Forex news from the European morning session - 15 October 2019
Headlines:
- Fed's Bullard says that must consider additional rate cut insurance
- China wants US to remove retaliatory tariffs to reach $50 bn imports of US goods - report
- ECB's Knot: Believes that everyone agrees review of ECB policy is needed
- Barnier said to have told EU27 members that latest UK proposals are not enough
- Germany October ZEW survey current situation -25.3 vs -23.6 expected
- Fed's Bullard: Could reverse rate cuts in 2020, 2021 if economy improves again
- Fed's Bullard: Decisions on future cuts will be meeting-by-meeting
- Chinese media keeps up with the warm reception on the trade truce
- France's de Montchalin: We seek a Brexit deal but not at any price
- Germany's Roth: It is up to UK to make constructive Brexit proposals
- UK reportedly set to table fresh proposals to break Brexit deadlock this morning
- EU's Barnier: A Brexit deal is still possible this week
Markets:
- GBP leads, NZD lags on the day
- European equities firmer; E-minis up 0.3%
- US 10-year yields down 4.2 bps to 1.687%
- Gold flat at $1,493.98
- WTI down 1.1% to $53.00
- Bitcoin down 0.6% to $8,293
Once again, it is all about the art of the deal as markets continue to be driven by Brexit and US-China trade headlines in the European morning today.
Notably, the pound gathered steam in early trades after more upbeat tones since overnight trading. Cable moved up from 1.2610 to 1.2640 to begin the session.
Then, EU chief Brexit negotiator Barnier said a deal is still possible by this week and that saw cable run up to 1.2698 before settling around 1.2650-60.
Thereafter, a report emerged saying that yesterday's proposals by the UK were not enough and that any deal hinges on how talks will progress today.
Cable whipsawed on the headline, falling to 1.2608 before recovering to 1.2640 and is now settling around 1.2630-60 after some back and forth action.
Meanwhile, risk trades were initially looking decent/mixed before a report said that China is seeking the US to remove retaliatory tariffs in exchange for fulfilling its obligation to deliver on $40-$50 billion US agricultural purchases.
That saw a bit of a dent in risk with USD/JPY slipping to 108.16 and the likes of the aussie and kiwi were pressured on the report.
Equities also suffered a minor setback but are holding on to gains for the most part as we move towards North American trading - back from the long weekend.
Looking ahead, Brexit and US-China trade headlines will continue to be key market drivers on an otherwise empty calendar day. In the mean time, be mindful of Fed speakers as well ahead of the FOMC blackout period at the end of this week.
