Forex news from the European trading session - 3 December 2020
Headlines:
- Brexit: Same issues still outstanding in trade talks, says EU diplomat
- Eurozone October retail sales +1.5% vs +0.7% m/m expected
- UK November final services PMI 47.6 vs 45.8 prelim
- UK, EU Brexit negotiators reportedly to take stock of overall progress either today or tomorrow
- Eurozone November final services PMI 41.7 vs 41.3 prelim
- OPEC+ talks reportedly leaning towards rollover of production cuts with gradual increase in output
- Ireland's Coveney says believe that can get a Brexit deal in the next few days
- China says anti-dumping measures on Australian wine to last up to four months
- US reportedly issues travel curbs for Chinese Communist Party members
- ECB mulls allowing bank dividends of 15% to 25% - report
- Germany reports 22,046 new coronavirus cases in latest update today
Markets:
- GBP leads, CAD lags on the day
- European equities mostly lower; E-minis flat
- US 10-year yields down 0.8 bps to 0.928%
- Gold up 0.6% to $1,842.00
- WTI down 0.7% to $44.97
- Bitcoin up 1.2% to $19,385
The market kept more quiet in general but the pound was a notable mover as Brexit headlines repeated the same old narrative for the most part.
The fact that there isn't any real sign of a breakdown in talks (despite the key issues still outstanding) is spurring the quid higher as the saying goes, "no news is good news".
Cable rose from 1.3385 to 1.3450, touching its highest levels since 1 September as we also see EUR/GBP slump back below its 100-day moving average to 0.9015.
Barnier and Frost are expected to brief on the state of play either some time today or perhaps tomorrow, so that is the key update to look forward to.
Meanwhile, the risk mood was more tepid as US stimulus hopes from yesterday are slightly offset with more pessimistic virus developments with LA going into lockdown and the US having posted a record number of virus deaths since the pandemic began.
European equities are slightly softer while US futures are near flat levels currently.
The dollar is modestly weaker as it continues to struggle for the most part, with EUR/USD keeping above 1.2100 and USD/JPY easing from 104.50 to 104.23.
USD/CHF is continuing its track lower at it posts fresh lows since January 2015 to 0.8920 following the firm downside break below 0.9000 yesterday.
Elsewhere, oil is feeling some light jitters amid a drop from $45.30 to $44.66 earlier awaiting the OPEC+ meeting, before trading closer to $45.00 currently.
Looking ahead, US jobless claims will be in focus but expect Brexit and OPEC+ headlines to be among the key focus areas of the market ahead of the weekend.
