Forex news for North American trading on June 9, 2021:
- Bank of Canada leaves QE at $3 billion per month
- Full statement from the Bank of Canada interest rate decision
- EU's Sefcovic says patience is wearing very thin on UK implementing withdrawal agreement
- Senior UK official: I think there are solutions out there on Irish border
- SEC's Gensler: Crypto regulatory oversight needs to be broadened
- U.S. Treasury auctioned off $38 billion of 10 year notes at a high yield of 1.497%
- US EIA weekly oil inventories -5241K vs -3500K expected
Markets:
- Gold down $4 to $1888
- US 10-year yields down 4.7 bps to 1.49%
- WTI crude oil down 32-cents to $69.73
- S&P 500 down 7 points to 4219
- CHF leads, GBP lags
The price action across markets was tough to square today. Early on yields began to fall, particularly in Treasuries. That was followed by a drop in the dollar and that certainly made some sense but from there it went off the rails.
US equities tried to go higher on lower yields, led by tech, but the traction never really materialized and it faded. Worse was in FX where the dollar quickly turned around and a 30-pip USD dip was completely reversed and more.
All the happened with yields remaining low. There was some small creep higher but a strong auction wiped all that out.
The pound was especially weak as Brexit drama resumed. There's a June 30 deadline on the temporary Irish border agreement and a deal doesn't appear to be close. The EU threatened tariffs and that took cable down 30 pips. I expect we'll be hearing more on that theme in the weeks ahead as a new round of (fake) brinkmanship is underway.
USD/CAD moved a handful of pips higher on the BOC decision. It was mostly as expected but there was some risk the BOC could offer a stronger hint on tapering in July. Instead they left it ambiguous. The pair strengthened on the broad USD bid and got some assistance from a dip in oil prices.
