Forexlive Americas FX news wrap. Oil prices soar. US PPI disappoints.
Forex news for NY trading on May 9th, 2018
- The US major indices finish with solid gains. S&P moves closer to key resistance.
- Sneak Peek: The BOE policy decision, the pound, and fickle markets
- US sells 10-year notes at 2.995% vs 2.995% WI bid
- Feds Bostic: Inflation to likely run above 2%
- How the US dollar rise weighs on emerging markets and cuts global growth
- Trump: Iran will negotiate or 'something will happen'
- European equity close: Italy climbs coalition hopes
- US 10-year yields hit 3% once again
- EIA weekly US oil inventories -2197K vs +1000K expected
- US March final wholesale inventories +0.3% vs +0.5% expected
- Goldman Sachs sees a possible $6 rise in oil prices this summer
- Canada March building permits M/M 3.1% vs 2.0% expected
- US April PPI +2.6% y/y vs +2.8% y/y expected
In other markets:
- Spot gold -$2.00 or -0.15% at $1312.50
- WTI crude oil up $2.19 or 3.17% at $71.25
- Bitcoin futures are trading up $55 at $9290
- S&P up 0.97%. Nasdaq up 1.00%. Dow up 0.75%
- 2 year yield 2.53% up 2.0 bps, 5 year yield 2.838%, up 2.4 bps. 10 year 3.004%, up 2.8bps
A day after the US announced the withdrawal from the Iran nuclear deal, the price of oil resumed it's run higher. The price of crude oil is trading up 3.17% at $71.25 and Brent oil trades up 3.22% at $77.26 in after hours trading. The markets remain concerned that sanctions will limit supply despite Saudi Arabias chatter today that they and OPEC/Non-OPEC, will supply enough to limit price shocks. Helping as well was a surprise drawdown of crude oil inventories (-2197K vs +1000K expected). In reality, the private data released yesterday hinted of the surprise. However, the number today was larger than the expectations from that release. Goldman Sachs sees a possible $6 in oil prices this summer
Fed's Bostic said that inflation could go above the 2% target for a while, but was concerned about tariffs and it's impact on business confidence and capital spending.
In other economic data today, the PPI in the US disappointed (2.6% vs 2.8% expected and ex food and energy 2.3% vs 2.4%). The pipeline prices were somewhat tame despite run up in commodity prices of late. Tomorrow, the US will release the more important CPI data.
In Canada building permits surprised to the upside at 3.1% vs 2.0% expected. The better data, higher oil prices and at technical break in the USDCAD, helped to push the CAD higher. The loonie was the strongest currency today - lapping the field in the process.
The JPY was the weakest currency.
The USD was neither stronger or weaker. It rose vs the JPY, CHF and EUR, was lower vs the CAD, and NZD and near unchanged vs the GBP and the AUD.
Stocks were not concerned about geopolitical issues. The major indices moved up by about 1%. The treasury auctioned off $25B of the bellweather 10 year notes at a smidge below 3%. It still was the highest auction yield in nearly 7 years.