market:
- US 10-year bond yield fell 1.7bps to 3.91%
- Gold falls $17 to $2018
- S&P500 fell 0.2%
- WTI crude oil rose 17 cents to $71.75.
- CAD leads, EUR lags
This market had all the characteristics of a market attempting to regain entry into the New York trade. There has been a lot of movement since the FOMC, and that day was Friday. Everyone was waiting for some sort of pushback from Williams on Powell’s dovish remarks. It was enough for him to say, “We’re not really talking about rate cuts right now,” even if the full context of the statement was not materially different from Mr. Powell’s.
The dollar soared and stock prices regained some of their pre-market gains. The dollar gave back most of its moves over the next hour, but the S&P Global Services data was also solid, enough to sustain the bid, especially after eurozone economic data was weak again.
Although EUR/USD reached 1.10 yesterday, it failed to break above the November high of 1.1017 and ended the day down 97 pips following solid selling. Cable was flat heading into New York trading, but ultimately ended down 91 pips.
Elsewhere, the dollar rose a quarter of a cent against the yen in volatile trading, but was ultimately flat in the Antipodes, where the dollar was not strong. The Canadian dollar hit an all-time high, helped in part by Macklem’s hawkish comments.
Have a nice weekend.