Forex news from the European trading session - 12 November 2020
Headlines:
- UK's Gove: We have shown a great degree of flexibility in Brexit negotiations
- Japan reports record 1,634 new coronavirus cases in latest update today
- IEA sees no major oil demand boost from vaccine breakthrough in 1H 2021
- BOE's Bailey: Don't have a date in mind for negative rates review outcome
- BOE's Bailey: Vaccine news is broadly consistent with BOE forecast assumptions
- ICYMI: Moderna said to begin assessing Phase III vaccine trials data "within a week"
- UK Q3 preliminary GDP +15.5% vs +15.8% q/q expected
- Germany October final CPI -0.2% vs -0.2% y/y prelim
- OPEC reportedly looking to extend current output cuts for another 3-6 months
- Germany reports 21,866 new coronavirus cases in latest update today
Markets:
- EUR leads, GBP lags on the day
- European equities lower; E-minis down 0.4%
- US 10-year yields down 4 bps to 0.934%
- Gold up 0.3% to $1,871.30
- WTI down 0.8% to $41.10
- Bitcoin up 0.7% to $15,947
It was a relatively quiet session as the market continues to work through the optimism from vaccine news on Monday and how that all translates to the virus situation now and when things will actually get better next year.
Equities were softer to start the day and kept that way throughout, although there was a slight switch back to tech as Nasdaq futures rallied from losses to gains with less tech-heavy indices like those in Europe and Dow futures slumped.
In the currencies space, the dollar and yen kept steadier throughout but the euro is holding slight gains after a bounce from the lows earlier during the session.
EUR/USD fell to a low of 1.1759 before rebounding off some support close to 1.1760 to 1.1823 and is now sticking closer to 1.1800. The continued push higher in EUR/GBP from support at 0.8866-74 to current levels closer to 0.8980-90 is also helping.
In that lieu, the pound is pushed lower upon a break below 1.3200 as cable slid to 1.3133 and is hugging the lows ahead of North American trading.
Risk currencies are seen lower against the dollar with AUD/USD easing from 0.7270 to 0.7250 while NZD/USD failed to hold early gains above 0.6900 in a drop to 0.6856.
It is all about the push and pull now as the market starts to digest all of the events so far this month and what that entails for near-term and long-term sentiment.
Monday was a brief glimpse into the future but as the virus situation in the US worsens with a lack of stimulus aid in sight, can investors keep hopes up ahead of the year-end with almost all of the good news already baked in by now?
