Forexlive Americas FX news wrap: One more day until Powell testimony
Forex news for NY trading on July 9, 2019
- Nasdaq/S&P snap two day losing streak
- Oil - private inventory data shows larger than expected draw in headline stocks
- Fed's Bostic: Fed is debating the merits and risks of running a hot labor market
- UK PM contender Johnson: We must prepair to leave EU without a deal
- UK lawmakers vote in favor of no-deal Brexit protection
- Crude oil futures settle at $57.83
- US Lighthizer/Mnuchin spoke with China's Vice Premier Liu He today
- The market will be looking for Powell to give what it wants....a cut confirmation tomorrow
- Mexico Pres names Deputy finance Minister Herrera as new finance minister
- US sells $38B of 3-year notes at 1.857%. WI at auction time 1.858%
- Trump: Qatar has agreed to buy Boeing planes.
- Mexico's FM Urzua resigns
- European shares end mostly in the red
- More Lane: Our goal is not to make markets happy
- Some of the comments from ECB Lane's twitter Q&A
- Fed's Harker: No need for interest rate changes
- JOLT job openings for May 7.323M vs 7.473M estimate
- Geopolitical: Germany, France, Britain, and EU concerned about Iran's nuclear steps
- More Kudlow: US-China call this week will be followed by in-person meetings
- US Commerce Secretary Ross: Huawei remains on entity list
- Powell does not comment on monetary policy or the economy in opening remarks
- Canada building permits for May -13.0% vs -10.0% estimate
- Feds Kudlow: Fed should look at price indicators not job indicators
- The CHF is the strongest and the AUD is the weakest as NA traders enter for the day
- Canada housing starts for June 245.7K vs 208.6K estimate
In other markets:
- Spot gold $1397.61, up $2.08 on the day
- WTI crude oil
In the US stock market:
- S&P index rose 0.12%
- Nasdaq rose 0.54%
- Dow fell -0.08%
Below are the %changes and high/low % changes for the major European indices. In Europe, major indices closed lower. In the US, the Nasdaq and S&P snapped a two-day decline and closed higher. The Dow extended its losing streak to 3 days. All of the US indices closed near the highs for the day.
In the US debt market yields were higher with the 5 year up the most on the day (up 2.3 bps).
IN the forex market, the CHF and USD were the strongest of the major currencies, while the AUD and the GBP were the weakest. Most of the gains for the USD were against the AUD (which trended lower the whole day) and the GBP (concerns about growth and Brexit).
Once again, the data was on the light side in the US today. The one economic release was the JOLTs job openings (and hires, and separations, etc) were released. They were lower than expectations BUT they still remain elevated. Morevoer, job openiings have a comfortable gap above hires suggesting the demand for workers is outstripping the supply (or qualifications). ON the back of the better jobs report from Friday, the report today is still showing strength even thought it was weaker than expectations.
There were plenty of Fed speaker today, but most kept quiet on the economic and monetary policy front.
Fed's Bullard gave opening remarks at a conference but other than that kept quiet - which is very unusual. He is typically open to chatting with reporters, but not today.
Fed's Quarles kept to the topic of stress tests.
Fed's Bostic was involved in a casual chit chat speaking engagement (no prepared text) but did not say much.
The one Fed member who did say something worth while was Fed's Harker, who in a WSJ article said there is "no need for interest rate changes". He did balance that out by saying "he did not think it would be a mistake to cut rates but says the prudent path for me is to hold steady and see how the economy evolves".
Harker is a non-voting member but it puts into question what Chair Powell will say when he travels to Capitol Hill tomorrow to give the first of two testimonies to the two chambers of Congress. Tomorrow, it will be in front of members from the House of Representatives (at 10 AM ET). On Thursday, he will be in front of Senators.
The market is expecting similar commnets made after the last FOMC decision on June 19 and during another speaking engagment on June 25th. At that event, Powell said, "an ounce of prevention is worth a pound of cure". That implies the Fed will take back the 25 basis point increase from December.
However, will Powell keep that same tone? Will he be swayed by the strong jobs market? Does he think inflation is likely to stay controlled, or will he return to the transitory mindset from two meetings ago?
We know the market is betting he will signal a cut. However, we still have to hear it.
From there, the focus will shift to "is there another". That is what the market will be searching for in his comments.
We will all know more tomorrow at about 10 AM ET. Until then, the market is likely to do a lot of what it did today...Back and forth price action.