Forex news for North American trading on November 29, 2019:
- Gold up $8 to $1463
- WTI crude down $2.69 to $55.42
- Natural gas down 8.8%
- US 10-year yields up 1 bps to 1.77%
- S&P 500 down 13 points to 3141 in shortened session
- GBP leads on the day, CHF lags
- NZD leads on the month, AUD lags
US markets were thinned by thinned by the Thanksgiving holiday but it wasn’t necessarily quiet. What made it a particularly intriguing session was that it was holiday-thinned by also the final trading day of the month. That set up a an opportunity for fixing flows to take over and that’s exactly what happened.
Models anticipated USD softness into the fix but in the hours beforehand the dollar was strong enough to send the euro below the November low. However the fixing flows started about 30 minutes before 11 am ET and helped to spark a rally to 1.1020 from a low of 1.0981.
It was a similar story elsewhere as USD weakness boosted cable to 1.2933 from 1.2890. The attack in London had no effect on the currency but an earlier poll showing Labour momentum had hurt it.
The big market mover was a report saying that Russia may not be inclined to pre-announce an OPEC+ production cut and may instead want to wait until April to decide. Going into next week’s meeting an extension of 3-6 months was the bare minimum the market was expecting. Add in thin liquidity and WTI crude fell a whopping 4.6% to a low of $55.02 before bouncing to $55.42 late.
Despite the fall in oil, CAD finished flat on the day as the oil weakness was ignored, or at least balanced by USD-negative flows. Another factor was the GDP report. While the headlines matched estimates, the details of the report were strong (at least according to this guy).
Have a great weekend, the next two weeks are jam-packed so we’ll see you Monday.