Forex news for New York trade on October 30, 2019:
Fed news:
- Federal Reserve lowers interest rates by 25 basis points, as expected
- Fed chair Powell's opening statement: We believe monetary policy is in a good place
- Powell Q&A: It would take a 'material reassessment' of outlook to shift stance
BOC news:
- Bank of Canada leaves rates unchanged at 1.75%, as expected
- Full text of the Bank of Canada rate decision
- Poloz: Worsening global situation was primary issue for BOC deliberation
- Poloz Q&A: We're opening up a modest output gap
Other news:
- Brexit Party considering dropping out of seats to help Conservatives
- Chile cancels planned APEC summit in November
- China has offered for Trump to meet Xi in Macau as alternative to Chile
- German October prelim HICP +0.9% vs +0.8% y/y expected
- US Q3 advance GDP +1.9% vs +1.6% q/q annualized expected
- US October ADP employment 125K vs 110K expected
Markets:
- S&P 500 up 10 points to 3046
- WTI crude down 65-cents to $54.89
- US 10-year yields down 6.5 bps to 1.77%
- Gold up $8 to $1495
- AUD leads, CAD lags
I'll reuse my FOMC chart from earlier because it explains the story. The early comments were hawkish but then Powell said it would take a significant rise in inflation for them to even consider raising rates. So it's flat or lower at the Powell Fed. That hurt the dollar and that's the continuing trade now.
The Bank of Canada struck a surprisingly dovish tone earlier. Poloz said they talked about taking out an insurance rate cut -- something the market wasn't really considering. USD/CAD jumped initially and rose above 1.3200 before settling back to 1.3162 on broad USD selling. But against the rest of the field the loonie finished near the lows of the day.
Cable got a late lift from a report saying that the Brexit Party was considering pulling candidates in constituencies that would hurt Conservatives. That's a big boost to Boris Johnson's chances and -- by extension -- a smooth Brexit.
Oil was soft after a big inventory build in the US but natural gas rose sharply for the third day.
