Forex news from the European trading session - 9 December 2020
Headlines:
- US MBA mortgage applications w.e. 4 December -1.2% vs -0.6% prior
- Ireland's Coveney: UK has sent signal that it wants to rebuild trust
- Brexit: Johnson, von der Leyen meeting expected to start at 1900 GMT later today
- China November M2 money supply +10.7% vs +10.5% y/y expected
- UK's Gove: There can be scope for compromise on fisheries
- Germany October trade balance €19.4 billion vs €18.5 billion expected
- Germany reports 20,815 new coronavirus cases in latest update today
Markets:
- AUD leads, CHF lags on the day
- European equities higher; E-minis up 0.2%
- US 10-year yields up 2.3 bps to 0.941%
- Gold down 0.7% to $1,857.60
- WTI up 0.2% to $45.70
- Bitcoin down 2.5% to $18,313
It was another European morning session riddled with Brexit headlines, with the main event yet to come in Brussels later today.
The pound rose on hopes that the meeting between Boris Johnson and Ursula von der Leyen later will yield a significant breakthrough, as EUR/GBP fell from 0.9060 to 0.9000 while GBP/USD rose from 1.3380 to 1.3460.
The move in cable was also helped by some dollar weakness as we see more of a risk-on tilt in the market ahead of North American trading.
European equities kept higher while US futures were steady throughout, with Treasury yields modestly higher on the session as well.
The better risk mood is bolstering the aussie and kiwi, with the former rising to its highest levels since July 2018 against the dollar and eyeing 0.7500.
The dollar observed a modest decline overall but has pared some losses against the euro and franc notably, with EUR/USD easing from 1.2140 to 1.2100 levels currently.
Looking ahead, Brexit is still the key focus but we will also have the Bank of Canada decision later on as well as more US stimulus talks as a stalemate beckons for now.
