There were no major economic releases in the US today. The only release was wholesale sales for September which were stronger than expected at 2.2% vs 0.8%. That should be a boost to an already strong 3rd quarter.
There was hope that Fed Chair Powell and Fed Governor Williams would provide some catalyst for the market say, but each chose not to talk about the economy or policy at their respective speaking engagements today. Fed’s Powell will have another shot at it tomorrow when he is scheduled to speak on a panel discussion titled “Monetary challenges in a global economy”. There is more hope for views at that time (2 PM ET).
In the Forex, the EUR is ending the day as the strongest of the major currencies. The AUD is the weakest. The USD is ending mostly higher after 2-days as the strongest of the major currencies.
The EUR is the strongest and the AUD is the weakest
The JPY is weaker as well today. The USDJPY rose 0.45% on the day and in the process extended to and through the 151.00 level. Recall that the price of the USDJPY was trading right around the 151.00 level prior to the FOMC rate decision last Wednesday. Seven days later (5 trading days), the price returned to that level after tumbling to a low of 149.18 on Friday. The price high reached 151.052 and is trading at 150.99 as I type. In the US session today, the low reached just below support at 150.74 (low reached 150.72). Traders who are bullish on the USDJPY will eye that area has a close risk level in the new trading day.
The EURUSD dipped below 38.2% of the move up from last week’s low to the high on Monday at 1.0664, but like the USDJPY, the break did not last long, and buyers reenteed. The push higher took the pair back above the 100-hour MA at 1.06934, and that level will be a close risk for buyers going into the new trading day.
The GBPUSD moved up to tests it’s 100 hour MA and stalled (see post here).
The USDCAD moved higher for the 3rd consecutive helped also by lower oil prices. The price of oil are lower by another -2.26%. For the USDCAD, it traded above and below it 200 hour moving average at 1.37868 for part of the North American session before running to the upside toward the next target near 1.3813 (see post here). That is where the price stalled. Going into the close, the pair is back down toward it 200 hour moving average at 1.37868
The Bank of Canada replaced its meeting minutes today. Key points showed:
- Members of the governing council were divided on whether interest rates needed to be increased again.
- Some members believed it was likely that the overnight rate would need to rise further.
- Others thought that a 5% rate would be sufficient to bring inflation back to the target.
- There was a strong consensus to exercise patience in light of increasing evidence of falling inflation.
- The need for a rate hike would be revisited in future decisions after more data became available.
- Concerns were raised about the lack of downward momentum in underlying inflation, suggesting more time might be needed or that the policy was not sufficiently restrictive.
- Overall, the council agreed that inflationary risks had increased due to persistence in core inflation, elevated expectations, wage growth, and unusual corporate pricing behavior, indicating the possibility of high inflation becoming entrenched.
In the US stock market today, the broader S&P and NASDAQ indices continued their winning streaks with modest gains today. The S&P is now up 8 consecutive days while the NASDAQ index is up 9 consecutive days. The Dow industrial average snapped its 7 day streak higher with a modest decline. The final numbers are showing:
- Dow industrial average fell -40.33 points or -0.12% at 34112.28
- S&P index rose 4.42 points or 0.10% at 4382.79
- NASDAQ index rose 10.55 points or 0.08% at 13650.40
European indices close mostly higher.
In the US debt market yields are mixed with a shorter end up modestly while the longer end experienced sharp declines:
- 2-year yield 4.936% +1.8 basis points
- 5-year yield 4.506%, -3.2 basis points
- 10-year yield 4.492%, -7.9 basis points
- 30-year yield 4.609%, -12.3 basis points
Thank you for your support. Good fortune in your trading.
