Forex news for US trading on October 3 2016.

  • Stocks down but off lows
  • More from Mester - Fed rate hike won't affect Italian, German banks
  • US Sept total vehicle sales 17.65m rate vs 16.91m prior
  • Fed's Mester: Prefers to move up rates gradually
  • Trump builds substantial lead in Ohio poll - highlights of the latest polls
  • Oil breaks above the August high, what's next
  • BAML sees EUR/USD at 1.08 by year-end
  • USD/JPY: Apex of triangle on solid NFP but difficult to hold 'patiently' above 100 - Deutsche Bank
  • Fed's Dudley: Monetary policy remains accommodative
  • Atlanta Fed cuts US Q3 GDP tracking estimate
  • ECB's Mersch: If a bank can't handle a few tough years, their model is broken
  • The latest on the forecasted path of Hurricane Matthew
  • FTSE not fazed by May's threats on the single market
  • Citi trade of the week: Sell GBP/JPY
  • Canada announces three new measures to cool and control housing market
  • May means what she says on Brexit says UK's Fox
  • Get ready for another big slide in cable - CIBC
  • Carmakers are discounting more aggressively than when they were bankrupt
  • ISM's Holcomb doesn't see headwinds that would obstruct growth
  • Bank of Italy takes a pot shot at Italian government's GDP target
  • US August construction spending -0.7% vs +0.3% expected
  • September 2016 US ISM manufacturing PMI 51.5 vs 50.3 exp
  • Chrysler sales fall less than estimated
  • September 2016 US Markit manufacturing PMI final 51.5 vs 51.4 exp
  • RBC Canada manufacturing index 50.3 vs 51.1 prior
  • Rough month for Ford sales
  • Early US auto sales numbers solid, Big 3 on deck
  • Brent crude still making gains on the back of the OPEC deal despite Iran hitting 4mbpd export capacity
  • It's all about the factories today
  • The strongest and weakest currencies as NA traders enter for the day

The US session was not anything to write home about.

Fundamentally, the ISM manufacturing date showed a nice rebound from the < 50 reading last month (was 49.4). The value this month was not only > 50 again but also beat estimates at 51.5 vs 50.3. Good news.

Construction spending was not so hot as it fell by -0.7% vs +0.3%. Moreover the prior month was revised lower to -0.3% from 0.0%. When the Atlanta Fed GDPNow estimate for 3Q came out at 2.2% from 2.4%, they cited the lower construction spending. The GDP tracker has now moved from a high of 3.8% back on August 5th, to 2.2% today. Since September 2nd, when there was an uptick to 3.5% from 3.2% after employment and trade, there has been a steady decline. September data has proven to not be so hot for 3Q GDP.

In other data today, car sales were robust at 17.65M annualized units. That was better than the 16.91 prior but the numbers may have been impacted by heavy discounts.

IN Fed speak today, Fed's Mester favors moving rates up gradually while Fed's Dudley said that monetary policy remained accomodative. It is not like we have not heard those exact same words being said over the last few years.

Stocks fell but closed off the lows. Bond yields were higher by about 2-3 basis points. Crude oil was higher by the end of the day by about $0.40 or 0.83%.

How about currency action? The USD is ending the day higher but mostly as a result of the weakness in the GBP. That pair saw the dollar gain nearly 1% on the day. Most of the selling occurred in the London morning session on the back of PM May saying the UK will Brexit officially by March, but the NY session did see the pair extend below the July 11th lows at the 1.2849 level before rebounding. A late day wander lower, has the pair closing below that key low level. The post-Brexit low comes in at 1.27916. The low today reached 1.2816 - not far from that low extreme.

The EURUSD played second fiddle to the GBPUSD today. The range was only 39 pips. It was extended from 23 when NY traders entered for the day, but I would not call the extra 16 pips a major result. Nevertheless, the sellers did push the price below support defined by the 100 and 200 hour MA at the 1.1217/18 area and for most of the trading day, trading took place below those MA levels (more bearish). The midpoint of the move up on Friday comes in at 1.1201. A move below that level will be eyed for increased bearishness in the new trading day.

The new day will bring an interest rate statement from the RBA. Governor Lowe will preside over his first meeting and the chance of a change is near 0%. Traders will be focused on the nuances of the statement and the technicals (see post on the levels to eye here). The bias is more bullish above 0.7650-60 (100 and 200 hour MAs) A move below, is more bearish for the pair.

The USDJPY did not go far today, but is did close at the highest level since September 20th. The 200 bar MA on the 4-hour chart at 101.607. That is about where the day ended.

Hope you have a great new day of trading.