Session close (Wednesday, March 7): Unchanged
Fundamentals: All things considered, the euro reacted in a very quiet manner to today’s news. A strong read on private ADP Payrolls along with better than expected Nonfarm Productivity and Unit Labor Costs supported the dollar this morning. However, as we discussed on today’s Morning Express last night’s Fed speak was drowned out by the resignation of Gary Cohn. While the dollar initially weakened on the Cohn news, comments from Fed Governor Brainard stabilized the trade; “headwinds are shifting to tailwinds” and this could speed up the path of rate hikes.
Atlanta Fed’s Bostic said today that he is in more of a wait and see position when it comes to trade policy developments. He is known as a dove but eluded to the economy warranting two to four hikes this year. The Fed released their Beige Book this afternoon and signaled a broad but moderate rise in wages and inflation. The quieter session comes ahead of tomorrow morning’s ECB policy decision at 6:45 am CT. Mario Draghi will follow with a press conference at 7:30 am CT. The ECB is likely to be upbeat about economic conditions but uncertainty surrounding U.S trade policy might hold them back from a more hawkish tone otherwise.
Technicals: The Euro spiked to a session high early this morning of 1.24615 but spent literally no time above 1.2440 as price action was met with strong key resistance at... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Session close: Settled about .94345, up 13.5 ticks
Fundamentals: An exuberant open last night in the yen unfolded much different. Equity markets stabilized early in the evening and the S&P covered its gap within an hour of the cash open. The yen traded lower as equities strengthened into the close on the announcement that the tariffs will be signed by the White House this week but there will be carveouts for Mexico and Canada as well as countries on a case by case basis. While a strong equity market can combat strength in the Yen, we have remained bullish both, so this news does not concern us much. The next 24 hours will be crucial, and traders must manage risk. It is also important to remember that price action has stayed contained below major four-star resistance. GDP data is due out of Japan tonight at 5:50 pm CT while the Bank of Japan meets tomorrow.
Technicals: While long-term technicals remain extremely positive, the short-term trade is seeming to run out of steam against major four-star resistance.
Session close: Unchanged
Fundamentals: The Aussie gapped lower on the open last night due to the risk-off trade on the Cohn news. GDP data missed expectations by one-tenth both YoY and QoQ, but last quarters read was revised higher; the news was somewhat neutral. As equity markets recovered, so did the Aussie and it would seem that buyers are defending the lowest level since December. The currency will be dependent on data tonight that includes Aussie Trade Balance at 6:30 pm CT and China Trade Balance due around midnight.
Technicals: Price action is trading firmly just above major three-star resistance, this is key because this should ultimately break the immediate term downtrend... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels
Session close: Finished electronic session unchanged
Fundamentals: The Canadian traded lower on the Bank of Canada at 9:00 am CT. They were not expected to change policy due to the recent slowdown in economic data. However, they cited “trade policy developments as an important and growing source of uncertainty for the global and Canadian outlooks.” The Canadian lost 0.5% and traded to a half a tick higher than the recent low of .76925. Things did take a positive turn this afternoon though and the Canadian made it back to unchanged on news that Mexico and Canada will get exemptions under the trade tariffs which are expected to be signed as early as tomorrow. New Housing Price Index is due tomorrow at 7:30 am CT. BoC Governor Poloz speaks at 10:00 am CT and Council Member Lane at 2:35 pm CT.
Technicals: Today’s price action is the first positive development for the Canadian in quite some time... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels