Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Dollar disregards durable data
Michael O’Neill
FX Trader, Loonieviews.net
Summary: The dollar couldn't hold its Durable Goods gains, but it remains the heavyweight among the FX majors.
Today's Durable Goods data didn’t get the job done. Traders looking for a fresh bout of lasting dollar strength were sadly disappointed even though March Durable Goods Orders rose 2.7%, well above forecasts for a 0.8% gain. The US Census Bureau said it was the fourth gain in five months.
The US dollar inched higher in the immediate wake of the news but was unable to hang on the gains; as of 13:50 GMT, USD has lost ground against all the majors since the New York open. The 30,000 increase in the weekly jobless claims report tarnished the Durable Goods data and sparked a bout of profit-taking in FX.
As far as EURUSD goes, however, this morning’s post-data rally is merely a minor blip in the steep downtrend that began last week with the break below 1.1290. Soft Eurozone data and an uber-dovish European Central Bank stand in stark contrast to reasonably robust US data and a dovishly neutral Federal Reserve, keeping the focus on the downside.
USDCAD continues to ignore oil price swings and remains underpinned by the Bank of Canada’s latest dovish outlook.
Wall Street is trading on a mixed note. The DJIA and S&P 500 are down while the NASDAQ is slightly higher. Bill Gates' former company joined the trillion-dollar market cap club, albeit briefly. Microsoft (MSFT: Nasdaq) shares touched $131.37 after the company reported earnings of $1.14/share compared to expectations of $1.00. Prices have since dropped but are still up 3.90% from yesterday’s close.
The DJIA was weighed down by a 10.07% plunge in the shares of 3M (MMM: NYSE), where quarterly earnings were below forecasts. The company didn’t just cut its 2019 earnings forecast but also announced 2,000 employees would be laid off.
The US dollar inched higher in the immediate wake of the news but was unable to hang on the gains; as of 13:50 GMT, USD has lost ground against all the majors since the New York open. The 30,000 increase in the weekly jobless claims report tarnished the Durable Goods data and sparked a bout of profit-taking in FX.
As far as EURUSD goes, however, this morning’s post-data rally is merely a minor blip in the steep downtrend that began last week with the break below 1.1290. Soft Eurozone data and an uber-dovish European Central Bank stand in stark contrast to reasonably robust US data and a dovishly neutral Federal Reserve, keeping the focus on the downside.
USDCAD continues to ignore oil price swings and remains underpinned by the Bank of Canada’s latest dovish outlook.
Wall Street is trading on a mixed note. The DJIA and S&P 500 are down while the NASDAQ is slightly higher. Bill Gates' former company joined the trillion-dollar market cap club, albeit briefly. Microsoft (MSFT: Nasdaq) shares touched $131.37 after the company reported earnings of $1.14/share compared to expectations of $1.00. Prices have since dropped but are still up 3.90% from yesterday’s close.
The DJIA was weighed down by a 10.07% plunge in the shares of 3M (MMM: NYSE), where quarterly earnings were below forecasts. The company didn’t just cut its 2019 earnings forecast but also announced 2,000 employees would be laid off.
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