Forex news from the European trading session - 2 November 2020
Headlines:
- Italy to introduce three-tier system to try and curb the spread of the virus
- What is the key risk for the market ahead of the US election tomorrow?
- Stocks surge higher on the session
- UK October final manufacturing PMI 53.7 vs 53.3 prelim
- SNB total sight deposits w.e. 30 October CHF 707.6 bn vs CHF 706.9 bn prior
- Eurozone October final manufacturing PMI 54.8 vs 54.4 prelim
- UK FSA to announce further support for borrowers impacted by the virus crisis
- China reportedly set to ban Australian copper and sugar this week
- Germany reports 12,097 new coronavirus cases as 'lockdown light' begins today
Markets:
- CAD leads, CHF lags on the day
- European equities higher; E-minis up 1.4%
- US 10-year yields down 1.7 bps to 0.857%
- Gold up 0.6% to $1,889.25
- WTI down 2.1% to $35.01
- Bitcoin down 2.6% to $13,285
It was a quiet and mixed session for the most part, as all eyes this week are on the US election tomorrow. Major currencies were more quiet and chopped around after some mild dollar strength in early trades during the session.
Treasuries were also firmer but stocks are looking to post a decent rally on the eve before the big day. European equities opened higher and moved up to post nearly 2% gains as US futures advanced from 0.5% gains to over 1% gains currently.
Amid some tepid tones early on, the dollar was steadier with EUR/USD easing from 1.1640 to 1.1623, testing support around 1.1612-27 from the late September lows.
The pair then rebounded to keep closer to near unchanged levels now around 1.1640-50.
Elsewhere, the pound was pressured early on following news of the UK entering into a second lockdown. Cable fell from 1.2900 to 1.2855 before buyers stepped in to defend the 100-day moving average @ 1.2878 on a bounce to 1.2920-30 levels.
As the dollar retreated slightly, AUD/USD also caught a bounce from 0.6991 to 0.7040 despite some concerns in the aussie involving Australia-China tensions.
Elsewhere, oil was weighed down heavily at the start of the session falling to a five-month low under $34 and down by 4%. But as stocks rallied, oil prices came back up to trim losses close to $35 now - down by a little over 2%.
The move helped to see USD/CAD fall from 1.3350 to 1.3287 with sellers leaning on the 100-day moving average to keep buyers at bay for the time being.
It is a big week in the market regardless of how things turn out tomorrow and though things are somewhat calm for now, expect more volatility in the days to come.
