Forex news for North American trading on June 18, 2021:
- Bullard: Fed must remain 'nimble' on policy
- Fed's Kashkari: Fed funds should remain unchanged at least through 2023
- Baker Hughes US oil rig count 373 vs 365 prior
- ECB survey shows growth pace peaking in Q3
- NY Fed Q2 GDP Nowcast slips to 3.7% from 4.2%
- EU's Sefcovic says UK must show unwavering commitment in applying Northern Ireland protocol
- OPEC forecast US oil production to rise 500K to 1.2m bpd next year
- Canada May new house price index +1.4% m/m vs +1.9% prior
- China buys the soybeans dip
Markets:
- Gold down $9 to $1764
- US 10-year yields down 6.4 bps to 1.436%
- S&P 500 down 55 points to 4166
- WTI crude up 62-cents to $71.66
- JPY leads, NZD lags
Bullard set the tone with some hawkish comments just as New York trade was ramping up. The led to a fresh bid in the US dollar and a further flattener in bonds. The tone soured throughout the day and ended with an ugly equity market finish at the lows of the day and the worst weekly decline since February.
The extremes in FX came into the London close as the dollar was bid up strongly. USD/CAD hit a seven-week high at 1.2481 in a sharp 80 pip move before giving about half of that back.
Cable was soft as the delta variant continues to circulate and high new case numbers the past two days. Hospitalizations are rising as well, which is double trouble. Cable touched below 1.38 but held the May lows, which are just underneath -- at least for now.
The euro held up a bit better but traded down to 1.1848 before finding some modest bids later. There have been three days of aggressive selling and it might not be done yet. Greg had a closer look at the short term chart.
USD/JPY tried to run to the upside early but was pulled back in part due to falling yields. US 30s fell 7.8 bps and tested 2.00% which is the lowest since February. The pair rallied 30 pips to 110.48 before giving it all back and finished NY trade where it started.
Have a great weekend. Next week is shaping up to be a volatile one.
