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

Forex 4 minutes to read

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. This content is not intended to and does not change or expand on the execution-only service. 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)
- Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

International

Trade responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.