Forex news from the European morning session - 16 December 2019
Headlines:
- UK PM spokesman: We plan to bring back Brexit bill to parliament on Friday
- German official says government has yet to reach an accord on 5G ruling
- Bundesbank sees German economy stalling in Q4 2019
- UK December flash manufacturing PMI 47.4 vs 49.2 expected
- Eurozone December flash manufacturing PMI 45.9 vs 47.3 expected
- Germany December flash manufacturing PMI 43.4 vs 44.6 expected
- France December flash manufacturing PMI 50.3 vs 51.5 expected
- China says US accusations against Chinese diplomats for spying are completely devoid of facts
- China says that will release more trade information in due course
- ECB's Holzmann: Possibility of rate change if 2020 trough passes
- USTR calls out trade news speculation in latest statement
- Brexit: EU warns Boris Johnson over tough trade talks to come moving forward
Markets:
- leads, JPY lags on the day
- European equities higher; E-minis up 0.4%
- US 10-year yields up 2.1 bps to 1.844%
- Gold up 0.1% to $1,477.20
- WTI flat at $60.05
- Bitcoin down 2.2% to $7,082
There were a couple of headlines and economic releases to move the session along but they were all largely inconsequential as markets kept steady to start the new week.
US-China trade continues to cast a large shadow over markets with the lack of details over the Phase One trade deal still something that is keeping the mood more cautious.
However, risk is modestly advancing as we look towards North American trading with equities and bond yields inching higher. As such, the yen is the weakest performer in the currencies space with USD/JPY sitting around 109.40-50 at the moment.
The greenback itself is rather weak as it is weighed lower against commodity currencies with USD/CAD finding itself lingering at six-week lows around 1.3125.
Meanwhile, the pound continues to reel in the UK election result at the end of last week as it is bought on dips with cable slipping from 1.3422 to a low of 1.3323 before climbing back to 1.3370-80 levels seen currently.
It is pretty much a mix of profit-taking and dip-buying and I would expect that trend to continue balancing out throughout the week for the pound.
Overall, markets are keeping some steady footing with risk cautiously optimistic about a Santa Claus rally this year. However, the foundation is a bit shaky as US-China trade is lacking exuberance due to the lack of specifics/details of the trade deal.
Nonetheless, the platform is still there - albeit a more flimsy one - so let's see how things develop during the week and if it can support a more calm ending to the year or if things will start unraveling over the next two weeks.
