Forex news from the European morning session - 29 August 2019
Headlines:
- Brexit: Resignations begin to surface over Johnson's prorogation of parliament
- Trouble brewing for Germany's labour market?
- Germany August unemployment change 4.0k vs 4.0k expected
- China says that they are still discussing about US visit next month
- China reiterates that it opposes escalation of a trade war
- Spain August preliminary CPI -0.1% vs 0.0% m/m expected
- Saxony August CPI -0.2% vs +0.4% m/m prior
- ECB's Nowotny: Central banks should be ready to disappoint markets sometimes
- BOJ's Suzuki: No need for additional easing at this point
Markets:
- AUD leads, JPY lags on the day
- European equities higher; E-minis up 0.9%
- US 10-year yields up 0.7 bps to 1.486%
- Gold down 0.2% to $1,535.82
- WTI up 0.7% to $56.16
- Bitcoin down 2.0% to $9,475
The market focus switched to risk again in the European morning as hope springs eternal. China made somewhat softer remarks on the trade front while offering up hope of a meeting next month, allowing risk assets to rebound after a weaker start to the day.
Equities turned losses into solid gains while Treasury yields also rose across the curve after being pressured lower to start the session. As a result, USD/JPY climbed from 105.90 to a high of 106.36 before settling just under there currently.
The aussie and kiwi also picked up gains after a poorer start to the day - owing to weaker economic data once again - amid the shift in the risk mood. NZD/USD in particular erased losses from 0.6320 to hold around 0.6340 levels currently.
The loonie also held more firm as the risk turnaround spurred gains in oil with USD/CAD slipping back under the 1.3300 handle.
Meanwhile, the dollar maintained a more firm footing with EUR/USD lingering around 1.1070-85 for the most part; trapped in a 17 pips range only today.
The pound is a tad weaker as the Brexit saga drags on with lawmakers still in search of a way to stop Boris Johnson's prorogation of parliament. Cable traded to a low of 1.2182 before holding near the 1.2200 handle ahead of North American trading.
Looking ahead, the risk mood remains a key factor in affecting trading sentiment today so keep an eye out on potential trade headlines to follow from the US camp. Also, the second look at US Q2 GDP may offer something if there are any notable revisions to initial estimates.
