Forex news for NY traders on April 9, 2018.
- US stocks give up gains. Close closer to session lows.
- FBI raids the office of President Trump's personal lawyer Michael Cohen
- Here is what’s on the economic calendar in Asia today (China's President Xi speaking)
- Analyst warns that Canadian credit quality beginning to deteriorate
- New Zealand dollar looks to make a break
- EURUSD continues consolidation at higher levels
- Mexican minister: NAFTA deal in principle for May is a possibility
- Crude oil and brent crude futures settle higher
- White House says Trump still wants to withdraw troops from Syria
- Bitcoin back below MAs after weekend rally fizzles
- The US deficit is about to get bigger even as growth jumps
- Ray Dalio: The odds of trade and other wars have risen
- ECB Coeure says he doesn't think growth in eurozone is slowing
- ECB's Praet: Inflation developments remain subdued
- Trump is throwing some barbs at Putin today
- Audio recap: Euro gets boost from upbeat Draghi
- IMF points to automation as a driver for fall in labor force participation
- Trump promises farmers won't be hurt in trade war
- European stocks open with unchanged to modest gains in the new trading week
- NY Fed 1Y inflation expectations edge lower to 2.75% in March from 2.83%
- Bank of Canada business outlook survey sees overall improvement in future sales
- Kudlow on CNBC: Trump raising China issue in full view
- Floyd Mayweather may come to regret foray into crypto as regulators close in
- More from Constancio: ECB should be cautious that early restrictive policy derails inflation recovery
- ECB's Draghi confident inflation will rise but sees uncertainty over the degree of economic slack
- Canadian dollar shrugs off NAFTA and pipeline headlines
- The NZD is the strongest the AUD is the weakest as the trading week begins for NA traders
A snapshot of other markets near the end of day is showing:
- Spot gold up $2.87 at $1336. The precious metal traded lower and higher with the USD and is closing higher on the weaker greenback.
- WTI crude oil also moved higher today. Syria/Russia helped to support oil today. The contract is trading up $1.27 at $63.32
- Bitcoin gave up weekend gains and is trading down -$315 at $6642.The low from April at $6450 is eyed.
In the US debt market, yields are ending mixed. The yields- like the US stocks - were higher, but gave up much of those gains.
- 2 year, 2.276%, up 1.0 bps. It was as high as 2.294%
- 5 year, 2.594%, up 0.8 bp. The high reached 2.621%
- 10 year 2.777%, up -0.3 bp. The high reached 2.81%
- 30 year 3.01%, down -0.7%. The high reached 3.0512%
The USD was mixed at the sessions opening with the pair down vs. the EUR, GBP, CHF and NZD but up against the JPY, CAD (well was unchanged), and AUD. This was the snapshot at the start of the NY session.
*Snapshot of % changes for the major currencies vs each other at the start of the NA session.
By the end of the day, the dollar had turned lower, with the greenback being the weakest of the majors (see chart below)
*Snapshot of % changes for the major currencies vs each other at the end of the NA session.
What were some of the catalysts for the decline?
- The EURUSD moved higher (lower USD) on comments from Draghi/ECB that they expected "the pace of economic expansion to remain strong in 2018" and that they "remain confident that inflation will converge towards our aim over the medium term" They did hedge a little by saying "there are still uncertainties about the degree of slack in the economy" , but the comment helped to send the EURUSD higher (and the USD lower).
- The USDCAD moved lower on more favourable NAFTA comments from WH's Kudlow and Trump. It may not be in April, but hope is that by May, there will be a new agreement (which is better than no deal for the CAD).
- The USDJPY lost ground later in the day as stocks gave up gains. There was a late day report that the FBI raided the Pres. personal attorney Michael Cohen and that helped to weaken stocks into the close, send a bid into the treasuries (lower yields), and in turn the USDJPY lower. Technical selling on a break of the 100 hour MA also weakened the USDJPY (at 106.91). The pair bottomed against the 200 hour MA at 106.607 (see chart below)
- The dollar lost ground (or more ground) vs. all the major currencies in the NY session.
The markets - including the stocks, bonds, metals and forex - continue to be influenced by more from headlines from Washington (NAFTA, China, Trump, and even Russia/Syria now). Admittedly, there was no economic news today. So that can be blamed partly for the sensitivity to those headlines.
However, there is the economy too. It is just taking a back seat to the other stuff out of Washington at the moment, and it is hard to see is fading away any time soon.
Nevertheless, later in the week, the stock market will get some focus back on earnings when JP Morgan and Citigroup report earnings (on Friday). For the economy, US PPI and CPI will be released on Tuesday and Wednesday. So focus will be back - maybe temporarily - on the inflation trends.
