Forex news for North American trading on October 5, 2020.
- Major US stock indices close near highs for the day
- Gasparino: Senate sources still say Senate approval doubtful
- The bond market is signaling that another round of US stimulus is coming
- Trump doctor: President has met or exceeded all discharge criteria
- Fed's Mester: Wants option to lengthen maturity of Fed QE buying
- Crude oil futures settle at $39.22
- Trump says he's leaving hospital. Says he feels better than he did 20 years ago
- Everything points to stimulus as the main factor, not Trump's health
- Mnuchin and Pelosi spoke for an hour by phone today
- European shares end the session higher
- White House press secretary tests positive for COVID
- Netherlands candidate Frank Elderson will replace Yves Mersch at the ECB
- Tropical storm Delta on a path to disrupt US gulf coast
- Fed's Evans: We must be 'in it to win it' to hit 2% inflation
- US Sept ISM services index 57.8 vs 56.2 expected
- Markit final Sept US services PMI 54.6 vs 54.6 prelim
- BOE's Haskel says stands ready to vote for more stimulus if needed
- The CHF is the strongest and the JPY is the weakest as NA traders enter for the day
The roadmap for "the markets" followed the hopes for more stimulus. Treasury Secretary Mnuchin and Pelosi talked and shared new plan ideas. There is another scheduled meeting tomorrow. Better US data in the form of ISM services also was a boost. Although Trumps leaving the hospital is not a reason to rally directly, with Trump well behind in the polls and less than a month left until the elections, he is likely to come out of Walter Reed swinging and that could easily include putting additional pressure on the GOP to get something done for his political life and that of the GOP majority in the Senate (even though a deal may lean more the Dem's way). There are two more debates ahead and Trump aides say they will oppose a "mute" button (I don't know if that is good or bad).
The action today, led to "risk on" flows:
- Yields moved higher with the 30 year up near 10 bps and the 10 year up 7.4 bps. A new stimulus deal being priced in and perhaps there is some yield concession ahead of the 3, 10 and 30 year auctions starting tomorrow.
- US stocks soared with the major indices closing at or near the session highs. The "risk on" was highlighted by not only the Nasdaq outpacing the S&P and Dow (2.32% vs 1.8% and 16.8% respectively), but the riskier small cap Russell 2000 out gained them all with a gain of 2.77%. Baby
- In the forex, the flow of funds were into currencies other than the safe haven JPY and USD. The USD and JPY started the session as the two weakest of the majors and saw that weakness get larger in the NY session.
- Gold prices moved higher as the dollar fell. The precious metal rose by $13.77 or 0.72% to $1913.61. The high for the day reached $1918.81 while the low extended to $1887.04. The price of silver also increased. It is trading up $0.62 or 2.61% at $24.36 near the close for the day.
- Crude oil futures rose and are hoping for a stimulus deal that would boost oil demand. The November WTI crude oil contract rose by $2.38 or 6.42% to $39.43 near the end of session.
From oil, to gold, to Forex, to stocks, to yields the flow of funds was into the risk today. Will that momentum now continue into the new trading day?