Forexlive Americas FX news wrap: S&P win streak ends. Trade and earnings season weighs
Forex news for NY trading on Apirl 9, 2019
- ECB preview: There are two key issues facing Draghi
- Crude oil futures settle at $63.98
- Italy cuts 2020 GDP target to +0.8% from +1.1%
- Italy cuts 2019 GDP forecast to +0.2% from +1.0%
- Tusk: Possibility of flexible extension that lasts no longer than one year
- US sells $38 billion of 3 year notes at high yield 2.301%
- UK Labour: No clear shift in UK government Brexit position yet
- Draft of EU summit: EU to agree to Brexit delay
- UK lawmakers approve PM May's plan to seek delay to Brexit to June 30
- Downing St spokesman: Labour and Conservatives had productive talks, more coming
- US EIA raises 2019 and 2020 US oil production estimates
- European shares end the session with losses
- China Li: China to continue improving business environment
- Mueller report to be released "within a week"
- February US JOLTS job openings 7087K vs 7550K expected
- IMF cuts 2019 global growth outlook to 3.3% from 3.5%
- The AUD is the strongest and the CHF is the weakest as NA traders enter for the day
- Trump says 'will now put tariffs on $11 billion of EU products'
In other markets:
- Spot gold, rose $6.87 or 0.53% to $1304.35
- WTI crude oil futures fell $.31 or -0.50% to $64.09
Concerns about trade, lower IMF global growth forecasts and some apprehension ahead of earnings (bank/financials earnings will kickoff at the end of the week and into early next week), were blamed for the declines.
In the US debt market, the yields ended the session lower. The 10 year yield traded above and below the 2.500% level, reaching a low of 2.483%. The high yield reached 2.526% before settling between the two extremes at 2.5006%. The U.S. Treasury issued $38 billion of three-year notes at a high yield of 2.301%. The bid to cover was a little less than the average over the last 6 months. Overall, it was a middle of the road auction. Below are the ranges and changes for the benchmark issues.
The European benchmark 10 year yields were also lower. The German 10 year note closed back below the 0.00% level at -0.01%.
Economic releases and events were limited today. In the UK, the lawmakers passed PM May's plan to extend Brexit to June 30th. The EU, ahead of its EU Summit tomorrow, suggested it would prefer to extend the no-deal date further. They will debate and vote on that at their meeting tomorrow.
IN the US, the JOLTS job openings fell to 7087K vs 7581K last month and also below the 7550K expected. The openings was the lowest since March 2018 and is not great news for wage growth. Wages have already been struggling to move higher. If job openings start to move lower, that is not going to help the wage picture.
In other economic news, the IMF cut growth prospects for 2019 to 3.3% from 3.5% previously. That is the slows global growth forecast in a decade. They did keep 2020 GDP estimates unchanged at 3.6%. They cited Brexit and US-China trade. For specific countries, they now see eurozone growth at 1.3% versus 1.6%. They are pegging US growth at 2.3% versus 2.5% previously. They see China 2019 growth at 6.3% versus 6.2%, but cut 2020 to 6.1% from 6.3%.
In other countries:
- Germany 0.8% versus 1.3%
- Canada 1.5% versus 1.9%
- France 1.3% versus 1.5%
- Italy 0.1% versus 0.6%
- Latin America 1.4% versus 2.0%
- Advanced economies 1.8% versus 2.0%
- emerging markets 4.4% versus 4.5%
In the Forex market, the JPY is ending the session as the strongest, while the CAD is the weakest. The USD dollar is ending the day mixed with small gains versus the GBP, CHF and CAD +0.08% or less), small losses versus the AUD, NZD and EUR (-0.05% or less). Versus the JPY, the USD fell the most at -0.30%.
Some technical levels in play into the new trading day:
- The EURUSD moved up to the 38.2% of the move down from the March 20 hi to the April 2 low at 1.12842 and found leaning sellers. The prices is at its New York session lows at 1.12615. On further weakness eye the 1.12543 level. That was the high from last week. Yesterday that high was broken. Today the level was tested twice before moving higher. Holding support on a test, would be more bullish. A move below would have traders targeting the 100 hour moving average at 1.1240
- For the GBPUSD, earlier gains were erased in the NY session and the price closed lower on the day. The 100 and 200 hour MAs are converged and above the current price (of 1.30467) at 1.30806. A move above those MAs would be more bullish. ON continued weakness, the 1.3013, 1.3001 and 1.2974 levels are all targets. The 1.2974 is the 200 day MA. On March 29, then moving average was tested, held and bounced. On Friday, the price got within 13 pips of the MA before bouncing higher.
- The USDJPY had the 38.2% retracement at 111.007 and the 100 day moving average at 110.94. The low for the day reached 110.973 before wandering higher into the close (at 111.14). Above sits, the 200 hour MA at 111.291. Below is that 100 day MA at 110.93 today.
- For the NZDUSD, the high for the day stalled at the 100 hour MA. It currently comes in at 0.67496 (the price trades below it at 0.6740). A break above would be needed to tilt the bias more to the upside in the new day. Stay below, and the 200 day MAa at 0.6730 will be targeted.