Forex news for North American trade on April 30, 2021:
- US March core PCE +1.8% y/y vs +1.8% expected
- Canada GDP for February 0.4% versus 0.5% estimate
- UK study warns on covid variant risks for people who have only had one vaccine dose
- A closer look at the study on covid risks due to variants after a single vaccine dose
- US UMich final April consumer sentiment 88.3 vs 87.5 expected
- Baker Hughes oil rig count comes in at 342 versus 343 last week
- Atlanta Fed GDPNow tracker for Q2 starts at 10.4%
- NY Fed GDPNowcast for Q2 climbs to 5.28% from 4.57%
- Fed's Kaplan says risk to his 6.5% GDP growth forecast this year is to the upside
- Canada March industrial product price +1.6% m/m vs +1.6% expected
- US Q1 employment cost index +0.9 vs +0.7% expected
- CFTC Commitments of Traders: The slow CAD courtship continues
Markets:
- Gold down $3 to $1769
- US 10-year yields down 1 bps to 1.62%
- S&P 500 down 30 points to 4181
- WTI crude oil down $1.43 to $63.58
- USD leads, NZD lags
The US dollar was strong particularly against the euro, sterling and antipodeans. Consider this a bit of a 'choose your own adventure'. If you want a fundamental underpinning, there was a definite pickup in risk aversion immediately after a study showing that one vaccine dose isn't a great protector against covid variants. Looking deeper into the study, that might be premature, but it could delay the recovery and reopening so it's something to watch.
The other 'adventure' may simply be the calendar. It's the final day of the month and that means flow driven trade is part of the landscape. That was abundantly clear in EUR and GBP into the London fix as they plunged. There's also a natural inclination to rebalance out of stocks after a strong month.
All told, there were some hefty negative candles in GBP, EUR and NZD but the loonie generally held its own, in part due to the GDP report showing Canada's economy is only 2.2% below pre-pandemic levels.
Have a great weekend.
