Forex news for NY trading on February 20, 2020.
- Stocks close lower but could have been a lot worse
- US crude oil futures settle at $53.78
- Pres. Trump/PM Johnson reiterates commitment to US-UK relationship
- US treasury: Does not expect China to alter its purchase commitments under Phase 1
- Feds Barkin: US economy moving along at a very good pace
- Monmouth poll ahead of California primary tap Sanders
- Roger Stone sentenced to 40 months for lying to Congress, witness tampering
- While the US stocks were tumbling lower, European shares closed for the day (and at session lows)
- Yikes. Watch out below. Nasdaq down -1.7%
- Crude oil inventory shows a build of 0.415M versus 3.2M estimate
- China's Global Times sees Apple sales down 40-50%
- US treasury imposes sanctions on 5 Iranians websites
- US leading index for January 0.8% versus 0.4% estimate
- Eurozone consumer confidence -6.6 versus -8.2 estimate
- Feds Clara on CNBC: Financial stability risks in US are moderate
- Canada Teranet new house price index for January 0.1% versus 0.2% last month
- Philadelphia Fed business index for February 36.7 versus 11.0 estimate
- US initial jobless claims 210K vs 210 K estimate
- The CHF is the strongest and the NZD and AUD are the weakest.
The flow of funds today continued to favor the US. Looking at the changes in the forex market and ranking the major currencies, the USD is the strongest, followed by the CHF. The weakest was the AUD (the employment data was not up to snuff) which fell to the lowest level in nearly 11 years. Also weaker was the NZD which sufffers from fears.
Gold continued to move higher today, although off the highest levels on the day. Spot gold is trading up $7.54 or 0.47% at $1619.18. The high reached $1623.73. The low extended to $1604.01. Staying above $1600 level keeps the buyers in control. The price reached the highest level since 2013.
Also in demand is US treasuries. The 10 year yield moved down to a low of 1.505% which was just above key support at the 1.501% area. A move below that level will have traders looking toward teh 2019 low at 1.4272%. That low (in 2019) was the lowest since July 2016. The table below shows, the current, high and low yields for the US debt instruments on the yield curve. The 2-10 yield spread also narrowed to 12.81 basis points from 14.42 basis points
US stocks did close down on the day but it could have been worse. Midday, the major indices fell sharply led by the Nasdaq index which was down by 1.84% at the lows. The S&P fell by as much as 1.33% and the Dow by 1.32%. However, by the close the indices had recovered much of their declines.
Fundamentally, the data today was pretty good.
- Jobless claims came in as expected at 210K but the 4 week moving average declined to 209K from 216K last week. The initial claims this week is in the same week of the BLS's survey for the employment data early next month. If the correlation holds up, the report should continue to support a strong labor market
- Philadelphia manufacturing index search the 36.7 from 11.0 last month. The index rose to the highest level since February 2017
- The leading index for January also came in much better-than-expected 0.8% versus 0.4% estimate
Some technical levels to eye in as the week comes to a close:
- The AUDUSD fell below the low from 2020 at 0.66617 taking the pair to the lowest level since March 2009. It will take a move back above that level to hurt the bearish bias (and that would be the minimum.
- The EURUSD tried to extend above its 100 hour MA at 1.08135 (and moving lower), but failed. The pair is trading near lows for the day at 1.0777. That is also the lowest level since April 2017. The low today did fill the gap from 2017 (almost to the fraction of a pip). So there may be some dip buyers, but on a break,be careful. The EURUSD has been down 11 of 14 days now.
