Forex news for NY trading on May 3, 2019
- Nasdaq closes at record highs
- Paul Winfree being considered for Federal Reserve
- CFTC commitment of traders:Net long US dollar positions highest since December 2015
- US renews sanctions waiver allowing Russia, Britain, China and France to continue nonproliferation work with Iran
- The major economic releases and events for the week May 6-10
- Fed's Kaplan (non-voter): Economy is growing at a solid rate
- Mester repeats earlier comments from CNBC
- Crude oil futures settles the day and week at $61.94
- The major earnings releases for the week of May 6 to May 10
- Feds Mester: Supports Feds patience approach
- The pound was the runaway best performer this week
- Baker Hughes US oil rig count 807 vs 805 prior
- Top US officials meet on military options in Venezuela - report
- Feds Clarida: Does not see evidence of a looming recession at the moment
- Charlie Munger and Warren Buffett. Two peas in a pod.
- Feds Bullard: Open to a rate cut if inflation still low after summer
- European shares end the session modestly higher
- Clarida: Fed can afford to be data dependent, economy in 'very good place'
- New York Fed Q2 GDP Nowcast 2.15% vs 2.08% prior
- Williams argues for average-inflation targeting in paper
- Atlanta Fed Q2 GDPNow +1.7% vs +1.2% prior
- Bitcoin moves to highest level since November on Facebook news
- Fed's Evans: Downside risks have eased by still larger than upside ones
- Fed's Bullard: Inflation is a 'little bit low'
- April ISM non-manufacturing index 55.5 vs 57.0 expected
- US April final Markit services PMI 53.0 vs 52.9 expected
- Kudlow says he thinks the Fed is looking at rate cuts
- Fed rate cut odds continue to slide
- US wholesale inventories for March 0.0% versus 0.2% expected
- US advanced goods trade balance for March -$71.4B vs -$73.0B estimate
- US April non-farm payrolls 263K vs 190K expected
- The CAD is the strongest. The GBP is the weakest as trader await the US jobs report
In other markets, the snapshot is showing
- Spot gold, plus $8.15 or 0.64% at $1278.78. The USD was the weakest of the major currencies and that helped to propel the precious metal higher. Yesteday, the price fell to the week's low at a lower trend line and bounced (see post here from yesterday outlining that support level).
- WTI crude oil futures up $.06 or 0.10% at $61.87. The contract this week traded to a low of $60.95. That was at the 200 day MA. The level will be key in the new trading week. For the technical look CLICK HERE
- Bitcoin on Coinbase is trading up $283 at $5691. For a technical look CLICK HERE
Although US stocks closed the week little changed, it took a heroic effort today to reach those "near unchanged" levels (Nasdaq was up 0.22%, S&P was up 0.20% and Dow was down -0.14%). The Nasdaq index today closed up 1.58% and the S&P closed up nearly 1%. The Russell index did even better with a gain of 1.98%.
The US shares were boosted by a combination of some Goldilocks data in the US and some more dovish comments from Fed officials that implied rates on hold for a while, with the potential for a cut if inflation expectations move lower. That sentiment dulled some of the "inflation is transitory" talk from Fed's Powell after the FOMC decision on Wednesday.
In Europe today,the major indices were mixed with Spain and Portugal closing marginally lower.
Below are the changes and ranges for the major indices in North American and Europe today.
In the interest rate market in the US today, yields fell after being higher earlier in the day. Below are the ranges and changes across the yield curve:
For the benchmark 10 year European notes, rates are closing mixed.
So what caused all the hoopla in the markets today?
The US employment data for April was released and showed an above trend jobs gain of 263K vs 190 estimate. That came on the back of a 189K gain in the prior month. In addition, the Unemployment rate fell to 3.6% from 3.8% last month. Not as great, and helping to contribute to the Goldilocks idea is that the participation rate fell to 62.8% (that helped to lower the unemployment rate) and wages were also a bit lower than expectations.
The dollar moved higher on the headlines, but quickly reversed and moved lower as traders started to view jobs with spending, but wage inflation relatively contained - especially give the 3.6% unemployment rate.
The biggest mover was the GBPUSD which fell to test the 100 day MA at 1.29809, only to have buyers sitting there and pushing the price back higher. The pair is closing near the highs for the day at 1.3177 (trading at 1.3168 near the close). The pair rose 1.04% on the day. Overall. the GBP was the strongest of the major, while the USD was the weakest (see chart below ranking the strongest to the weakest).
Also helping the sentiment for the markets today was the Fed speakers.
The quiet period that runs before the FOMC meeting, led to alot of suppressed chatter today from Fed members.
Feds Bullard, Evans, Williams, Clarida, and Kaplan were all on the wires and they generally were not raising the future inflation alarm that the markets got a little concerned about during Powells press conference after the FOMC decision.
There was also some overtures that should the inflation expectations fall, the Fed could look to ease (Bullard the dove was the dovish of course).
Also chirping away was the White House tag team of Kudlow, Hasset and even VP Pence who tagged teamed on the business news channels with the storyline that 4% growth was doable AND the Fed should contiinue to ease as inflation was no where to be seen.
That's the type of stuff that markets love. So the yields went from positive to negative, stocks soared and the US dollar fell. GOLD - I - LOCKS!
We will see how things shake out on Monday. Employment day moves can tend to lose their mojo after the weekend as traders reaccess what the hell they did. However, for now, stock portfolios got a nice boost and the longs in the USD (the CBOT said late in the day that the longs were the highest siince December 15) got squeezed a bit.
Wishing you all a great weekend and thank you for your support.
