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Market Moving News
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| Intra-day Market Moving News |
| 21 Feb 2020 |
15:15 |
USD/MAJORS... Reuters reported given low interest rates and low inflation that's less sensitive than in the past to changes in the labor market, the Federal Reserve will need to act proactively and aggressively to counter future downturns, Governor Lael Brainard said on Friday.
Brainard's call for strong action in response to a future shock were made in response to a research paper released Friday at the conference that argued that the unconventional monetary policies deployed during the last crisis had mixed results and could have been more effective had they been used more decisively.
Brainard said she supports adopting a strategy where the Fed would target a range of inflation outcomes that would allow it to achieve 2% on average overall, a strategy she calls flexible average inflation targeting.
And she also called, as have other Fed officials, for stronger fiscal responses in a downturn, since monetary policy alone will likely not be enough.
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| 21 Feb 2020 |
15:00 |
USD/MAJORS... Reuters reported U.S. home sales fell in January, but the constraint from tight supply could ease as building permits and the number of homes under construction at levels last seen nearly 13 years ago.
The National Association of Realtors said on Friday existing home sales declined 1.3% to a seasonally adjusted annual rate of 5.46 million units last month. December's sales pace was revised down to 5.53 million units from the previously reported 5.54 million units.
Economists polled by Reuters had forecast existing home sales falling 1.8% to a rate of 5.43 million units in January. Last month, existing home sales were unchanged in the Northeast and rose in the Midwest and the populous South. But sales tumbled in the West, the country's most expensive region.
Existing home sales, which make up about 90% of U.S. home sales, surged 9.6% on a year-on-year basis in January.
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| 21 Feb 2020 |
14:47 |
Continues from previous update...
The manufacturing sector barely escaped a slip into contraction, with the flash reading there at 50.8, the lowest since August and down from 51.9 in January. Economists had forecast a reading of 51.5, according to the Reuters poll.
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| 21 Feb 2020 |
14:46 |
USD/MAJORS... Reuters reported U.S. business activity in both the manufacturing and services sectors stalled in February as companies have grown increasingly concerned about the coronavirus, a survey of purchasing managers showed Friday.
The IHS Markit flash services sector Purchasing Managers' Index dropped to 49.4 this month, the lowest since October 2013 and signaling that a sector accounting for roughly two-thirds of the U.S. economy was in contraction for the first time since 2016.
Economists polled by Reuters had forecast a reading of 53, down slightly from January's final reading of 53.4. A reading below 50 indicates contraction.
The services sector new business index dropped to 49.7, the lowest since October 2009, from 52.5 last month.
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| 21 Feb 2020 |
13:55 |
USD/MAJORS... Reuters then reported the U.S. economy is set to grow at a 2.00% to 2.25% annualized rate this year and any disruption to activity from the coronavirus outbreak will be short-lived, Atlanta Federal Reserve Bank President Raphael Bostic said on Friday.
Speaking on CNBC, Bostic added that he believes the Fed's current policy stance, with its benchmark interest rate set in a range of 1.50% to 1.75% is appropriate and he has no impulse to "do anything" with it at this time.
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| 21 Feb 2020 |
13:39 |
USD/MAJORS... Reuters news, Fed's Bostic says :
- businesses tell him coronavirus to be short term disruption
- his models expect short-term hit but recovery after
- sees U.S. GDP at 2-2.25%
- has no impulse to do anything with our current policy stance
- bond market is reflecting low neutral rate of interest, flight to safety
- talks to a lot of bankers and they're not taking excessive risk
- does not think Fed's balance sheet actions are pumping up the stock market
- the economy is strong and can stand on its own feet and we should let it do that
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| 21 Feb 2020 |
13:38 |
USD/CAD - 1.3258... Reuters reported Canadian retail sales were unchanged in December from November at C$51.65 billion ($38.95 billion), as lower sales at motor vehicle and parts dealers offset gains at building material and garden supplies dealers, as well as food and beverage stores, Statistics Canada said on Friday.
Sales increased in seven of 11 subsectors, representing 49% of retail trade. In volume terms, retail sales were flat.
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| 21 Feb 2020 |
12:54 |
USD/MAJORS... Reuters news, in an interview with CNBC, Fed's Bullard adds :
- banks business models will evolve to handle the low interest rate environment
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| 21 Feb 2020 |
12:53 |
USD/MAJORS... Reuters then reported market expectations for a rate cut will fade as coronavirus fear eases, St. Louis Federal Reserve President James Bullard told CNBC on Friday.
"There's a high probability that the coronavirus will blow over as other viruses have, be a temporary shock and everything will come back," Bullard told CNBC.
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| 21 Feb 2020 |
12:10 |
USD/MAJORS... Reuters news, in an interview with CNBC, Fed's Bullard says :
- market expectations likely to return to "on hold" outlook
- have been concerned by the yield curve issues
- little impact on Fed form the election cycle
- good chance virus will be temporary shock
- valuations look high, but not at this level of interest rates, I think we're ok for now
- I would say financial stability risks are moderate at this point
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| 21 Feb 2020 |
11:03 |
EUR/USD - 1.0800.. Reuters news, Ireland's out-going PM Varadkar says :
- EU budget deal proposed is unacceptable; frugal four sticking to their position hard
- Ireland can't accept a cut in common agriculture policy funding |
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| 21 Feb 2020 |
10:13 |
GBP/USD - 1.2919... The British pound finally recovered to 1.2898 in Asia today after Wednesday's selloff from 1.3023 to a near 3-month low at 1.2849 in New York yesterday on concern over EU-UK trade negotiations. Despite retreating to 1.2885 in European morning, cable then quickly rallied to 1.2928 on upbeat UK manufacturing PMI data before easing.
Despite cable's break of previous Feb's 1.2873 low to 1.2849 yesterday, subsequent strong rebound suggests decline from Dec's 1-2/ year peak at 1.3516 has made a temporary bottom and above 1.2945 would bring retracement towards 1.2971, however, reckon 1.3023 would remain intact. Some bids are noted at 1.2900-95 with stops below 1.2880 while offers are tipped at 1.2945 with stops above 1.2975.
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| 21 Feb 2020 |
10:12 |
EUR/USD - 1.0803... Reuters news, Luxembourg's Bettel says :
- EU summit is not a failure yet, it's still going but positions not close enough to find solutions
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| 21 Feb 2020 |
10:02 |
Continues from previous update...
The statistics office also left unchanged at 1.1% its estimate for a narrower measure of core inflation, which strips out energy, food, alcohol and tobacco, confirming the indicator slowed from 1.3% in December.
Month-on-month, the euro zone recorded a 1.0% deflation, Eurostat said.
On the year, the headline reading picked up because of a sharp rise in energy prices, which increased 1.9% from 0.2% in December. Inflation was at 2.1% for food, alcohol and tobacco, accelerating from 2.0% in December.
It slowed in services, the largest part of the euro zone economy, to 1.5% in January from 1.8% in December.
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| 21 Feb 2020 |
10:01 |
EUR/USD - 1.0809... Reuters reported euro zone inflation grew an annual 1.4% in January, picking up from the previous month as energy prices surged, the European Union statistics office said on Friday, confirming its earlier estimates.
Eurostat also confirmed that core inflation, which excludes volatile food and energy, slowed in December. That will complicate the European Central Bank's plans to meet its target of headline inflation close to 2% over the medium term.
Prices in the 19-country region rose 1.4% in January year-on-year, for their third consecutive monthly acceleration, in line with market expectations. In December, headline inflation was at 1.3%.
Core inflation slowed to 1.3% in January from 1.4% in December, Eurostat said confirming its previous estimates released on January 31.
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