Forexlive Americas FX new wrap: Decent jobs data keeps Fed's Powell consistent
Forex news for NY trading on September 6, 2019
- US major indices ending the day with mixed results
- CFTC commitment of traders: EUR shorts increase by 10K this week
- US crude oil futures settle at $56.52. Up 2.5% on the week.
- Risk for EUR is positive for next week's ECB meeting - BAML
- What we learned from Powell in Zurich: Six takeaways
- Powell Q&A: Says Fed watching data and geopolitical developments
- More Powell: Not actively considering a digital US currency
- Baker Hughes oil rigs down for the 3rd straight week to 738 vs 742 last week
- Fed's Powell: There is significant risks to economic outlook
- European equity close: Modest moves but to the upside but a great week
- NY Fed Q3 GDP Nowcast tracker cut to 1.5% from 1.8%
- Brexit delay bill passes House of Lords, set for royal assent
- There's a theory that headline economic data headlines don't tell the story
- Kudlow: There are no conditions for the October trade talks
- Canada August Ivey PMI 60.6 vs 54.2 prior
- Kudlow: US-China phone call earlier this week went well
- Gold bounces from $1500 in a strong rebound
- Canada net change in employment for August 81.1K vs 20.0K estimate
- August non-farm payrolls +130K vs +160K expected
- ForexLive European FX news wrap: Markets mildly upbeat ahead of payrolls, Powell
- The NZD is the strongest and the CHF is the weakest as traders await the jobs data
In other markets, the end of the day snapshot is showing:
- Spot gold, fell $-12.42 or -0.82% at $1506.56
- WTI crude oil futures are up $0.29 or 0.52% at $56.59
In the US stock market today, the major indices close mixed with the S&P up 0.09%, the Dow industrial average up 0.26%, but the NASDAQ composite index fell -0.17% European indices also closed with mixed results, with the German Dax up 0.54%, whiile Spains Ibex, Italy's FTSE MIB and Portugal's PSI 20 all close with modest declines. Below is a look at the percentage high low and close changes for the major North American and European stock indices for the day.
In the US debt market, 30 year yields get back some of the gains from yesterday (-3.0 basis points), but 2,5 and 10 year yields are ending the session little changed:
In the European debt market, benchmark yields fell sharply once again, with UK yields down -9.4 basis points, German yields fell -4.4 basis points.
Next week on Thursday, the ECB is expected to cut the deposit facility rate by 10 basis points to -0.50%. There is a 45% chance of a 20 basis point cut.
Today, was employment day in the US and in Canada. In the US nonfarm payroll rose by 130K. That was lower than the 160K estimate and the ADP estimate of 195K. Revisions shed -20K from the prior months. The unemployment rate remained steady at 3.7%. The participation rate rose by 65.8% from 65.6%. Average hourly earnings YoY came in better than expected at 3.2% versus 3.0% estimate (3.3% last month). The data helped to send the US dollar mostly lower on the day. However, it did rise versus the GBP (there will be ups and downs on Brexit) and the CHF. Below are the rankings of the strongest verse weakest for the major currencies today.
Later in the day, Fed's Powell was in position to give the final word before the blackout period for Fed officials before the September 18 decision day. As Adam pointed out, the key takeaways from the Fed chair was:
- No recession
- Moderate growth, but does not want to see inflation slipping
- A more tame tone on inflation and how inflation is especially well anchored
- There remain geopolitical risks and data risks
- Exhibited humility in the Fed's experience in working through trade disputes
- He gave no pushback against a continued modest decline in rates.
So we can expect a 25 basis point cut in September, but 50 basis points is being priced out of the market once again. This week the expectations one is highs around 27% but is ending the week at 7.4% for a 50 basis point cut.
For the trading week, the AUD was the strongest of the majors. The AUDUSD was higher each of the last 4 trading days after a run to test the lows on Tuesday fell short.
The NZD was right behind the AUD as the second strongest currency. It rose each day this week. The GBP also rose this week vs most of the major currencies. The biggest loser this week was the JPY and the USD. Below are the rankings of the major currencies for the week.