Forexlive Americas FX news wrap. Dollar higher. Stocks higher. Yields higher
Forex news for NY trading on November 4, 2019
- Major US indices all close at record levels
- RBA decision on tap in the new day
- Lindsay Hoyle is the new Speaker of the House of Commons
- WTI crude oil futures settle the day at $56.54
- Nothing on monetary policy from Lagarde
- Euro Stoxx 600 trades at the highest level in nearly 2 years
- Goldman Sachs lowers its Q4 GDP tracker to 2.1%
- Mark it on your calendar: Fed's Powell to testify on November 13
- US factory orders for the month of September -0.6% versus -0.4% estimate
- Fed's Kashkari on the wires
- RBA meets tomorrow 0330GMT : Set to keep rates on hold
- US National Security Advisor O'Brien: US close to Phase 1 agreement with China
- Forexlive European FX News: Positive risk tone dominates for start of the week
There was not a lot of news in the NY session. The US factory orders data for September was released and it showed weakness. It came in at -0.6% vs -0.4%. That data was precluded by the durable goods preliminary data that was released on October 24th. At that time, the preliminary was weaker than expect at -1.1%
Today, the durables data was revised lower at -1.2%. In addition, the details of the data pointed to lower GDP and lower business spending as well. You can blame the China/US trade war.
Despite the weakness, the forex market shrugged off the data (instead focusing on the hopes for a deal) and continued what was a positive tone inherited from the Asian and London morning session. Those gains were spurred on by hopes that US/China phase I as progressing to signing shortly.
For the day, the USD is ending the session as the strongest of the majors, rising 0.30% or more vs the AUD, EUR, GBP, JPY and NZD (see snapshot of the major currency ranking above). The pair had the largest gain vs the GBP at 0.49%. The pound was the weakest of the major currencies today.
In addition to the USD moving higher, the US stocks also continued it's move higher. Today, all three of the major indices closed at all time record highs. Last week the Nasdaq and S&P ran higher. Today, the Dow joined in the bullish, record breaking party.
Although higher, the major indices did come off the session highs. Below is a table showing the high, low and close % changes for the major stock indices in North America and Europe.
WIth the dollar higher, and stocks higher, the next piece is the debt market. It too was encouraged by hope from China. Yields moved up acrosse the board with the yield curve steeper. Looking at the table below, the 2 year rose 3.4 bps, while the 10 year was up 6.8bp and the 30 year was up 7.5 bps. The 2-10 spread moved from 15.83 bps to 19.25 bps.
In Europe, the benchmark 10 year yield were also higher but by less than the US 10 year (supportive to the USD). France's 10 year which along with the German 10 year, remains in negative territory, but only by 4.3 bps. Does it get back above the 0.0% this week? Traders will be eyeing that yield and it may give bond sellers (higher yields) some additional nudge.
Some technicals into the new day:
- EURUSD fell to the 200 hour MA and the 50% retracement at 1.11244 and stalled. The price is hanging around the level into the new trading day. Just below the level is the 100 day MA at 1.11183 (in the new day). Moving below would be more bearish.
- The GBPUSD was the biggest mover and it fell below its 100 hour MA first at 1.29165 and near the end of the day, the 200 hour MA at 1.2886. The price low reached 1.2875 and is closing at 1.2880. Stay below the 200 hour MA keeps the sellers firmly in control.
- The USDJPY moved above the 200 hour MA and the 50% at the same 108.58 level. That did help move the price to a high of 108.643, but by the close, the 200 hour/50% level was re-broken to the downside again. THe pair is trading at 108.53 into the new day.
- The USDCAD fell to the 100 hour MA a few times (currently at 1.3141) and each time, the price bounced of the levels. The pair trades at 1.3151 into the new day. Stay above the 100 hour MA is bullish. Move below would be bearish in the new trading day.