Forex news for North American trade on August 6, 2019:
- Pence hinted at sanctions on Chinese officials on human rights abuses
- US June JOLTS job openings 7348K vs 7326K expected
- Kudlow: US is still expecting China talks in September
- Fed's Bullard: FOMC should not react to "tit-for-tat trade war"
- Bullard: I wouldn't say my outlook has changed dramatically from June
- Bullard says he wouldn't rule out more policy changes ahead
- Bullard: "I do want to take stock about how the accommodation we've put in place has had an impact"
- US sells 3 year note at a high yield of 1.562%
- Navarro says Fed should lower rates further
- New Zealand GDT price index -2.6%
Markets:
- Gold up $10 to $1473
- WTI crude down $1.17 to $53.53
- S&P 500 up 37 points to 2882
- US 10-year yields flat at 1.71%
- GBP leads, CAD lags
The stock and bond markets sent differing signals a day after yesterday's flight to safety. Equities were tentatively higher early and in the mid-morning looked like they might fall into negative territory but they held and then the bulls took over. In contrast, Treasury yields rose early but faded late even with Bullard hinting at fewer cuts.
FX was stuck in the middle. USD/JPY tracked US stocks but only peripherally and in a 40-pip range that was inside of the fixing move in Asia. We end in the middle of the range at 106.45, which is still the second-lowest close of the year.
AUD/USD was even more concerning as it grinds out a couple pips of gains in what has essentially been a 12-day losing streak and with the pair trading near a 10-year low. The pair briefly got over 0.68 but faded back to finish 10 pips above the lows.
The kiwi is in focus in the hours ahead with the RBNZ expected to cut. The jobs report yesterday was very strong and that prompted a big rally that was slowly faded and eventually erased. The decision is at 0200 GMT.
USD/CAD was the big mover. To me that looks like flows after yesterday's Canadian holiday but the slump in oil surely helped. The pair hit a seven-week high of 1.3291 and didn't give much back late.
Cable rose above 1.2200 but it's a pair that just can't hold onto gains and faded back to 1.2169 late. The no-deal Brexit talk is drowned out by the US-China story at the moment but it's ceaseless in the background.
