Forex news for NY trading on July 9, 2020.
- Biden: Now is the time to build a new American economy
- WTI crude oil futures settle at $39.62
- CDC coronavirus statistics 991 new deaths vs. 932 yesterday
- Miami-Dade coronavirus statistics not good today
- US treasury auctions off $19 billion of 30 year bonds at 1.3300%
- Major European indices end the day lower
- Arizona case count rises 3.7% which equals 7 day average
- Dr Fauci: Hopes to have vaccine by end of calendar year beginning of 2021
- Trump on Supreme Court decisions: This is all a political prosecution
- Florida cases rise by 4% vs. previous 7 day average of 5%
- US Supreme Court: House can't get Trump's financial records
- Supreme Court: New York grand jury can get Trump's financial records
- US Treasury Secretary Mnuchin speaking on CNBC: Trump administration focused on jobs
- US wholesale inventories for May (F) -1.2% vs. -1.2% estimate
- New York reports 584 new coronavirus cases. Only a 0.1% gain
- US weekly jobless claims 1314K vs 1375K expected
- Canada June housing starts 211.7K vs 195.0K expected
- The GBP is the strongest and the JPY is the weakest as NA traders enter for the day
The dollar moved higher today as stocks were a wobbly despite the Nasdaq trading to yet another new record level. The S&P and Dow did not do as well as each declined on the day.
Some concerns about coronavirus numbers contributed to the worry. The CDC reported a near 29% increase in the number of cases. The number of deaths rose by 6.3%.
Later in the session, presidential candidate Biden outline some of his economic plan, and sounded a bit more Berniie Sanders/Elizabeth Warren vs. a more centrist Democrat ("ending the era of shareholder capitalism" was a specific comment that helped to send stocks lower).
Although Biden holds a large lead vs. Trump, there is plenty of time left until the election. Keep in mind that should Biden falter, and Trump coming from behind with incentive to keep the stock market buoyant, the declines may still be limited.
Another indication of the worry in the market comes from the debt market which saw heavy demand in the auction of 30 year debt today. The WI at auction time was trading at 1.357%. The high yield came in well below that level at 1.33%. The 30 year yield ended up moving even further lower to 1.308% near the close. That was down -9.1 basis points on the day. The 10 year yield was also lower by -5.7 basis points and the 5 year yield is closing near a record low at 0.279% currently.
Ranking the major currencies from the strongest to the weakest, the JPY and the USD are ending the day as strongest. The NZD and the AUD are the weakest (risk off type flows).
Crude oil prices tumbled by $1.41 or 3.45% to $39.49. The fall was attributed to economic concerns from coronavirus mainly. Recall also from yesterday that the inventory data showed a much higher than expected build in inventories (over 5 million barrels). Prices move higher yesterday but lost the traction today.
Not showing flight to safety characteristics was gold today. It seems to be out of sync a bit. Earlier in the week when stocks were rising with risk on flows, the price of gold was also rising on safety flows. Today with some safety worries, trading lower. Go figure. The price of spot gold is currently trading down $5.26 or -0.29% to $1803.64. The high price extended to $1816.15. The low price fell to $1795.74.
On the economic front during the New York session, the initial claims continue to show sharp increases. The number of claims came in at 1314K. Although it was less than the expected 1375K, having numbers of that magnitude are still worrisome for the jobs market. The continuing claims were also a bit stronger than expected but still at a high 18062K level.
Some technical levels 2 high in the new trading day:
- USDCAD: The USDCAD surged to the upside after trying to move below its 200 day moving average at the 1.3500 level in the London session and failing. The price is currently trading at 1.35867. That is above its 200 hour moving average at 1.3577. Stay above that moving average and the buyers remain in control
- EURUSD: The EURUSD extended to the highest level since in the Asian session but after falling below a swing area between 1.1345 and 1.13527, buyers turned to sellers and push the price lower. The pair is currently trading at 1.1281. That is below its 100 hour moving average and 38.2% retracement of the move up from last week's low at 1.1299. Stay below that level (call it 1.1300) and the bears remain in control.
- GBPUSD: The GBP was the strongest of the majors at the start of the New York session but gave up some ground as the day progressed toward the close. For the GBPUSD, the pair got within about 20 pips of its 200 day moving average up but 1.2686 (the hi reached 1.2666). The fall to the downside however has held above the broken 61.8% retracement of the move down from the June 9th high at 1.25975. The swing hi from Tuesday at 1.25913, make the area between 1.22591 and 1.2597 as a bias defining level for both buyers and sellers in the new trading day. Move below is more bearish. Stay above is more bullish.
