Forex news from the European morning session - 3 April 2019
Headlines:
- US MBA mortgage applications w.e. 29 March +18.6% vs +8.9% prior
- Japan plans tighter oversight of regional banks' profits
- Austria's Kurz: There is currently no reason for a Brexit extension
- SNB's Maechler says that central bank is willing to intervene if necessary
- UK March services PMI 48.9 vs 50.9 expected
- Eurozone March final services PMI 53.3 vs 52.7 prelim
- Germany March final services PMI 55.4 vs 54.9 prelim
- France March final services PMI 49.1 vs 48.7 prelim
- Italy March services PMI 53.1 vs 50.8 expected
- Spain March services PMI 56.8 vs 55.0 expected
- UK's Letwin: Process of seeking Brexit delay will continue as planned
Markets:
- AUD leads, JPY lags on the day
- European equities higher; E-minis up 0.5%
- US 10-yer yields up 4 bps to 2.515%
- Gold up 0.1% to $1,294.50
- WTI up 0.2% to $62.70
- Bitcoin up 3% to $4,957
It wasn't a session particularly filled with key headlines as the risk-on mood dominated trading sentiment today. Chinese PMI figures showed a modest rebound from February and a report by the FT suggested that US and China are nearing a final trade agreement helped to contribute to the more upbeat mood in Asian trading.
The aussie is the lead gainer as a result and is also supported by better-than-expected retail sales data earlier. AUD/USD inched higher from 0.7100 to 0.7127 during the European morning and trades just under there at the moment.
Gains there were very much mirrored by the kiwi with NZD/USD rising from 0.6775 to hit a high of 0.6800 and trades just around there currently.
Risk-on sentiment saw the dollar and yen fall behind with the latter lagging the rest of the major bloc with USD/JPY hugging levels around 111.40-60 throughout the session. The 200-day moving average is the key level that is keeping gains in the pair in-check for now.
Meanwhile, EUR/USD and GBP/USD nudged higher on the back of a weaker dollar with the latter also extending overnight gains after May offered a cross-party compromise to break the Brexit deadlock.
Looking ahead, expect risk sentiment to still be the dominant theme once again as equities continue to push forward with gains and bond yields retracing last week's decline further.
