Forex news from the European morning session - 2 January 2020
Headlines:
- UK December final manufacturing PMI 47.5 vs 47.4 prelim
- Eurozone December final manufacturing PMI 46.3 vs 45.9 prelim
- Germany December final manufacturing PMI 43.7 vs 43.4 prelim
- France December final manufacturing PMI 50.4 vs 50.3 prelim
- Italy December manufacturing PMI 46.2 vs 47.2 expected
- Spain December manufacturing PMI 47.4 vs 47.0 expected
- Chinese foreign ministry: Not aware of specifics of stock link suspension
- China temporarily suspends Shanghai-London Stock Connect scheme - report
Markets:
- USD leads, NZD lags on the day
- European equities higher; E-minis up 0.5%
- US 10-year yields down 0.7 bps to 1.91%
- Gold up 0.3% to $1,522.27
- WTI up 0.3% to $61.25
- Bitcoin down 1.1% to $7,134
There wasn't much heavy news flow in the European morning besides some final manufacturing PMI releases for the euro area - which served as a reminder that any potential major economic recovery in the region remains a distance away for now.
But there was a bit of action across the different asset classes, though it was all a bit more mixed as we look towards North American trading.
The dollar held firm throughout but gathered more of a bid towards European midday as bonds also turned around after a weaker start to the session. EUR/USD slipped back under the 1.1200 handle while cable also eased just under 1.3200 before recovering a little.
The start of the session saw a bit more of a risk-on mood with European stocks posting solid gains amid a solid move higher in US futures as well. In turn, bond yields also inched higher with German 10-year yields touching fresh seven-month highs.
Treasury yields also climbed with 10-year yields hitting 1.94% before dropping by around 3 bps to 1.91% now as market conditions still remain a little thin post-holiday season.
That didn't affect the mood in the currencies space all too much as the dollar kept firm but yen pairs did ease a little lower. The aussie and kiwi are among the weakest performers to start the year as domestic bond yields eased during the day.
The standout performer in my view has been gold though, as the commodity has maintained gains throughout the session - despite the more positive risk mood earlier as well. Gold is up by 0.3% close to session highs around $1,522.30 after a solid run to end 2019.
