Forex news for NY trading on January 29, 2020
- Major indices give up most of the day's gains into the close
- Microsoft revenue, EPS beats
- The before and after the FOMC Powell press conference
- Fed Powell press conference highlights
- Powell highlights: Uncertainties remain. Expects inflation to move closer to 2% in coming months
- A comparison of the last two FOMC rate decisions
- The full FOMC statement for January 2020
- The FOMC keeps rates unchanged. Targets 1.5% to 1.75%.
- EU parliament backs Brexit deal
- European major indices close with gains
- Pres. Trump signs USMCA trade agreement on the White House lawn
- World Health Organization press briefing on coronavirus highlights
- DOE crude oil inventories 3548K versus 482K estimate
- China's top diplomat: China has confidence and ability to win battle against virus
- Bitcoin (on Coinbase) extends further above its 200 day moving average
- US pending home sales -4.9% versus +0.5% estimate
- Wholesale inventories for December (P) -0.1% versus +0.1% estimate
- US advance goods trade balance for December $-68.33 billion versus $-65.0 billion estimate
- Hubei Gov: Virus outbreak in Huanggang is especially severe
- The JPY is the strongest while the NZD is the weakest as NA traders enter for the day
A snapshot of other markets near the end of day is showing:
- Spot gold is trading up $10.39 or 0.66% at $1577.52. The high price extended to $1578.03. The low fell to $1563.48
- WTI crude oil futures fell $0.40 or -0.75% to $53.08. The weekly inventory data showed a surprise build. The high price extended to $54.37. The low fell to $52.81.
Early in session, the economic releases showed the US trade deficit rising by a larger than expected amount to $-68.33 billion versus $-65 billion estimate. Wholesale inventories for December were a touch weaker at -0.1% versus +0.1% estimate. The final piece of economic news today was in the form of US pending home sales for December which decline by a surprise -4.9% versus +0.5% estimates. The National Association of Realtors blamed low supply which forced prices higher and contributed toward pricing out new buyers despite lower rates, strong employment trends and rising earnings.
The focus turned to the FOMC decision at 2 PM ET/1900 GMT. The FOMC statement was nearly the same as in December. However the FOMC did call consumer growth moderate versus strong in the December report.
During the press conference, chair Powell spent a lot of time talking about the repo facility and the growing balance sheet saying that it would likely finish up by the end of the 2nd quarter, and that the bill buying was largely technical.
Other highlights from his press conference included:
- Phase 1 deal with China and USMCA is without question positive and should support the economy over time
- Trade policies uncertainty remains elevated
- There is a wait and see attitude for businesses on trade
- Does not yet see a decisive recovery for manufacturing
- Fed sees asset value valuations somewhat elevated, but not extreme
- Household that is in a good place
- Business debt is rising but not threatening stability
- Vulnerabilities to financial stability is moderate overall
The comment on asset valuations did helped to send the stocks down a little bit. Yields also fell and are closing near the low levels for the day.
By the end of the day, the major stock indices close mixed with the S&P and the Dow closing at or near session lows. Most of the earlier gains in the major indices were also erased by the close.
In after hours, Microsoft earnings beat expectations and rose. Facebook sold off after user base in the US only rose modestly. Tesla beat on the top and bottom line, and gave strong expectations for sales in 2020 (500K versus 468K estimate).
In the forex, the JPY is ending the session as the strongest of the major currencies The US dollar lost that distinction after the Fed decision but still closed higher versus all the major currencies with the exception of the JPY. The CAD is ending the day as the weakest. The USDCAD move back above its 100 day moving average at 1.31776 and extended up to a high price of 1.32088.
