Forex news for North American trade on January 28, 2020:
- US January Conference Board consumer confidence 131.6 vs 128.0 expected
- Richmond Fed manufacturing index for January 20 versus -3 estimate
- US durable goods orders for December 2.4% versus 0.4% estimate (but core weak)
- ECB's Weidmann says Sept stimulus not needed to this extent
- Magnitude 7.7 earthquake hits between Cuba and Jamaica
- US CBO forecasts $1 trillion FY2020 budget deficit
- France confirms fourth case of coronavirus (and a worrisome chart)
- Pres. Trump proposes 2 state solution for Israel and Palestinians
- CDC: Travelers should avoid all non-essential travel to China
- Case-Shiller November US 20-city house price index +2.55% y/y vs +2.4% y/y expected
Markets:
- S&P 500 up 33 points to 3276
- WTI crude oil up 41 cents to $53.55
- Gold down $14 to $1568
- US 10-year yields up 4 bps to 1.65%
- CAD leads, CHF lags
The flip switched on risk Tuesday, particularly in equities and gold. In FX and bonds the response was more tepid as the market struggles to price in coronavirus risks.
Easier to price in is US economic data and consumer confidence and the Richmond Fed both beat estimates. That helped to push USD/JPY higher and the pair gained a quarter-cent on the day to 109.17. Durable goods orders were good on the main headline but core orders were the worst since April but the market was willing to look past it.
Cable was beaten up in the early going and was sold especially hard into the London fix where it hit a low of 1.2975 but slowly recovered late to 1.3023. The euro followed a similar pattern and finished flat on the day.
AUD and NZD were tepid on better virus sentiment but CAD was strong as USD/CAD fell to 1.3160 from 1.3200 at the start of Toronto trade. Late-breaking oil inventory data also helped to boost oil and the loonie.
