Forex news for NY trading on May 6, 2020
- S&P and Dow close at session lows
- Pres. Trump: China may or may not keep the trade deal
- WTI crude oil futures settle at $23.99
- Fed's Bostic: Don't see Fed rates shifting in a significant way
- Pres. Trump: Virus task force will focus on reopening
- Fed's Kaplan: sees a significant contraction in US GDP in the 2nd quarter
- UK total coronavirus deaths top 30,000. Cases top 200,000
- European shares mostly lower on the day
- DOE crude oil inventories 4590K versus 8800K estimate
- China could have prevented the deaths of hundreds of thousands of people
- ECB is keen to avoid direct role in German constitutional court legal case
- ECB's Villeroy: Our determination for the future to deliver on that mandate is total
- Germany's Merkel: we have 1st phase of coronavirus pandemic behind us
- Fed's Barkin: Recovery will be slow. Lawmakers will need to contemplate what next
- US quarterly refunding $96 billion. Higher than expectations
- Fed's Bullard: We've been successful with the Fed program so far
- ADP employment change for April -20.263M vs -21.00M
- The JPY is the strongest and the GBP is the weakest as NA traders enter for the day
In other markets:
- spot gold felt $19.27 or -1.3% to $1686.70
- WTI crude oil futures fell $0.42 or -1.71% to $24.14. The high price reached $26.08 while the low extended to $22.58. Crude oil inventories came in with less a build than expectations. Him
The ADP employment change for the month of April came in better-than-expected by 314,000, but when the number of job losses totals -20,236,000 vs expectations of -20,550,000, the 314K is more of a rounding error.
Gulp!
The ADP is a precursor to the nonfarm payroll on Friday (at 8:30 AM ET) which will show an equally as bad number. The expectations are currently at -21,250,000 that comes after a -701,000 decline last month. The unemployment rate is expected at 16%. However, estimates range from a low of 11.6% to a high of 22.0%. Fed's Bullard today said unemployment could reach 20% or even higher. Fed's Kaplan also speculated that unemployment could cap out at 20%. Last month, the unemployment rate moved to 4.4% from 3.5%.
Gulp (again)!
In the forex market today, the JPY was the strongest of the majors followed by the USD. On the other extreme was the GBP, NZD and CAD for the weakest of the majors.
As for some of the major currency pairs:
- EURUSD. The EURUSD fell to a day low at 1.07813 in the London morning session. In the process the pair fell below swing lows from April 27 of April 28 between 1.0808 and 1.0815. In the New York session the price extended above those levels to a high of 1.0838, but has spent the last 8 hours trading below 1.0815. We trade at 1.0796 into the close. Stay below 1.0815 keeps the sellers in control in the new day. A support target would be in the 1.0755-63 as the next key downside target
- USDJPY. The USDJPY fell below the earlier week lows at 106.35-44 in the Asian session, and corrected into that area in the London morning session only to find willing sellers. The low price extended just below the 106.00 level to 105.978. It will take a move back below the 106.00 level to solicit more selling momentum. On the topside, stay below 106.44 and sellers remain in control
- USDCAD. The USDCAD moved up to test a swing area at 1.41596 and the high price from Monday's trade at 1.41513. The hi for the day stalled between those levels at 1.4156 and corrected 38.2% of and intraday trend move from 1.4043 to 1.4156. That retracement level came in at 1.4113. The afternoon New York session low came in at 1.41138. Into the new day, a move below the 1.4113 level will be needed to solicit more downside probing. Until then however the buyers remain more in control.
- NZDUSD. The NZDUSD traders formed a ceiling this week between 0.6070 and 0.6076. On the downside a floor was established at 0.6007 to 0.60108. After testing the topside ceiling in the early London session, the the price rotated to the downside in the New York session and close the day below the floor (at 0.6007). The price is trading at 0.6006. Sellers - in the new day - will be tasked with extending the fairly narrow trading range for the week. The next target support comes in at 0.5991 (swing low from April 28) below that the April 24 swing low at 0.59751 will be targeted.
In the US equity market today, the S&P index and Dow Jones industrial average closed at session lows – given up earlier gains. For the NASDAQ index it still closed higher by 0.51%. However it too was well off its highs for the day. Below are the percentage changes of the major US and European indices. European indices were mostly lower with the UK FTSE 100 eking out a small gain the one exception.
