ForexLive Americas FX news wrap: US yield curve inverts, sparking fears
Forex news for North American trading on March 22, 2017:
- US February existing home sales 5.51m vs 5.10m expected
- US wholesale inventories for January 1.2% versus 0.1% estimate
- US March prelim Markit PMI 52.5 vs 53.5 expected
- Canada February CPI +1.5% y/y vs +1.4% y/y expected
- Canada January retail sales -0.3% m/m vs 0.4% expected
- May says she might not have MV3 if there's a lack of support - letter
- US posts largest monthly fiscal deficit on record
- Baker Hughes oil rig count 824 versus 830 estimate
- Trump cheerleader and Fed critic Stephen Moore tapped for Fed Board job
- DUP deputy says nothing has changed as far as withdrawal agreement is concerned
- China stops purchases of all Canadian canola products
- S&P 500 down 54 points to 2800
- WTI crude down $1.14 to $58.84
- US 10-year yields down 10 bps to 2.44%
- Gold up $4 to $1313
- JPY leads, EUR lags
Risk aversion hit hard on Friday as the US yield curve inverted. How far it inverted was a matter of confusion with many claiming it had inverted on 3-month bills to 10-years early in the day when it hadn't yet. Still bond market was ripping right from the get-go and that spooked everything else.
Stocks opened only modestly lower but quickly soured and that sent USD/JPY down 90 pips on the day. Stops were hit below 110.00 in the fall to the lows of the day.
Cable was upbeat as it climbed more than 100 pips on Brexit optimism or at least the hope that a no-deal Brexit isn't coming. It showed once again that it's a very low bar for cable to rally.
Speaking of curve inversions, the Canadian curve is now deeply inverted and with Canadian retail sales falling for the third straight month, the loonie was beaten up. USD/CAD finished near the highs at 1.3429.
EUR/USD dropped 72 pips but the entirety of the drop was after the dismal German manufacturing PMI. It was mostly sideways in North American trade.
Finally, there were rumors all day of Mueller's report being completed and released. It's come after the close but that appears to be the case.
Have a great weekend.