Forexlive America's news wrap: Gold tumbles and yields rise after better ISM data
Forex news for NA traders on November 5, 2010
- The bell rings and the Nasdaq and Dow close at new records
- Nikkei reports: China is doubling down on demands that may threaten trade deal
- Remember...NZ employment report will be released at 4:45 PM ET
- US crude oil futures settle at $57.23
- US ambassador to EU Sondland: Ukraine probe was condition for Trump meeting
- The US treasury sells $38 billion of 3 year notes at 1.630%
- Fed's Kaplan from Dallas: The US consumer is strong
- What is moving today? A review of the market at midday.
- Atlanta Fed GDPNow estimate for 4Q growth moves down to 1.0% from 1.1% last
- NZ QV house price YoY for October rise 2.8% vs 2.4% last month
- More from Fed's Barkin: It is a good time to pause with interest rates
- JOLTS job openings for September 7024 vs 7063 estimate
- US ISM nonmanufacturing index for October 54.7 versus 53.5 estimate
- Markit US services PMI for October 50.6 vs 51.0 preliminary reading
- Spot gold tumbles and back below the $1500 level
- China Global editor: US and China must simultaneously move on tariffs
- Canada international merchandise trade for September -0.98 billion versus -0.65 billion estimate
- US trade balance for September the $-52.5 billion versus $-52.4 billion estimate
- The AUD is the strongest while the CHF is the weakest as NA traders enter for the day
- Fed's Barkin: If the consumers keep spending, US economy is in a good place
Yields in the US continued to move higher for the 3rd consecutive day helped by better ISM non-manufacturing data today and hopes that US/ China phase I will be completed soon (there is some worries about that too but hope springs eternal). The US yields are ending up from 4 to 7.5 bps across the curve. It is the 3rd day higher for yields. The 10 year has moved up about 20 bps over that period.
The higher yields, with less US/China fear and a higher dollar helped to push the price of safe haven gold price sharply lower today. The price of the precious metal is trading down -$25.19 or -1.67% at $1484.48 near the end of the NY day. Technically, the price fall took the price back toward the 100 day MA at $1475 area. The low for the day reached $1479.20. Although, $4-$5 from the MA, it was still the closest to that lagging indicator since the price spiked above the MA at the beginning of June 2019 (the price moved above that MA down at $1296) going forward, a move below that 100 day moving average should solicit more selling. Be aware.
US stocks the day ended the session mixed with the S&P index down -0.12%, the NASDAQ index up a small 0.02%, and the Dow industrial average up 0.11%. The higher closes in the NASDAQ and Dow are new records for those indices. The S&P's close lower snapped it's string of record high closes. Overall, the stock market seems tired after the recent run to new all time highs, but if this is a down day, the bulls can live with it.
For the USD, the greenback started the North American session mixed with gains against the CHF, JPY and EUR and declines vs the AUD, NZD and CAD. By the end of the day, the dollar moved higher vs the all the major pairs with the exception of the AUD (the dollar was unchanged vs the GBP). The dollar moved the most vs the JPY (+0.52%), the EUR (+0.49%) and the CHF (+0.47%).
For the EURUSD, the pair trended lower for most of the day with little in the way of a correction. The move took the price below the swing lows from last two weeks at 1.1073 area and for the most part, stayed below that area over the last 6 hours of trading. Admittedly, the price low stalled at 1.1062 - so the range was confined over that time period. However, after a run of 76 or pips lower, the correction was modest at best. Watch the 1.1073 area in the new day. If the price starts to trade more comfortably above, there could be more upside momentum. If the price action continues to have lid on the pair, the sellers remain in control.
The USDJPY also trended higher in trading today. It start of the New York session higher at 108.80, and continued above the 100 day MA at 109.01 onto it's way to the high for the day at 109.237. In the new trading day as lows price can remain above its 200 day moving average, the buyers will remain in control.
Fundamentally today, the US trade data remains in a large deficit at $-52.5 billion, but the good news is that was higher than the prior month's. The Markit service PMI came in weaker at 50.6 versus 51.0 preliminary reading. However, the nonmanufacturing ISM for October was much better-than-expected at 54.7 versus 53.5 estimate. Go figure.
The JOLTs data is softer, but job openings of over 7 million (the job openings came in at 7.024M) is still quite healthy. So you can't be too critical about the miss vs the exectation of 7.063K.
The Atlanta Fed GDP now estimate for 4Q GDP is low at 1.0% vs 1.1% last. It is early and the series can be volatile, but a growth rte of 1.0% ain't what the President wants.
Fundamentally in the new day, traders will keep their eyes on the China demands for tariffs. I worry about the Phase I deal falling apart as a result of the reluctance to walk back the previously impose tariffs on Chinese goods.