Forexlive Americas FX news wrap 1 Apr: US yields/US dollar moves higher to start April

• Fed Watch update: Chance of an FOMC June rate cut is sliding lower as data comes in hot
• April is off to a mixed start in stocks
• Credit Agricole: What 50 years uf US history tells us about the next 6-12M
• Crude oil futures settle at $83.71 a barrel
• Focus is shifting back to the large US fiscal deficit
• April seasonals: Soggy weather, sizzling markets
• Oil rises to the highest since October as Israel bombs Iran’s consulate in Damascus
• Atlanta Fed Q1 GDP now +2.8% vs +2.3% prior
• Today’s jump in Treasury yields could be the start of an ominous technical signal
• Bank of Canada Q1 business outlook survey: Conditions improved slightly
• US February construction spending -0.3% versus 0.7% expected
• US March ISM manufacturing 50.3 vs 48.4 expected
• US S&P global manufacturing PMI for February 51.9 versus 52.5 flash
• Canadian S&P global manufacturing PMI 49.8 versus 49.7 last month
• The USD is the strongest and the NZD is the weakest as the NA session begins

The USD got kicked higher to start the new trading month as yields climbed to their highest levels since March 20. The 10 year rose 12.1 basis points which was the largest increase since February 13. The 2-year yield rose 8.9 basis points on the day also its biggest 1-day increase since February 13th. The expectations is now for 65 basis points of cuts in 2024 down from 80 after the FOMC rate decision just a week and half ago.

The gains were triggered by better-than-expected ISM manufacturing which moved back into expansionary territory to 50.3 (highest since September 2022). The expectations were for 48.4 after last month’s reading at 47.8.

The prices paid also moved higher to 55.8 from 52.5 last month. That was the highest level since July 2022.

Other details showed:

• Employment 47.4 vs 45.1 prior
• New orders 51.4 vs 49.2 prior
• Inventories 48.2 vs 45.3 prior
• Production 54.6 vs 48.4 prior

Fed officials – including Fed’s Powell, Bostic and Waller – all dialed back the idea of that 3 was the number of cuts in 2024.

With the yields moving higher, so did the USD. The greenback is the strongest of the major currencies today led by the a 0.57% increase st the GBP. The dollar also rose 0.49% vs the AUD, 0.45% vs the EUR and 0.43% vs the NZD.

For the GBPUSD, it fell below the 200-day MA at 1.2587 and outside the “value area” (from 1.2594 to 1.2800) that has confined most of the trading range since mid-December. The price got within a few pips of the last low extreme from February 14 and would look toward the 2024 low from February 5th at 1.25176.

The EURUSD moved to its lowest level since mid-February with the next target at 1.0723 (the low reached 1.0730). The 2024 low from February 14 reached 1.06942. The price is within 36 pips of the low for the year. Less than a month ago, the price was up at 1.09806.

The USDJPY moved higher but remains below the 2022, 2023 and 2024 highs at 151.94, 151.91 and 151.967 respectively. The high price today reached 151.77 today and is above its 100/200 hour MAs near 151.38. Staying above those levels would keep the buyers in control.

In other markets today:

• Crude oil moved higher and trade up $0.74 at $83.91. Israel bombed Iran’s consulate in Damascus
• Gold rose $16 or 0.75% to $2250.30
• Bitcoin is lower and below the $70,000 level at $69,847

US stocks closed mixed with the Dow and S&P lower. The NASDAQ index rose modestly:

• Dow industrial average fell -0.60%
• S&P index fell -0.20%
• NASDAQ index rose 0.11%

The small-cap Russell 2000 was hit the hardest with the decline of -1.02%.

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This article was written by Greg Michalowski at www.forexlive.com.