Forex news from the European morning session - 16 October 2019
Headlines:
- Brexit: DUP said to have privately accepted Boris Johnson's customs proposals
- US MBA mortgage applications w.e. 11 October +0.5% vs +5.2% prior
- Brexit: Barnier said to have told EU commissioners that he is optimistic of getting a deal done today
- UK's Barclay: Government will abide by the law over Benn Act
- EU said to see Brexit deal as impossible unless the UK moves
- UK September CPI +0.1% vs +0.2% m/m expected
- UK government said to be downbeat on chances of a Brexit deal
- Brexit: DUP said to be unlikely to support anything that is negotiable
- Germany may drop balanced budget goal if economic downturn deepens
- ECB's Holzmann: The last decade of monetary policy needs review
Markets:
- JPY leads, NZD lags on the day
- European equities mixed; E-minis down 0.3%
- US 10-year yields down 3.7 bps to 1.734%
- Gold flat at $1,481.00
- WTI up 0.1% to $52.88
- Bitcoin flat at $8,144
It is all about the pound in the European morning today as the quid gets brought on a wild ride from Brexit headlines, which were all over the place.
There was some light optimism to start the session as cable ran up to 1.2785 before being shot down as headlines suggested dimming hopes of a Brexit deal.
The pound fell on each headline to fresh lows before recovering to the 1.2700 handle after every dip before settling around 1.2730-40 mid-way through the session.
Then, we had a report on Barnier feeling optimistic about a deal and that saw cable recover to 1.2750-70 levels and that is where we're settling at right now despite the DUP being said to have agreed to Boris Johnson's proposals in private.
Elsewhere in markets, the risk mood remains more tepid and on the defensive side as US-China tensions flare up slightly in relation to the Hong Kong drama.
Treasury yields held weaker throughout alongside US futures and that is keeping the likes of the yen and swissie bid on the session.
That in turn continues to put added pressure on the aussie and kiwi with both currencies slowly inching lower during European morning trade.
The euro got an early boost on hopes of German stimulus with EUR/USD climbing from 1.1030 to 1.1060 but an upside break continues to be left wanting for the moment.
Looking ahead, it's still all about Brexit but with a host of central bank speakers to come and US retail sales data, be wary of potential movements in risk and Fed pricing as well.
