP was the runaway weakest currency of the majors (see ranking of the majors in the charts below). The strongest were the AUD and the CHF. The charts below show the percentage changes of the major currencies versus each other for the week.
Next week, the markets will survive on skeleton staffs. The default is to expect choppy trading in the forex, with narrow trading ranges.
Of course, the stock markets may not follow that choppy action. On December 24 starts what is called the Santa Claus rally which runs from Christmas Eve to and through the 1st two trading days of the new year. Do we continue to see all time highs being made? Time will tell.
