Forex news for US trading on April 29, 2016:

  • April Chicago PMI 50.4 vs 52.6 expected
  • Canada Feb GDP -0.1% vs -0.2% m/m expected
  • March 2016 US PCE 0.8% vs 0.8% exp y/y
  • April final U Mich consumer sentiment 89.0 vs 89.7 prelim
  • Fed's Kaplan: Brexit will be a factor in June FOMC decision
  • CFTC Commitments of Traders: AUD bets rise to highest in three years
  • Citi now sees the RBA cutting rates on Tuesday
  • US restaurant performance index slipped in March
  • Baker Hughes US oil rig count 332 vs 343 prior
  • US oil production fell 0.6% in February - EIA
  • S&P says Brexit would likely lead to UK losing AAA-rating
  • Eurozone April inflation revised down after German correction
  • Germany corrects HICP estimate to -0.1% from +0.1%
  • Initial Atlanta Fed GDPNow estimate for Q2 at 1.8%
  • Fed's Kaplan: Brexit will be a factor in June FOMC decision
  • OPEC oil output near record - RTRS
  • Dallas Fed trimmed mean PCE price index +1.6% annualized in March

Markets:

  • Gold up $28 to $1294
  • WTI crude oil down 11-cents to $45.92
  • US 10-year yields up 1 bps to 1.83%
  • S&P 500 down 10.5 points to 2065
  • JPY leads, AUD lags

USD/JPY came into the session like a lamb... and out like a dead lamb. The pair broke the April lows and then bled lower for the rest of the day. The April low was 107.63 and then support at 107.00 held for a period and then it was a slow slide down to 106.28 as the bulls gave up. Tues-Thurs are holidays in Japan.

The US dollar was broadly weaker in US trading. EUR/USD started the session at 1.1390 and made a stead move up to 1.1459 at the European close. Afterwards it was a sideway chop.

GBP/US was in a wide shop from 1.4650 to 1.4590 with a few trips back and forth before settling on the low end.

After all the central bank drama this week, the focus now shifts to the RBA and increasing speculation they will cut to avoid the kind of FX surge that Japan is enduring. AUD/USD steadily slid to 0.7590 from 0.7630.

USD/CAD was fighting its own battle. It dropped to a fresh cycle low at 1.2499 but oil reversed and then the pair rallied to 1.2587. After the Baker Hughes data, oil found a bid again and USD/CAD sagged to 1.2553.

Gold was a big winner. The way I see it, this cycle of FX devaluation and central bank easing is beginning to look like it's headed towards true monetization in the long term and that's the kind of thing that would send gold to the stratosphere.

Have a great weekend. Thanks for reading.