Forex news for the NY session on October 22, 2019
- himFrench govt minister says cannot wait infinitely for UK to make a Brexit decision
- US stocks end the session lower and near session lows
- EU commission: Expect UK government to inform it of the next steps.
- Spokesperson: UK PM Johnson's next step is to have conversation with EU leaders
- DUP Dodd. Let's sit down and talk
- The DUP vote has cost the government. PM Johnson says we will leave on 31st
- The UK government loses the programme motion timetable vote: BBC
- UK lawmakers pass 2nd reading vote of Brexit deal legislation
- US treasury auctions off $40 billion of two-year notes at a high yield of 1.594%
- ITV: PM will be calling EU leaders and making clear we will leave on 31 October
- European equity close: Modest changes in the main markets
- OPEC to consider deeper oil cuts at Dec meeting - report
- Bank of Canada business outlook survey: Future sales +23.0 vs +23.0 prior
- Richmond Fed manufacturing index for October +8 versus -7 estimate
- US September existing home sales 5.38m vs 5.45m expected
- Canada fin min Morneau: We will take fiscally responsible approach
- Germany to nominate Isabel Schnabel to ECB executive board
- Boris Johnson confirms that he will push for election if bill fails today
- If UK lawmakers vote down government Brexit timetable, Boris will push for election
- Philly Fed nonmanufacturing business activity index 12.6 in October versus 9.5 in September
- Canada August retail sales -0.1% vs +0.4% expected
- The NZD is the strongest while the CHF is the weakest as NA traders enter for the day
- China issued 10m tonnes quota for US soybeans purchases - report
- Brexit: Government sources say Johnson may pull entire WAB if programme motion falls
The UK legislators had two key votes today.
The 1st was approving the Brexit deal negotiated by Boris Johnson with the EU. That past by vote of 329 to 299.
The next vote was the timetable to pass the necessary legislation which was voted down by vote of 308 to 322.
So PM Johnson got to congratulate himself on passing the Brexit deal that is alluded all previous votes by lawmakers. However, his promise to Brexit on October 31 seems in doubt.
Earlier in the day, he threatened to pull the legislation if it was voted down. He also said that he would petition the EU to not grant an extension as required by the Benn Amendment (of course, he was supposed to sign a letter to the EU requesting an extension but chose not to sign that letter over the weekend). Finally he also threatened to call an early election.
How will this end is up in the air.
The PM stuck with his October 31 Brexit date. The Labour leader, offered the chance to work with his party to find some kind of compromise (though that looks unlikely). The EU said they are waiting on the UK to inform them of the next steps.
The Brexit saga goes on and on and on.
The GBPUSD initially rose to new session highs after the 1st vote passed, but could not extend above the 1.3000 level (the high reached 1.2999). However, the price fell to new session lows after the 2nd vote. The low for the day reached 1.2861. Technically, the price dipped below its 100 hour moving average at the 1.29017 level. That will be a barometer for the bulls and bears in the new trading day. Stay below is more bearish move above in the waters for the bulls and bears get a little more murky as neither buyers nor sellers can take control over the last few days of trading.
For other pairs today, the EURUSD followed the lead of the GBPUSD in a more narrow trading range. It rose after the first vote and fell after the 2nd vote.. Like the GBPUSD it too fell below its 100 hour moving average (and 100 day MA too) on the move lower. Those moving averages come in at around the 1.1132 area. The day is closing just below those levels at 1.1127 currently. Like the GBPUSD, the 100 hour moving average (and 100 day moving average too) will be the barometer for the bulls and bears in the new trading session.
The USDJPY traded lower on the day, but added shares of ups and downs. The final move was to the downside after its 100 hour moving average above could not be breached in New York trading. That 100 day moving average comes in at 108.589. Stay below in the new day will be more bearish. On the downside, the price also dipped below its 200 hour moving average at 108.48. The pair is ending the session trading above and below that 200 hour moving average over the last 3 hourly bars.
In other markets today:
- Spot gold rose $3.27 or 0.22% to $1487.86
- WTI crude oil futures rose $0.85 or 1.59% and sell the $54.16
In the US stock market, the major indices ended the session in the red with the NASDAQ composite index faring the worst at -0.72%. The S&P index closed below 3000.00 level at 2995.99 after spending most the day above that level (the hi reached 3014.57).
A snapshot of the forex winners and losers today show that the JPY is the strongest of the majors, while the GBP is the weakest. The USD wasn't mostly higher with most of the gains coming against the GBP, CHF and EUR. It only fell vs the JPY but the decline was by a modest -0.12%.
In the US debt market, the US treasury auctioned off $40 billion of two-year notes. The auction was well received with the high yield below the WI level at the auction time and the bid to cover above the six-month average. Yields are lower by -2 to -3.6 basis points. The yield curve as measured by the 2-10 year spread narrowed by about a basis point to 16.75 basis points.
