Trade trumps durable goods orders data
FX Trader, Loonieviews.net
The US dollar is bid. It stayed that way despite a mixed US durable goods orders report, a rise in US wholesale inventories for May and a big drop in MBA mortgage applications data. That’s because traders have trade on their minds. The headline durable goods number of -0.6% was better than the -1.0% that was forecast.
The White House appears to have backtracked on a plan to bar Chinese companies from investing in US technology firms, first reported on Sunday. They are now planning to use changes in the Committee of Foreign Investments in the United States to review investment decisions.
Wall Street liked the change in tone. The Dow Jones Industrial average opened above yesterday’s closing rate of 24,252.80 and climbed to 24,380.54 in early trading. The S&P 500 traded as high as 2732.91 after closing at 2717.07. Prices are still well below the month’s peak levels.
WTI oil prices jumped to $71.85/barrel after opening this morning at $71.15/barrel. Traders are expecting that today’s Energy Information Administration weekly crude oil stocks change data will report a similar drawdown as the American Petroleum Institute’s report showed yesterday afternoon, (-9.228 million barrels).
USDCAD retreated from its intraday peak of 1.3325 and is hovering around support in the 1.3280-90 area. Traders are patiently waiting to hear from Bank of Canada governor Stephen Poloz, who is holding a press conference after a speech in Victoria B.C. It is slated for 2000-2030 GMT.
EURUSD dipped to 1.1552 after opening in New York at 1.1648. The modest improvement in the headline durable goods number contributed to the slide. This morning’s break below the intraday uptrend at 1.1640 argues for a steeper drop to 1.1510 if 1.1580 gives way.
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.