Forex news from the European morning session - 31 July 2019
Headlines:
- US MBA mortgage applications w.e. 26 July -1.4% vs -1.9% prior
- Frost reportedly to reiterate that UK is firmly leaving on 31 October during Brussels visit
- US-China trade negotiators reportedly set to meet again in September for next round of talks
- Italy Q2 preliminary GDP 0.0% vs -0.1% q/q expected
- Japan's government cuts inflation view again in latest economic projections
- Eurozone Q2 preliminary GDP +0.2% vs +0.2% q/q expected
- Eurozone July preliminary CPI +1.1% vs +1.1% y/y expected
- Global Times editor: US-China trade negotiators had an efficient and constructive exchange
- Spain Q2 preliminary GDP +0.5% vs +0.6% q/q expected
- China says that trade talks can only progress when US shows enough sincerity
- France July preliminary CPI -0.2% vs -0.3% m/m expected
- Germany June retail sales +3.5% vs +0.5% m/m expected
Markets:
- AUD leads, EUR lags on the day
- European equities higher; E-minis up 0.2%
- US 10-year yields down 1 bps to 2.047%
- Gold flat at $1,430.94
- WTI up 0.8% to $58.50
- Bitcoin up 2.4% to $9,766
There was quite a handful of headlines during the session but markets remained overall steady in anticipation of the FOMC meeting later today.
In Europe, we saw a slew of euro area data which only served to reaffirm dovish ECB expectations. Meanwhile, in Shanghai, US-China trade talks ended early but without a hitch as further talks are now scheduled for September next.
Eurozone Q2 economic growth slowed but within expectations while inflationary pressures eased in July only to serve as a reminder that the ECB will be stepping up with more stimulus when September comes.
The data did little to move the euro though as traders continue to wait on the Fed, with EUR/USD sitting in a 20 pips range between 1.1143 and 1.1162 during the session.
USD/JPY also did not budge as it lingered around 108.50-60 as Treasuries and equities held more steady in anticipation of the main event later today.
Meanwhile, the aussie held on to modest gains from Asia Pacific trading after slightly better-than-expected Q2 CPI data. AUD/USD sat around 0.6880-95 during the session.
Besides that, the pound recovers slightly after a beat down over the past two days with cable ranging around 1.2155-75. The kiwi offset losses from poor business survey data with NZD/USD climbing from 0.6590 to 0.6605-10 levels in the European morning.
Looking ahead, all the anticipation is on the Fed as currencies and bonds are holding more steady on the session. Equities look a little buoyed with tech leading the way after Apple beat earnings after the closing bell yesterday.
That said, it's all about the Fed now to provide further direction for markets and we can only wait and see as to how they want to deliver on their communique later today.
