Forex news from the European trading session - 27 September 2021
Headlines:
- ECB's Lagarde: Baseline scenario remains that inflation stays below 2% target over medium-term
- Higher Treasury yields weigh on equities sentiment
- Bundesbank sees Germany inflation peaking between 4% and 5% by year-end
- Japan reportedly to lift state of emergency measures later this week on Thursday
- Germany's Scholz: A coalition should be formed before Christmas
- PBOC says that will keep liquidity reasonably ample
- 10-year Treasury yields stick with breakout, push to highest in nearly three months
- SNB total sight deposits w.e. 24 September CHF 714.5 bn vs CHF 714.7 bn prior
- Semiconductor suppliers suspend factory operations in China amid power crunch
- UK PRA says petrol stations running dry in English cities
- BOJ's Kuroda: Economic recovery to become clearer as pandemic impact subsides
- German election outcome rests in the hands of the 'kingmakers'
Markets:
- GBP leads, CHF lags on the day
- European equities mixed; S&P 500 futures down 0.1%
- US 10-year yields up 2.6 bps to 1.487%
- Gold flat at $1,749.29
- WTI up 1.5% to $75.05
- Bitcoin up 1.3% to $43,542
The session began with some modest optimism as regional equities opened higher with US futures also buoyed, keeping risk currencies in control.
But that quickly shifted as the bond market carries over the mood from last week, with the break higher in Treasury yields extending with 10-year yields hitting 1.49%.
That saw USD/JPY push up to its highest since early July, briefly breaching 111.00 from around 110.55 at the start of the session before keeping around 110.90 currently.
In turn, the dollar also raced higher with EUR/USD testing waters below 1.1700 and commodity currencies paring their early advance against the greenback. USD/CAD moved up from 1.2630 to 1.2660 levels while AUD/USD fell from 0.7270 to 0.7250 during the session.
Meanwhile, equities sentiment also softened with a rotation away from tech stocks hitting. That weighed on US futures and European indices as gains evaporated.
Elsewhere, oil remains perky amid the energy crisis hype which has now extended to the UK and China. That is seeing Brent keep above $79 - its highest levels since 2018 - with WTI crude also pushing up by 1.5% to above $75 at the moment.
