Forex news for July 8, 2020
- California coronavirus cases 11,694 vs 6090 yesterday
- Fed's Bullard says he's still optimistic on the outlook despite virus resurgence
- Tennessee coronavirus cases rise 2472 in largest one-day rise - RTRS
- US May consumer credit outstanding -$18.28B vs -$15.0B expected
- WTI crude oil futures settle at $40.90
- Canada fiscal update forecasts $343.2B deficit, vs +$300B rumoured
- US CDC reports 50,304 new cases as deaths rise
- Fed's Rosengren: Expects that US economy will remain weaker than hoped
- US sells 10-year notes at 0.653% vs 0.663% WI
- Atlanta Fed Bostic (non-voter): Need appropriate level of caution as we reopen economy
- US stocks back in the black. European shares end mostly lower on the day
- Johns Hopkins: US coronavirus cases top a 3 million
- New York intubation's below 100 for the 1st time since March 16
- Arizona case count rises to 3520 vs 3352 yesterday
- EIA weekly US oil inventories +5654K vs -3250K expected
- Florida coronavirus cases rise 4.7% vs 7-day average of 5.0%
- Gold makes a fresh 9-year high at $1807. What's next
- GBP shrugs off tax announcements from Sunak
- The EUR is the strongest and the USD is the weakest as NA traders enter for the day
- UK's Sunak: To temporarily cut stamp duty tax on home purchases up to £500,000
- UK's Sunak: We will do all we can to give everyone job opportunities
- US MBA mortgage applications w.e. 3 July +2.2% vs -1.8% prior
The news flow was limited with mortgage applications +2.2% on the week), Coronavirus numbers (ok but market is ignoring - some flattening perhaps in Arizona and Florida ), a positive Coronvirus press conference (or at least reaction) with Pence and Dr. Birx speaking and seeing flattening in places like Arizona and Florida, some positive near end-of-day comments from Fed's Bullard who said the unemployment rate could get to 8% (Fed central tendencies sees 9.3%).
Good news (or good hopes) tends to send the dollar lower (out of the safety of the greenback?) and into the "other" currencies. Technicals also seemed to help too.
The dollar lost the most vs the CAD despite the much worse deficit figures out of Canada (but oil rose) and the GBP (+0.57%). The greenback rose the least vs the JPY (+0.26% in the snapshot) although the move was good enough to send the USDJPY outside the 54 pip narrow range that has confined the pair over the last 5-6 trading days.
The "other" currencies were mainly the CAD - which briefly fell below its 200 day MA at 1.3499 before rebounding back above (we currently trade at 1.3506 - just above the MA level as the day rolls to an end). The CAD was the strongest of the major currencies (see the rankings above). Higher oil seemed to help the pair (and technicals as well).
Another currency that benefited was the GBP. It was helped by Chancellor Sunaks unveiling of a 30 billion pound support package just before the NY open. Most of of the gains in the GBP were against the USD (+0.57%) and the JPY (+0.31%). It was marginally higher vs the EUR, CHF, AUD and NZD (and down vs the CAD).
The US treasury had a successful auction of 10 year notes with the yield coming in 1 BP below the WI level at the time of the auction. The bid to cover was at 2.62x vs the 6 month average of 2.46x. Dealers took only 19.7% which was well below the 27.0% 6 month average. When dealers take less, it is indicative of good external demand. The US treasury will complete the refunding for the week with the sale of $19B 30 year bonds tomorrow. US yields are ending the session higher with a steeper yield curve by a few basis points.
In other markets today:
- Spot gold is trading up $14.13 or 0.79% in $1809. The levels today the price the highest level in 9 years. Although some other markets are trading like there is no care in the world (like stocks), with gold trading at the highest levels since 2011 are flashing warning signals (flight to safety flows).
- WTI crude oil futures are trading up $0.26 or 0.64% at $40.88. The high price reached $41.08. The low extended to $40.30.
In the US stock market the broader market indices closed near session highs. The gains once again led by the NASDAQ index which rose by 1.44% and close at a record level of 10492.50. The S&P index up gains 0.78% to 3169.94. The and Dow industrial average gained 177.7 points or 0.68% at 26067.28.
The European shares today were not as fortunate. They closed near session lows with Spain's Ibex -1.62% and France's CAC -1.24%.
