Forex news from the European trading session - 13 May 2020
Headlines:
- Germany's Merkel: We agreed from the start that we can't stop the virus, but we have to slow it down
- US MBA mortgage applications w.e. 8 May +0.3% vs +0.1% prior
- ECB's Rehn: German court verdict does not instantly affect ECB monetary policy
- German constitutional court president: ECB decision is good for Europe, strengthens rule of law
- Germany confirms all border crossings with France, Switzerland, Austria will be opened after 15 May
- China says Trump call to halt investment in Chinese stocks runs counter to economic law
- UK Q1 preliminary GDP -2.0% vs -2.6% q/q expected
- Japan's Nishimura: Yen exchange rate remains relatively stable, calm
- Italy set to lift restrictions on meeting with friends - report
- Germany reports 798 new coronavirus cases, 101 deaths in latest update
- China warned New Zealand this week of risks to damaging the relationship
Markets:
- AUD leads, NZD lags on the day
- European equities lower; E-minis up 0.6%
- US 10-year yields flat at 0.664%
- Gold up 0.3% to $1,708.35
- WTI up 0.5% to $25.92
- Bitcoin up 2.0% to $9,000
It was a session dominated by headlines from governments as the easing of coronavirus restrictions is taking center stage in Europe.
The headlines were encouraging but played little to motivate the market as instead, a mid-session rally in US futures is what is moving major currencies instead.
The dollar is weaker across the board with the bulk of the softness coming towards midday in Europe, as US futures move from flat levels to gains of around 0.6% now.
AUD/USD raced higher from 0.6470 to 0.6520 during the session, while EUR/USD recovered off its low at 1.0831 to move higher to 1.0870 levels.
Meanwhile, cable also nudged higher after the UK data deluge, rising to 1.2300 before backing off to 1.2270. But as the dollar is falling off, that is pushing the pair back higher to fresh session highs at around 1.2330 levels currently.
The kiwi stays weaker after the RBNZ nearly doubled QE and reaffirmed that negative rates is still an option. But NZD/USD did recover from 0.6000 to 0.6050 on the session.
European equities are still playing catch up to the late swoon in US stocks overnight, so that belies the current sentiment in the market.
All eyes will turn towards Fed chair Powell later in the day but it'll be interesting to see how the risk mood plays out with US stocks showing early poise after a rough time yesterday.
