Forex news for US trading on Sept 29, 2016

  • Some Deutsche Bank clients reduce collateral on trades
  • US second quarter GDP (third reading) +1.4% vs +1.3% expected
  • August 2016 US advance goods trade balance -$58.4bn vs -$62.2bn exp
  • Fed's Lockhart: It makes sense to see a little more evidence of progress
  • September 2016 German HICP 0.5% vs 0.5% exp y/y
  • Fed's George: Today's data shows the economy continues to progress
  • US wholesale inventories -0.1% vs 0.0% estimate
  • US initial jobless claims 254k vs 260k expected
  • Fed's Kashkari: FOMC isn't out of ammunition
  • ECB's Nowotny: Euro as a currency was never in danger
  • Mexico hikes overnight rate to 4.75% from 4.25%
  • ECB's Weidmann: We should give existing measures time
  • Some Deutsche Bank clients have pulled extra cash - BBG
  • Powell says hikes depend on the economy continuing to perform well
  • China's richest man warns of biggest bubble in history in Chinese real estate
  • Fed's Lockhart: November is live
  • US August pending home sales -2.4% vs 0.0% m/m expected
  • Russia's Novak says oil deal is a positive signal to the market
  • OPEC's Barkindo: We need a deal that's suitable for all members
  • ECB's Jazbec: It's too early to consider buying stocks

Markets:

  • Gold flat at $1321
  • WTI crude up 58-cents to $47.64
  • US 10-year yields down 1.5 bps to 1.55%
  • S&P 500 down 18 points to 2152
  • CHF leads, AUD lags

It was all about the yen early and the euro late.

The yen was weakening into the start of US trading on the follow-through from the positive sentiment on the OPEC deal and fresh worries about BOJ easing, in part due to a weak retail sales report.

USD/JPY peaked for the day in the first hour of US trading after better GDP and trade reports. The high print was 101.84 and there was some consolidation down to 101.50 afterwards. About an hour after Europe closed, the Deutsche Bank headlines hit and hammered shares of the company and also broad risk sentiment. USD/JPY fell as low as 100.82 before bouncing just above 101.00.

The Deutsche Bank story is really just about a few clients removing some excess cash but it fits into the broader theme of worries about capital at the bank and the market was quick to hit the panic button. The S&P 500 had traded as high as 2172 but skidded down to 2145 in short order before stabilizing late.

USD/CAD was caught in the crossfire. It was lower on continued oil gains but risk aversion overpowered the selling and it recovered to 1.3184 from 1.3054 at the start of North American trading.

The euro was naturally hit by the DB news but perhaps not as much as the cross-asset moves would indicate. It fell to 1.1205 after hitting a session high of 1.1250 minutes before the banking news. It declined further against the yen but will finish flat or slightly higher on the day and is one of the better performers.

Cable was soft in US trading. It had been flat before New York arrived at 1.3020 but slowly dipped down to 1.2955 at the lows and finishes a touch higher. A round of swift selling hit as stops were broken below 1.2990/80 in a quick move at the London fix. It later recovered before risk aversion weighed.

EUR/CHF grabbed the spotlight in a drop to a five-week low. It's now threatening the longer term range with a test of the Brexit support near 1.08.

The Australian dollar had been slowly climbing in the early part of US trading in a chop up to 0.7690 from 0.7660 but it sank alongside stocks to finish at 0.7635.