Forex news for North American trade on September 9, 2021:
- ECB leaves key rates unchanged but tapers QE
- Lagarde opening statement: Current inflation increase largely temporary
- Lagarde Q&A: We are re-calibrating PEPP, not tapering
- ECB boosts 2021 inflation forecast to 2.2% from 1.9%
- ECB boosts 2021 GDP forecast to 5.0% from 4.6%
- Sources: ECB policymakers agreed on PEPP monthly purchase target
- BOC's Macklem: Timing of taper will depend on economic developments
- US initial jobless claims 310K vs 344K estimate
- Fed's Bowman: It's likely appropriate to begin tapering this year if the data come in as expected
- US sells 30-year bonds at 1.910% vs 1.928% WI
- EIA US weekly oil inventories -1529K vs -4612K expected
- Oil falls in delayed reaction after China taps strategic reserves
- Feds Williams does not comment on Fed policy or the economy
Markets:
- Gold up $5 to $1795
- US 10-year yields down 3.8 bps to 1.30%
- WTI crude oil down $1.20 to $68.08
- S&P 500 down 19 points to 4494
- CHF leads, AUD lags
The move in the euro lower came after Lagarde characterized the taper as a 're-calibration' and emphasized that they have 'other tools' to keep financial conditions easy (namely the APP) in March when the program runs off.
Later, the euro rebounded as the dollar slumped, in part due to the very strong bond auction. Later in the day though, some risk aversion kicked in and the dollar got a second wind.
The Canadian dollar strengthened after Macklem didn't offer any real hint that delaying the planned late-October taper was off the board. He certainly kept it as an option, pointing to economic data but said the baseline was still an H2 acceleration. USD/CAD dropped as low as 1.2622 but was jarred around but several whipsaws in oil prices.
Cable was perky once again and finishes the day neck-and-neck with the yen as the top performer. It's been a lively trade this week, dropping Tuesday, reversing intraday yesterday and getting back to square one today.
