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Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Trader Strategy
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NY Open: Wall Street soars as dollar digs in
Michael O’Neill
FX Trader, Loonieviews.net
Summary: Wall Street opened in a jubilant mood today but the dollar is flagging on some poor PPI and manufacturing data; the majority of the US' first-tier data releases have been postponed due to the government shutdown.
“Data delayed is data denied.” Fundamental traders will find it difficult to analyse the US economy because the government shutdown is delaying economic releases from the Bureau of Economic Analysis and the Census Bureau. Wednesday’s release of TIC, Retail Sales, and Business Inventories data are being postponed.
Second-tier data in the form of US PPI and the Empire Manufacturing Index were released this morning. Both were below expectations and helped to put a floor under the US dollar.
FX markets have been somewhat “noisy” but ultimately directionless in early New York trading. The US dollar drifted lower in early trading and then reversed the move after the US data was released. Trading activity is just “marking time” until the result of the UK parliamentary vote is known, which will be after 19Æ00 GMT.
The GBPUSD downtrend line from April comes into play at 1.3050 today on a daily chart, while the uptrend line from the December low (ignoring the January flash crash noise) is at 1.2650. Arguably, positioning makes a spike to 1.3050 more likely than a drop to 1.2650, especially since the risk is for an adverse outcome.
Wall Street is trading higher led by a 1.39% rally in the NASDAQ, as of 1400 GMT, thanks in part, to the China stimulus news and the improved prospects for a US/China trade deal. The DJIA is the laggard, rising only 0.52%, weighed down by disappointing bank earnings.
JP Morgan (JPM: NYSE) said that fourth-quarter profits rose 67%. Traders were disappointed. Earnings per share were $1.98 instead of the $2.20 predicted by analysts. Wells Fargo (WFC: NYSE) beat Q4 profit estimates, earning $1.21/per share (versus a forecasted $1.19) but revenue was below expectations. Both stocks are down over 1.3% in New York trading.
It got more expensive to “Netflix and chill” after the video streaming giant announced it was raising prices for all its subscription plans. The most popular package jumped 18.2% from $11.00 to $13.00/month in an effort to finance original shows.
Second-tier data in the form of US PPI and the Empire Manufacturing Index were released this morning. Both were below expectations and helped to put a floor under the US dollar.
FX markets have been somewhat “noisy” but ultimately directionless in early New York trading. The US dollar drifted lower in early trading and then reversed the move after the US data was released. Trading activity is just “marking time” until the result of the UK parliamentary vote is known, which will be after 19Æ00 GMT.
The GBPUSD downtrend line from April comes into play at 1.3050 today on a daily chart, while the uptrend line from the December low (ignoring the January flash crash noise) is at 1.2650. Arguably, positioning makes a spike to 1.3050 more likely than a drop to 1.2650, especially since the risk is for an adverse outcome.
Wall Street is trading higher led by a 1.39% rally in the NASDAQ, as of 1400 GMT, thanks in part, to the China stimulus news and the improved prospects for a US/China trade deal. The DJIA is the laggard, rising only 0.52%, weighed down by disappointing bank earnings.
JP Morgan (JPM: NYSE) said that fourth-quarter profits rose 67%. Traders were disappointed. Earnings per share were $1.98 instead of the $2.20 predicted by analysts. Wells Fargo (WFC: NYSE) beat Q4 profit estimates, earning $1.21/per share (versus a forecasted $1.19) but revenue was below expectations. Both stocks are down over 1.3% in New York trading.
It got more expensive to “Netflix and chill” after the video streaming giant announced it was raising prices for all its subscription plans. The most popular package jumped 18.2% from $11.00 to $13.00/month in an effort to finance original shows.
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