Forex news for North American trading on October 4, 2021.
- Nasdaq takes it on the chin with a loss of over 2%
- Fixing the power crunch won't be easy. Charts to consider
- RBNZ strategy: Hikes coming but analysts not bullish
- Elizabeth Warren calls for SEC to investigate Fed trading
- Internet outages are spreading
- Biden: The US always pays its debt
- European equity close: Soft start to the week with Germany lagging again
- USTR will explore new tools to defend US interests regarding China
- Fed's Bullard: Inflation might not fall back to the Fed's 2% goal
- US August factory orders +1.2% m/m vs +1.0% expected
- OPEC+ agrees to stick to planned output hike of 400k bpd
- World's top commodity trading houses face margin calls over natural gas - report
- WTI crude rises above $77 for the first time since 2014 as OPEC+ meeting gets underway
- OPEC+ joint monitoring committee recommends sticking with 400k bpd increase. Brent smashes through $80
- WTI crude oil climbs above $76 in quick move higher. Nears the post-pandemic high
- Strong movie theatre numbers highlight the reopening trade
- Canada August building permits -2.1% vs -3.9% prior
- The CHF is the strongest and the JPY is the weakest as NA traders enter for the day
The USD was the weakest of the major currencies today and continued to erase some of the recent gains seen in the greenback.
Some of the normal lower dollar catalysts were not necessarily present.
- US yields are closing higher. Typically lower yields leads to dollar selling
- US stocks moved sharply lower with the Nasdaq the hardest hit. There was no flight to the USD safety on the sell off.
- Crude oil moved sharply higher after OPEC+ stuck to their plan of 400K BPD increase (did not raise production). This can be dollar bullish at times and dollar bearish at other times
A standard negative dollar catalyst came from continued haggling in Washington over the debt ceiling with McConnell sending Biden a letter urging him to make it a Democratic decision as he was not to get support from the Republicans. Biden responded that the debt limit is about paying back past debt and therefore should be a bipartisan decision. Meanwhile, regarding the reconciliation bill, it appears that the $3.5T is more and more a hope of the past.
Feds Bullard back continued to reiterate his hawkish views saying that inflation risks are to the upside and that the Fed may face inflation at his over it 2% target for the foreseeable future.
Looking at the ranking of the strongest to the weakest currencies, the CHF was the safe haven currency today and the strongest of the majors. The USD was the weakest followed by the JPY.
Looking at the snapshot of the US debt market, the benchmark 10 year yield was up 1.5 basis points to 1.482%. The five year was up 1.4 basis points at 0.9474%. The yield curve was steady near 120 basis points.
As mentioned, US stocks moved sharply lower with the NASDAQ the hardest hit. That index is down six last seven trading sessions and has shared -7.5% from the all-time high. Today the index fell -2.14%. The S&P index was down -1.3%. The Dow fell -0.94%. European shares are also lower across the board with the German Dax down -0.79%.
What could've been a catalyst for the declines was there was a number of outages across various websites and telecommunication channels including Facebook, Twitter, Amazon Web services, Zoom, T-Mobile, ATT, Southwest Airlines. The nature of the shutdowns raises an eyebrow as to the source and extent of the issues. Is the internet under attack? Facebook told employees the cause was unknown. Time will tell but it could be a negative.
