Forex news for North American trading on April 29, 2019:
- US March PCE core +1.6% vs +1.7% y/y expected
- Mnuchin: Hopes that US, China can finalise trade deal in two more rounds of talks
- Treasury cuts borrowing estimates for April-June period
- Brexit: Talks with Labour take a positive turn - report
- Kudlow says Trump has not made up mind on higher fuel tax
- First Atlanta Fed GDPNow Q2 estimate is 1.3%
- Lagarde says 70% of the global economy is still slowing
- Dallas Fed manufacturing activity +2.0 vs +10.0 expected
- Pompeo says US will ensure oil market well supplied when Iran oil waivers removed
Markets:
- Gold down $6 to $1280
- S&P 500 up 5 points to 2944
- WTI crude up 32-cents to $63.62
- US 10-year yields up 3.4 bps to 2.53%
- EUR leads, JPY lags
The general theme in New York trade was US dollar weakness, which was a continuation of the post-GDP trade on Friday. None of the moves were particularly large and the closing changes of the day will be 30 pips or less.
The largest move was in the euro, which climbed a third of a cent to 1.1185 with nearly all the gains coming in North American trade. There was no particular catalyst but there is some optimism about Eurozone GDP later this week and Friday's CFTC report showed that euro shorts continued to be overcrowded.
USD/JPY did a round trip from 111.70 to 111.90 and then back down. Higher yields spurred the early move along with a climb in stocks but it's tough to trust any yen moves with Japan on holidays this week.
Cable slipped early only to recover and climb towards the European highs late. We learned that parliament won't be debating any Brexit bills this week but Labour and Conservatives continue to meet. Some of the upside came after a report saying the tone of the talks had improved.
The Canadian dollar was a notable standout in part due to a bounce in oil prices into positive territory to end a three-day losing streak. The loonie has held up well even on days of oil weakness and that could be a tell or could be a sign of oil-settlement flows at month end. Last at 1.3447.
AUD and NZD were entirely subdued. The Aussie slipped down to 0.7040 only to rebound to 0.7060 in a 15-pip climb on the day.
The day ahead brings with it a busier economic calendar and that should get things moving.
