Forex news for North American trade on December 21, 2018:
- Fed's Williams: The economy is strong
- BOC Q4 overall business outlook survey +2.2 vs +2.8 prior
- U Mich final December consumer sentiment 98.3 vs 97.4 expected
- US PCE core for November MoM 0.1% vs 0.2% estimate
- US final US GDP 3Q annualized 3.4% vs 3.5% estimate
- Canada October GDP +0.3% vs +0.2% expected
- US November durable goods orders 0.8% vs 1.6% expected
- Canada October retail sales +0.3% vs +0.5% expected
- CFTC Commitments of Traders: Pound shorts pile in, kiwi shorts bail
- Dallas Fed November trimmed mean +2.4% vs +1.6%
- Fed's Mester: Global outlook has softened somewhat
- Baker Hughes US oil rig count 883 vs 873 prior
- Atlanta Fed GDPNow Q4 tracker lowered to 2.7% from 2.9%
- Italy PM Conte says hopes senate to approve budget bill Saturday
- New York Fed Q4 GDP Nowcast 2.5% vs 2.4% a week ago
- Canada October budget balance -$1.11B vs -$0.39B a year ago
- US December Kansas City Fed composite index +3 vs +13 expected
Markets:
- Gold down $4 to $1256
- WTI crude down 47 cents to $45.51
- US 10-year yields down 2 bps to 2.79%
- S&P 500 down 51 points to 2416
- JPY leads, NZD lags
The Fed's Williams tried to ride to the rescue of the market by walking back some of Powell's comments and his own comments about the path of rates. He said that a balance sheet wind down could be adjusted and that rate hikes would slow if the economy did. It was a much more humble appearance than at the start of the month.
His comments led to a bid in the stock market and the S&P 500 was up more than 30 points at the highs. Once again, the wheels came off late in the day as the index down another 2% in the worst week for the S&P 500 since 2008. At these levels, the December decline of 14% would be the second worst on record, trailing only 1931.
The commodity currencies were especially hard hit as AUD and NZD both fell about 1% and finished on the lows. AUD/USD is just above the November low of 0.7020.
USD/CAD gained for the seventh consecutive day and hit 1.3602, which is a fresh high since May 2017.
EUR/USD erased the Wed-Thurs rally in a 75-pip fall to 1.1366. Here's an unbelievable stat: The volatility in the euro has been the lowest in the past two months since inception.
Cable bounced around on the London fix in a couple quick moves. In the end it resolved lower as the US dollar stormed ahead. On the day it finished at 1.2645.
