Forexlive Americas FX news wrap: ECBs TLTRO3 started. US considers delaying Mexico tariffs
Forex news for NY trading on June 6, 2019
- Another up day for the major indices today
- Russia Novak: Talking of moving OPEC meeting to July 4 from end of June
- US/Mexico are considering deal that could boost Mexican immigration enforcement
- US employment statistics to be released tomorrow. What should you expect?
- US weighing delaying tariffs as time is running short
- More Williams: Uncertainty around trade is affecting business leaders
- Fed's Williams: Too low inflation is more pressing problem today
- Mexican Foreign Minister Ebrard: Thinks US/Mexico has made some advances on Thursday
- Russian energy Minister Novak: Planning to meet Saudi's Al-Falih today
- Atlanta Fed GDPNow estimate for Q2 growth rises to 1.5% from 1.3%
- US household net worth rose 4.5% in 1Q
- Trump aide Schlapp: Mexico not offering enough to avert tariffs
- European shares close mixed on the day
- Kaplan talks to reporter: He does not want to prejudge a need for Fed cut
- Five things we learned from Draghi and the ECB today
- IMF Lagarde: US economic indicators show lots of positives
- IMF raises 2019 US growth to 2.6% from 2.3%
- Canada May Ivey PMI 55.9 vs 55.9 prior
- More from Fed's Kaplan: Global growth is decelerating
- Draghi Q&A: Uncertainty about global trade has increased since March
- Fed's Kaplan: US has a very tight labor force
- ECB 2019 GDP forecast edges higher but 2020 and 2021 lowered
- Draghi opening statement: Data was 'somewhat' better than expect in Q1
- Canada April international merchandise trade vs -$0.97B vs -$2.80B expected
- US nonfarm productivity for 1Q (Final) 3.4% versus 3.5% estimate
- US April trade balance -$50.8B vs -$50.7B expected
- US initial jobless claims 218K vs 215K estimate
- The EUR is the strongest while the USD is the weakest as NA traders enter for the day
A snapshot of other markets are showing:
- Spot gold is hanging on to a $3.50 gain or 0.26% rise at $1332.91. The high-priced extended to $1339.95. The low reached $1327.15
- WTI crude oil futures are trading up $1.60 or 3.10% at $53.28. Hopes that OPEC will be able to get supply in order and that the global terror fears would subside are helping the rebound today.
- Bitcoin on Coinbase is trading down $-50 at $ 7681.63. The low reach $7458.41. The high extended to $7871.13
The US stocks closed higher on the day with the Dow Jones leading the way at up 0.71%. European shares ended the session mixed today.
The US yields are ending mixed with a flattening of the yield curve. The 2 year yield is up the most at +3.6 bps. The 30 year bond's yields is down the most at -2.6 bps.
The snapshot of the major currencies are showing that the EUR is the strongest, while the JPY is the weakest. The USD was also weaker with most of its decline vs the EUR, CAD and CHF.
The ECB announced the terms of the TLTRO3 program, but also said interest rates to remain at their present levels at least through the first half of 2020. That was construed as less dovish, as the market was looking for a sign that rate cuts could be right around the corner. This action was was seen as a more wait-and-see indication.
Nevertheless, although the EURUSD kept most of the gains for the day (it is trading up 52 pips) near the close, it was not a smooth ride. The pair was able to get above the 100 day MA but did find sellers smack dab against a topside trend line at the 1.13084 level. That limited the price action higher. The pair is closing right near it's 100 day MA at 1.12738. Traders are still struggling with the idea of the EURUSD going higher (at least for now).
In other market moving news today, the US/Mexico negotiations for ebbed and flowed with tariffs on and tariffs off.
A Washington Post article in the NY afternoon stating that Mexico had pledged up to 6000 national guard troops at its southern border to stem the flow of illegal immigrants, helped send stocks higher, and the USDJPY to a new high for the day at 108.557 (and week - the pair has been in a narrow 66 pips range this week).
However, just when you thought a deal was imminent, a White House spokesperson is on the wires now saying the US is moving forward with tariffs.
I am not one to believe in market manipulation, but it sure seems like if someone knew the next headline on trade (whether US-Mexico, US-China, or future problems with US-EU), you could make ton of money trading the swings.....Others are feeling that Pres. Trump is just looking to enact the border security tariff as a way to tell his base that Mexico tariffs are helping build the wall.
Anyway, for all the excitement,the new week range for the USDJPY is now up to 75 pips for the week from 66 previously.
The USDCAD erased all the gains from yesterday today (up yesterday, down today) and in doing so is also testing the May 22 low at 1.33536. The low today reached 1.3359. The move lower takes the price closer to its 100 day MA at 1.33486. The last time the price traded below the 100 day MA was back on April 17.
Fed speak today had Kaplan and Williams speaking. Both expressed concerns about risks to growth, but both also stopped short of saying they are "all in" on a cut.
Tomorrow sees the Canada and US employment reports released at 8:30 AM ET. It will be a welcome relief from the political headlines (at least over those minutes). However, with the clock ticking toward the Monday deadline, it seems that traders will have to deal with the risks (and squaring up flow) into the close. We could be in for another choppy session.