Forex news for NY trading on June 30, 2020.
- US stocks end the quarter with a bang
- WTI crude oil futures settle at $39.27
- California cases rise 2.9% vs 2.8% 7 day average
- Houston ICU wards at 97% of capacity
- Mnuchin: Working with House and Senate on additional financial relief by end of July
- Fauci: In reality only 50% of the US shut down
- European shares end the session with mixed results
- Arizona coronavirus cases rise record record 4682 but there's a caveat
- Fed's Williams: There are indications that recovery slowing in states with outbreaks
- Florida coronavirus cases rise 4.2% vs 7-day average of 5.6%
- Gold hits $1780 for the first time in seven years
- BOE's Cunliffe says that on negative rates we should not draw dogmatic lines
- OPEC and Russia will like ease cuts in August - report
- Chatter: Texas hospitalizations from coronavirus decline 20%
- US June Conference Board consumer confidence 98.1 vs 91.4 expected
- OPEC output falls 1.92 mbpd in June to lowest since at least 2000 - Reuters survey
- US April 20-city Case-Shiller house price index +3.98% vs +3.8% y/y expected
- Canada April GDP -11.6% vs -12.2% m/m expected
- The USD is the strongest and the EUR is the weakest as NA traders enter for the day
The expectations was that quarter end rebalancing was going to lead to selling stocks and buying bonds. Early selling last week saw the S&P index move from 3154 down to a low of 2999 early yesterday. However, since then, buying took over and forced the index to a high today of 3111.51. That rise was capped with a solid gain of 1.54% in the S&P today.
The Nasdaq did even better with a 1.87% on the day.
For the quarter, the major indices all had multi year high percentage gains.
- The Dow rose by 17.77% which was the largest gain since 1987
- The S&P rose by 19.95% which was the largest gain since 1998
- The Nasdaq rose by a whooping 30.63% which was good enough for the largest rise since 2001.
In the forex market given the month end, how did the major currencies rank for June?
Taking the % changes of the major currencies vs each other and accumulating the changes to rank each currency, the NZD and AUD is ending as the strongest of the majors. That makes sense given the "risk on" move into stocks for the month. The JPY and the USD were the weakest of the majors which again makes sense given "risk on" flows.
For the year to date, the picture is still leaning toward the flow into the safety of the CHF and the JPY as stocks are overall still down across the board with the exception of the Nasdaq index for the year. The GBP is the weakest as it has continued to deal with the Brexit risk. The CAD is the next weakest currency for the year. That weakness can be broadly attributed to the sharp fall in crude oil prices in 2020.
Regarding oil, the price at the end of March closed at $20.48 and closed today at $39.37. That is a gain of $18.89 or an oversized gain of 92% for the quarter.
For the year, however, the end of December price was up at $61.06. For the year at $39.37, the price has fallen $21.69. That is equal to a -35.5% decline for the year.
Gold today closed around $1781, which happens to be the highest close since early October 2012. For the quarter, the price of gold settled at the end of March at $1577. The $204 gain represents a 12.93% gain for the quarter. For the year, the price of gold settled at $1517. The gain for the year is $264 or 17.4%.
In the US debt market, the 2 year yield in the 2Q went from 0.2455% and is currently trading at 0.1485%. That is a decline of 9.7 bps The low yield reached 0.1568%. For the year, the end of year yield was up at 1.5691%. The decline was a much larger 142 bps on the year.
