Forex news from the European morning session - 27 November 2018
Headlines:
- Kuwait oil minister says too early to talk about OPEC+ cuts
- ECB's Makuch to quit as Slovak central bank governor from 1 March 2019
- UK CBI November retailing reported sales 19 vs 10 expected
- Italy's Siri says considering reducing budget deficit to 2.2% or 2.3%
- DUP's Foster reiterates "we cannot support May's deal"
- ECB said to be willing to consider OMTs as option for Italy
- Italy reported to start budget debate on 3 December
- UK's Lidington says it is wishful thinking that EU will offer another plan if parliament vote fails
- Markets reset after Trump-Xi headlines get lost in translation
- Italy's budget deficit target reported to 'almost certainly' be 2.2%
Markets:
- NZD leads, GBP lags on the day
- European equities lower; E-minis down 0.2%
- US 10-year yields up 0.5 bps to 3.059%
- Gold up 0.09% to $1,223.50
- WTI down 0.39% to $51.43
- Bitcoin up 0.46% to $3,681
The session started off with moves in the pound as the quid fell during thin liquidity before European markets opened. It owed to a bit of a technical break as cable broke the wedge pattern highlighted earlier in the day here and also possibly Trump's earlier comments that May's Brexit deal will hurt trade relations between the UK and US. The pair was trading around 1.2810 before a quick move saw it fell to 1.2770 levels.
Then, there was a bit of a blooper in markets as Bloomberg reported a headline that Trump and Xi look to have reached mutual agreements ahead of trade talks this Sunday. Risk rallied with E-minis rising from being down 0.2% to being up 0.4%. However, that was all short-lived as it was clarified that China meant both leaders agreed on things during a phone call on 1 November - something we already came to know before.
Risk gains were tempered as a result with USD/JPY rising to 113.67 only to fall to 113.50 levels again. Meanwhile, AUD/USD spiked to a high of 0.7269 before settling around 0.7240 levels currently.
The dollar was offered from the headlines with EUR/USD rising up from 1.1320 to 1.1340 only to fall back to 1.1305 later on with the pound dragged lower as well. GBP/USD now trades around 1.2750 levels after having moved to a low of 1.2734 earlier on.
Despite tepid tones in risk, the kiwi is the biggest gainer on the day so far recovering from poor trade balance data earlier in Asian trading as it ranged between 0.6770 to 0.6790 before pushing higher to 0.6800 now ahead of US trading.
There wasn't much in terms of fresh developments on Brexit and Italy with the focus in the former still being on May's chances in a meaningful vote in parliament. Meanwhile, the latter is hitting a bit of a snag once again as Italy insists that they won't change key measures in their budget despite talks of lowering the budget deficit target slightly.
