Forex news for North American trade on May 29, 2020:
- All Trump's announcements on China were rumored or reported. Market breathes a sign of relief
- US April personal spending -13.6% vs -12.8% expected
- Fed's Powell: At a time like this you're seeing how strong our powers can be
- May final U Mich consumer sentiment 72.3 vs 74.0 expected
- Baker Hughes US oil rig count 222 vs 237 prior
- SNB's Zurbruegg: We still have room to manoeuver on rates and FX intervention
- Fed's Mester: Yield curve control is a discussion for a future phase
- Canada Q1 GDP -8.2% vs -10.0% expected
- US advance goods trade balance for April $-69.7 billion vs. $-65.0 billion estimate
- US wholesale inventories for April (P) 0.4% vs. -0.7% estimate
- CFTC commitments of traders. JPY longs increase vs the USD in the current week
Markets:
- Gold up $14 to $1732
- WTI crude oil up $1.28 to $35.00
- US 10-year yields down 4.3 bps to 0.65%
- S&P 500 +0.5%
- AUD leads, NZD lags
The main event of the day was China and Trump's planned announcement to retaliate for the Hong Kong security law. That kept markets on edge and erased an early positive tone in risk assets.
As he began to speak and launched some tough talk, risk trades sagged but when it came time to deliver the US reaction, it was meek. All the announcements related to things that were leaked or rumored previously and stocks quickly rebounded along with commodity FX.
Earlier in the day it was all about flows. It was the final trading day of the month and there was a big bid in EUR/GBP and GBP/USD. The fixing demand arrived but sellers met it and both pairs sagged. Cable fell a full cent from the highs and as in negative territory on the day before a late bounce to a 16 pip daily gain.
The euro will close the week close to 1.1100 and that's comfortably above the key 1.1020 zone but off the 1.1145 session high.
When you check the broader rundown in the market there wasn't much to report in terms of daily moves in FX with most pairs finishing about 20 pips from starting levels. AUD had a bit more jam but the highs came early in Europe.
The gold and oil markets were more-lively as both were bid into month-end. Oil was quiet until the final hour of trading when a big bid came through ahead of the monthly fix. Gold rebounded for the second day then briefly dipped after Trump but was picked up again late.
