Forex news from the European trading session - 9 November 2020
Headlines:
- Pfizer vaccine study shows that it prevents 90% of coronavirus infections
- EU's Barnier outlines three keys to 'unlock' a Brexit deal
- Eurozone November Sentix investor confidence -10.0 vs -15.0 expected
- SNB total sight deposits w.e. 6 November CHF 707.6 bn vs CHF 707.6 bn prior
- Germany September trade balance €20.8 billion vs €16.0 billion expected
- Germany reports 13,363 new coronavirus cases in latest update today
- US state Utah orders mandatory mask-wearing as its COVID-19 positive rate >20%
Markets:
- AUD, NZD lead, JPY lags on the day
- European equities soar; E-minis up 3.7%
- US 10-year yields up 10 bps to 0.918%
- Gold down 2% to $1,910
- WTI up 9.5% to $40.70
- Bitcoin flat at $15,565
The session was largely a quiet one for the most part before Pfizer reported that its vaccine study has made a significant breakthrough, as it seeks emergency-use approval later this month in hopes of distributing the vaccine by the year-end.
The market was already rallying from the election relief/euphoria as the curtains come down on the US election, where Biden is now the president-elect, but the vaccine story pretty much sent things into overdrive and then some.
S&P 500 futures jumped up from 1.5% gains to nearly 4% gains now, while European equities are all pushing over 5% gains across the board after having started the day with gains of around 1-2% for the most part.
Meanwhile, US Treasury yields jumped following what was a lackadaisical session beforehand, with 10-year yields moving up from 0.81% to 0.93%.
The risk surge saw the dollar and yen - particularly the latter - punished in the currencies space, with USD/JPY itself rising by 130 pips from 103.70 to 105.00.
AUD/JPY is seen up by 2.5% in a push from 75.50 to near 77.00 currently.
The dollar held its ground before the drop but is being pushed to the brink once again as EUR/USD climbed from 1.1875 to 1.1900 and GBP/USD up from 1.3150 to 1.3175.
Against the commodity currencies, the dollar's decline is more evident with USD/CAD slumping to fresh lows since December last year below 1.3000.
Then, AUD/USD is jumping to a fresh seven-week high around 0.7340 while NZD/USD is breaking out to its highest levels since March 2019 above 0.6800.
Elsewhere, oil is also rallying by over 9% to above $40 while gold is showing some haven traits in a drop by over 2% to $1,905-10.
The Pfizer story may prove to be a game-changer but we'll have to see if there is more to it than meets the eye as further details surface over time. But for now, the news is encouraging and at least provides a glimpse of the light at the end of the pandemic tunnel.
