Forex news for forex trading on November 10, 2021
- US Trade RepTai said aims to hold China accountable to the 2-year Phase 1 trade deal
- Biden's calendar on Monday is filling up
- Bitcoin gives up its gains after reaching a new all-time record high
- China weighs easing property restrictions - report
- Evergrande met at least part of today's bond payment deadline
- US October budget deficit $165B vs $179B expected
- Reminder: The US bond market is closed tomorrow
- U.S. Treasury sells $25 billion of 30-year bonds at a high yield of 1.94%
- Rivian opens for trading at $106.75
- The Atlanta Fed GDPNow Q4 estimate 8.2% vs 8.5% last
- Brexit showdown ahead; staying bearish - MUFG
- European equity close: UK leads the rebound
- Fed's Daly says inflation is eye-popping but transitory
- Gold runs to highest high since June. Can the buyers keep the momentum going?
- EIA weekly US oil inventories +1001K vs +2125K expected
- Rising US Treasury yields drag USD/JPY higher
- US September wholesale inventories +1.4% vs +1.1% expected
- Sen Manchin raises alarms on inflation
- Biden: Reversing increase in inflation is a top priority for him
- US initial jobs claims 267K versus 257K estimate
- US October CPI +6.2% y/y vs +5.8% expected
- The USD is the strongest and the NZD is the weakest as NA traders enter for the day
- US MBA mortgage applications w.e. 5 November +5.5% vs -3.3% prior
Two key events were the big influences in the markets today.
First, the US CPI data came in much hotter than expectations with YoY headline inflation rising to 6.2%. This was much higher than the 5.8% estimate. The core CPI was also higher at 4.6% vs 4.3%. Inflation remains a problem. Fed's Daly - the only Fed official to speak today - did admit that the inflation is "eye-popping", but maintained that it will "be transitory" once the pandemic effects are behind us.
The second key event was the $25 billion 30 year bond auction at 1 PM ET. The WI level at the time of the auction was 1.888% (the WI or When-Issued yield is the yield trading in the market before the actual auction). The actual high yield from the bids entered came in 5.2 basis points higher at 1.940%. Moreover, the total number of bids were much less than the 6 month average. The domestic and international demand was lower than the recent averages. The "dealers" (the buyers of last resort) were straddled with 25.23% - well above the average of 17.3%.
The reaction saw yields move higher. Looking at the maturity spectrum, yields were up double digits across the board (see below) with the 5 year up 15.9 basis points and the 30 year up nearly 11 basis points.
Higher inflation. Higher yields.
That dual impact, sent the US dollar higher in reaction to expectations of tighter policy/more hawkish Fed. The USD is ending the day as the strongest of the major currencies while the GBP is the weakest.
- The GBPUSD fell -1.11% to a new low for the year (and lowest level since December 23, 2020). The price fell below the low from the US employment the day at 1.34236 and the low from Monday at 1.34493. The pair is trading just off it's low for the day at 1.3403 with the low reach 1.3400. If the price is able to stay below the 1.34236 old low for the year, that would be the best case scenario for the shorts. Alternative resistance comes in at 1.3449 low from Monday's trading.
- The EURUSD is also trading at new 2021 year lows and trading at it's lows for the day into the close. The price is currently trading at 1.1477. That as now taken the price below the 50% midpoint of the move up from the 2020 swing low to the January 2021 high. That midpoint comes in at 1.14892. In the new day, a long as the price can remain below the low from last Friday at 1.15125 and the lows from October at 1.15236, the sellers would hold the winning hand. Move back above those levels, and the advantage is lessened simply because of the failed breaks.
- For the USDJPY it cracked above both its 100 hour moving average at 113.33 and its 200 hour moving average at 113.653. The high price reached up to 114.008, where it ran into a topside downward sloping trendline connecting recent highs on the hourly chart
- The USDCHF also moved higher cracking above its 200 day moving average in the process at 0.91561. The pair moved up to a high of 0.9185 which was just short of its 100 day moving average at 0.91871. The price move below that moving average level back on October 28 and has not been above it since that day. Also near the 100 day moving average is the 38.2% retracement of the move down from the September 30 high. That level comes in at 0.91904. If the buyers are to take more control, getting back above those levels in the new trading day would be needed. Alternatively if the level can now hold resistance, there could be a rotation back to the downside with a move below the swing highs from October 29 and November 5 at 0.91754 and early clue (if the price can stay below that level).
In other markets:
- US stocks fell for the 2nd consecutive day with the interest rate sensitive NASDAQ and Russell 2000 faring the worst. The NASDAQ felt -1.66% to 15622.72. The Russell 2000 fell -37 points or -1.55% to 2389.582. The Dow lost 240 points or -0.66%. The S&P index fell -30.56 points or -0.82%.
- Spot gold rose $18 to $1849.68. That is near the middle of the range which saw the precious metal trade as low as $1822.49 and as high as $1868.57
- Spot silver rose $0.36 or 1.47% $24.63
- WTI crude oil fell -3 dollars or -3.52% and $81.19. It is closing near it's lows after reaching as high as $84.97
- The price of bitcoin initially moved to a new record high of $69,000, but gave up all the gains and is ending down nearly $2000 and $64,918.78.
