Forex news for North American trading on October 4, 2018:
- US August factory orders +2.3% vs +2.1% expected
- WH Economic advisor Kudlow: Sense is the dollar has been steady, stable
- US weekly initial jobless claims 207K vs 215K expected
- US September Challenger job cuts +70.9% vs +13.7% y/y prior
- Bolton: US objective is to have no waivers for Iran oil purchasers
- ECB's Coeure: Sees a gradual build up in price pressures
- French stats agency lowers 2018 GDP forecast
- Barnier: EU and UK are in final stages of negotiation
- Canada Ivey PMI for September 50.4 vs 61.9 last
Markets:
- Gold up $2.26 to $1199
- WTI crude down $1.84 to $74.58
- US 10 year yields flat at 3.18%
- S&P 500 down 24 points to 2901
- GBP leads, NZD lags
There was no nice, tidy narrative on Thursday in the lead up to non-farm payrolls but if there was, it was angst about higher bond yields rather than higher yields themselves. Initially the climb continued but that eventually led to some major jitters in the stock market and spilled over into USD/JPY, which fell to 113.63 from 114.30 at the start of North American trade.
Another theme was worry about China. Mike Pence made a speech about all the ways the US is wronged by China and it appears to be part of a coordinated strategy to whip up public displeasure with China. What comes after that is anyone's guess but it's certainly something to worry about.
In FX, one story was the commodity currencies getting hit. Part of that was oil falling back to the levels at the start of the week. That helped USD/CAD up to 1.2940 from 1.2875 and the Australian and kiwi dollars were under steady pressure as well. AUD/USD earlier hit the lowest since 2016.
Cable gained on some positive Brexit comments from Theresa May and finished up 83 pips to climb above Wednesday's high in a solid turnaround.
EUR/USD slumped in Asia but battled back above 1.1515 as the Italian situation remains unresolved.
