Forex news for North American trading on September 11, 2020:
- US August CPI +1.3% y/y vs +1.2% expected
- Canada Q2 capacity utilization 70.3% vs 70.7% expected
- US August monthly budget deficit $200.1B vs $235.4B expected
- Baker Hughes US oil rig count 180 vs 181 prior
- ECB's Schnabel: Our measures are having the desired effect
- Canada Q2 capacity utilization 70.3% vs 70.7% expected
- CFTC Commitment of Traders: No fear from cable longs
Markets:
- S&P 500 up 2 points to 3340
- US 10-yaer yields down 1 bps to 0.67%
- Gold down $4 to $1941
- WTI crude oil up 2 cents to $37.31
- AUD leads, GBP lags
The CPI report was largely driven by a jump in used car prices but the effect on markets was small. Counter-intuitively, Treasury yields declined on the report but that might have been more of a risk aversion trade, even if the timing was odd.
It was stock markets that were in charge overall. The early tone was positive but it only lasted 30 minutes before sentiment began to deteriorate. The weekly low held for a time and then gave way. Despite some adversity the dip buyers stepped in to salvage a small win in an otherwise bad week.
Commodity currencies tracked the move in the risk trade. The loonie was the underperformer in the group. It rose above 1.32 and last week's high for a time before tracking back below.
The main focus continues to be cable. A break to 1.2865 early in Europe and again early in New York was soundly beaten back below 1.2800 but the European low held. There is some support nearby but bullish hopes likely rest on a change in tactics from BoJo on the weekend.
The euro consolidated within Thursday's range and few of the ECB comments had any effect.
Have a great weekend.
