Forex news from the European morning session - 24 October 2019
Headlines:
- China reportedly willing to buy $20 billion of US agricultural products in year one
- BOJ reportedly said to mull refraining from extra stimulus at next week's meeting
- Aussie and kiwi fall further as buyers show more signs of exhaustion
- Euro gains dissipate as hopes for an economic rebound fade away
- Eurozone October flash manufacturing PMI 45.7 vs 46.0 expected
- Easy come, easy go for cable buyers
- Germany October flash manufacturing PMI 41.9 vs 42.0 expected
- France October flash manufacturing PMI 50.5 vs 50.2 expected
- Brexit: Boris Johnson faces election quandary
Markets:
- JPY leads, NZD lags on the day
- European equities higher; E-minis up 0.1%
- US 10-year yields down 0.5 bps to 1.759%
- Gold down 0.1% to $1,490.35
- WTI down 0.5% to $55.71
- Bitcoin down 0.7% to $7,440
It was a session that had a bit of everything but in mild doses for the most part.
The main action came as the euro and risk trades got a bit of a boost after French October PMI data showed some improvement, giving rise to hopes of an economic rebound.
EUR/USD climbed from 1.1135 to a high of 1.1163 while risk assets inched higher with the DAX touching its highest level since June 2018. Treasury yields also switched higher with 10-year yields rising by nearly 4 bps to 1.782%.
However, the reaction was short-lived as German and Eurozone figures disappointed, leaving markets to resign to the fact that the euro area economy is going nowhere still.
EUR/USD fell off thereafter to hit a low of 1.1130 and is settling around here for now. USD/JPY also reversed gains as the pair fell from 108.75 to 108.60 levels.
European stocks pared losses while bond yields slipped back to negative territory before risk trades are seen more steady ahead of US trading now.
Meanwhile, the pound continues to sit in limbo with cable surging higher early in the session to a high of 1.2950 before moving to a low of 1.2877 just as quickly.
Brexit headlines continue to wait in the wings as we await the EU decision on the extension request - possibly to come tomorrow.
The aussie and kiwi stayed weaker throughout the session as both currencies seem to be exhausted after their recent run higher, despite the risk flip flop.
Looking ahead, we'll get some US data releases to move things along but all eyes today will be on US vice president Mike Pence's speech on China later at 1500 GMT. That may have significant repercussions for risk trades, so be sure to keep an eye out for that.
