Forex news for North American trading on March 4, 2021
- Major indices tumble with the NASDAQ/Russell index lead the declines
- US Senate votes to start debate on Biden stimulus plan
- Magnitude 8 earthquake in Kermadec Island region off the coast of New Zealand
- WTI crude oil futures settle at $63.83
- Russia's deputy PM Novak: Oil markets will return to pre-crisis levels in 2022
- Gut check time as Powell leaves the market to fend for itself
- Before and after from the Powell interview with the Wall Street Journal
- US dollar and Treasury yields rise as Powell offers no hints at anything
- Fed's Powell: I would be concerned by disorderly conditions
- OPEC+ meeting summary is released. Saudi production cuts to remain. Russia and Kazakhstan allowed to increase production
- European shares close the day with mixed results
- Bitcoin tries to hold MA support. Key levels for the technical bias.
- OPEC+ agrees to keep oil output unchanged in April - report
- Treasury refunding announcement is in-line with expectations
- Oil hits another high as headlines pit OPEC members against Russia
- US January factory orders +2.6% vs +2.1% expected
- Canada Q4 labor productivity -2.0% q/q vs -1.9% expected
- US initial jobless claims 745K vs 750K estimate
- The AUD is the strongest while the CHF is the weakest as NA traders enter for the day
The markets were geared up for some Powell relief in the bond market during his interview with the WSJ (the Fed is entering a quiet period so this would be the last chance before the FOMC decision later in the month). That relief did not come. As a result, rates started to move higher (they were marginally lower at the start of the North American session), stocks started to give up gains and turned negative. The dollar turned from modestly lowered, and soared higher. Gold moved lower.
The stock selling saw the Nasdaq index move down by -3.41% at the lows. If you thought that was bad, the Russell 2000 fell as much as -4.42%. The Dow was down as much as -711 points at the low.
The Nasdaq 3 day decline has sent the index down -6.506% over that period (the largest 3 decline going back to September 3, 2020). The declines have now erased the gains for the year (the NASDAQ is now down -1.28% on the year). The Dow industrial average is now the biggest gainer at 1.04% YTD.
In the forex market, the USD packed on solid gains vs most of the majors. The USD was strongest vs the CHF (up 1.03%) as the run higher continues in that pair. The price moved up to test the swing highs going back to September 2020 at 0.92956 (the pair is closing the day just below that key target).
The USDJPY moved up 0.87% and trading to it's highest cycle high. The pair is trading at the highest level since July 1, 2020 and is looking to get above the 108.00 level also for the first time since July 1, 2020.
The EURUSD fell back below its 100 day MA and ran (the 100 day MA is at 1.20268 and the EURUSD fell to a low at 1.1961). The GBPUSD ran up to test its 200 hour MA at 1.4017 just before Powell's interview, and then tumbled to a low of 1.3880 into the close.
In the bond market, the yields along the yield curve saw the 10 year rise by 7.1 basis point. The 2 -10 year spread widen to 140.92 basis points from 134.01 basis points as concerned about inflation continue to push yields higher.
In the metals markets:
- Spot gold is trading down -$13 or -0.76% and is below the $1700 level at $1698.37.
- Spot silver tumbled $0.72 or -2.77% to $25.37
- WTI crude oil futures rose by $2.73 or 4.45% to $64.01. The OPEC+ meeting saw Saudi Arabia keep production cuts in play through April, but allowed Russia and Kazakhstan to raise production marginally.