Forex news from the European trading session - 10 December 2020
Headlines:
- Brexit dinner reportedly leaves no-deal outcome looking more likely
- Heads up: ECB policy decision due later at 1245 GMT
- European Commission proposes contingency measures to prepare for no-deal Brexit outcome
- Brexit: Sunday "deadline" in tatters as talks reportedly could stretch on further
- Germany's RKI says expects coronavirus deaths to rise further in the coming weeks
- Heads up: Pfizer vaccine expected to gain FDA emergency use authorisation
- UK's Raab: EU would need to move significantly to keep talking beyond Sunday
- UK's Raab: Never say never, Brexit talks could continue after Sunday
- UK October monthly GDP +0.4% vs 0.0% m/m expected
- Tokyo reports record 602 new coronavirus cases in latest update today
- Germany reports record 23,679 new coronavirus cases in latest update today
Markets:
- AUD leads, GBP lags on the day
- European equities higher; E-minis up 0.1%
- US 10-year yields down 1.5 bps to 0.921%
- Gold down 0.2% to $1,836.15
- WTI up 1.5% to $46.20
- Bitcoin down 1.3% to $18,285
It was all about the pound in European trading as the ongoing Brexit stalemate dragged the quid lower across the board, with risks of a no-deal outcome creeping up.
The Brexit "deadline" is now stretched to Sunday but even then, there are still question marks surrounding if that will truly mean anything in the lead up to the transition period "deadline" of 31 December at the end of this year.
The EU also proposed a contingency offer in hopes of sidestepping several no-deal Brexit issues, but that is surely going to get rejected by the UK.
Cable saw a steady drop from 1.3360 to 1.3250 on the session and is barely hanging on there, with EUR/GBP testing the 0.9100 handle ahead of North American trading.
Besides that, commodity currencies stayed more bid with equities keeping mostly steadier. European stocks are paring back some gains in the last few minutes as European regulators are reportedly in favour of a longer dividend ban for banks.
But US futures are mostly steady after the pullback from yesterday.
AUD/USD is keeping at the highs around 0.7490 as the rally in iron ore futures also helped to bolster sentiment in the aussie, with USD/CAD also seen easing from around 1.2800 to 1.2780 during the session as oil keeps firmer.
Looking ahead, the ECB will come into focus as they announce their "recalibration" at 1245 GMT before Lagarde's press conference at 1330 GMT.
