Forex 4 minutes to read

NY Open: Not a happy start to new year...

Michael O’Neill

FX Trader, Loonieviews.net

Summary:  2019 has started off with a whimper as traders bemoan China data, economic growth fears, Brexit and a host of other woes.


Wall Street is grumpy. Those hoping that the December 31 stock market rally would continue on the first day of trading in the new year were sadly disappointed. The blame for today’s malaise rests on China’s shoulders. The weaker than expected Caixin Manufacturing report that suggests China’s economy is contracting triggered a wave of equity market selling across the globe and it continued in New York.

The Dow Jones Industrial Average (DJIA) opened at 23,058.61, down 1.15% from the December 31 close. The S&P 500 and Nasdaq suffered a similar fate. The China data is just another nail in the coffin of global economic growth expectations. 

Traders are also bearish on stocks because of fears of a prolonged US government shutdown and worries that Jerome Powell and the Federal Open Market Committee have misread the economic outlook. Concerns about a US economic slowdown received a modicum of support from this morning’s soft Markit Manufacturing PMI data. 

EURUSD is the biggest loser since New York opened, falling from 1.1436 to 1.1366. The move was driven by bearish technicals after the overnight failure to break above 1.1500, and bland Eurozone data. FX markets are still thin due to holidays and won’t get back to normal until Monday. GBPUSD tracked the euro lower. Price action is a coin-flip around Brexit headlines although the bias is negative as “no-Brexit deal” fears rise.

USDJPY has climbed from a New York low of 108.85 to 109.30, coinciding with a small rise in US Treasury yields, from 2.65% to 2.67%. The intraday USDJPY technicals are bearish while prices are below 109.70.

NZDUSD bounced from 0.6665 to 0.6678 after the GlobalDairyTrade auction results showed a 2.8% rise. USDCAD sank from 1.3635 to 1.3595 after WTI oil prices rebounded from the $44.3/barrel low to touch $44,40/b.

Liquidity is still poor due to extended year-end holiday breaks. Traders are also cautious ahead of Friday’s US nonfarm payrolls data.
 
Chart: EURUSD, 30 minute. Source: Saxo Bank
Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
3 Church Street, #30-00
Samsung Hub
Singapore 049483

All departments are available 08:30 to 17:30 Monday to Friday.

Singapore

Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.