Forex news for North American trading on May 27, 2020:
- Beige Book: Economic activity declined in all districts – falling sharply in most
- May Richmond Fed manufacturing index -27 vs -40 expected
- Bullard: Favors forward guidance based on state of econ vs calendar
- US coronavirus deaths rise by 770 vs 592 a day ago
- Bailey says BOE willing to do more to combat virus fallout
- Pompeo reports to Congress that Hong Kong is no longer autonomous
- UK virus deaths rise 412 vs 134 yesterday
- Dallas Fed services sector index -41.7 vs -83.9 prior
- Fed's Williams: We're seeing some signs of pickup
- Canada April building permits -17.1% vs -13.2% prior
- Full vetting underway for 10 candidate to be Biden vice-president - report
Markets:
- Gold up $2 to $1712 after falling to $1694
- WTI crude oil down $1.40 to $32.94
- S&P 500 up 37 points to 3029
- US 10-year yields down 2 bps to 0.677%
- EUR leads, AUD lags
It was tough to stay on balance in North American trade. On the surface it looks like another big rally in the stock market but there was a big early dump in the stay-at-home and tech stocks that started with a drop in the Australian dollar.
Midway through the session the negativity evaporated. It's easy to draw a line to the Pompeo comment because that's when it reversed. To me, the market had to have been expecting something worse, or perhaps it was a case of buy-the-fact.
In any case, US stocks made a big comeback to finish at a fresh post-pandemic high and put a stamp on the rally above the 200-dma in the S&P 500.
Elsewhere there were some concerns with AUD/USD not making the same kind of comeback. Oil also finished down nearly 5% lower.
The BOE's Bailey talked about a rate cut again but it was Brexit worries that weighed on cable as it sank to 1.2200 from a high of 1.2350. There were bids at the figure and it bounced to 1.2255 late.
The euro took another run at the tough resistance in the 1.1000/20 range and dipped quickly to 1.0950 but the pair rebounded to finish at 1.1000.
