Forex news from the European trading session - 22 April 2020
Headlines:
- US MBA mortgage applications w.e. 17 April -0.3% vs +7.3% prior
- ECB's Rehn: ECB will do everything necessary to ensure supportive financing conditions
- EU member states disagreeing on whether coronavirus recovery fund should award grants or loans - official
- Singapore reports another 1,016 coronavirus cases, total confirmed exceeds 10,000 cases
- US futures extend gains, up by over 1%
- UK March CPI +1.5% vs +1.5% y/y expected
- Germany sees slight increase in daily coronavirus cases, 2,237 new cases reported
Markets:
- AUD leads, USD lags on the day
- European equities slightly higher; E-minis up 1.3%
- US 10-year yields up 2 bps to 0.589%
- Gold up 0.9% to $1,701.43
- WTI down 2.5% to $11.28
- Bitcoin up 1% to $6,967
The market is adopting a calmer tone on the day so far as stocks are retracing higher after a softer start to the week.
Oil jitters are still something to be mindful about as we saw WTI crude fell by 10% to a low of $10.26 in late Asia Pacific trading.
But prices stabilised thereafter, with Brent oil also erasing almost all of its losses to climb from $15.98 to $19.32 currently.
In early European trading, US futures raced higher and that helped to give risk trades a boost while the dollar weakened on the back of that.
The steadier theme played out during the course of the session as the greenback gradually weakened. EUR/USD rose from 1.0850 to 1.0885 while cable posted solid gains as the pound climbed from 1.2285 to 1.2385.
AUD/USD also rose from 0.6300 to 0.6350 before backing off slightly after running into its key hourly moving averages. At the same time, gold raced higher from $1,685 to just above $1,700 and is looking to keep above key near-term levels now.
Despite the calm during the session, best be reminded that we are still in the eye of the coronavirus storm and there are still plenty of moving parts in the market.
Oil jitters, virus-related headlines, government action, and earnings season will be among the factors to consider as we look towards North American trading.
