Forex news for North American trade on January 8, 2020:
- US December non-farm payrolls -140K vs -37.5K expected
- Canada net change in employment -62.6K vs -37.5K estimate
- Fed's Clarida: Downside economic risks have diminished due to vaccine
- More from Clarida: Sees US GDP returning to pre-virus level in H2
- Biden says he will announce economic package Thursday worth 'trillions'
- Democratic Senator Manchin says 'absolutely not' to new round of $2000 stimulus (update)
- Manchin says he was misquoted
- Baker Hughes US oil rig count 275 vs 267 prior
- US November wholesale inventories 0.0% vs -0.1% expected
- US November consumer credit +$15.3B vs +9.0B expected
Market:
- Gold down $67 to $1846
- US 10-year note yield up 3.4 bps to 1.11%
- S&P 500 up 14 points to 3818
- WTI crude oil up $1.56 to $52.39
- USD leads, EUR lags
If you look at the FX ticker, it doesn't look like it was much of a day in the market:
The reality was that it was full of significant developments, twists and turns.
The jobs report was on the soft side and that weighed on the US dollar initially but it was mostly brushed aside because it came before the latest round of stimulus.
Things really got moving with some upbeat economic comments from Clarida that highlighted a less-dovish stance at the FOMC. That pushed yields higher and the dollar along with it. Still, it wasn't a strong, sustained bid as Clarida left enough caveats to make everyone confident no changes were coming this year to QE.
The fright in the market came in the afternoon on a report that Senator Joe Manchin would "absolutely not" support $2000 checks. He's a Democrat and they need every vote so the whole stimulus narrative came under pressure.
A short time later, his office disputed the report saying he was asked if checks were his first priority and he said "absolutely not" because it was fighting covid. That turned sentiment and then Biden said he was going to roll out a stimulus proposal worth "trillions" next week.
That brought the commodity currencies (in particular) back from underwater and provided a late lift for stocks to a new record high.