Session Wraps - Major Forex Headlines wrapped up by trading session

GMTAuthor: Justin Low

Forex news from the European trading session - 22 October 2018

Headlines:

Markets:

  • CAD leads, GBP lags on the day
  • European equities trade higher, but off the highs
  • US 10-year yields up 0.2 bps at 3.194%
  • Gold down 0.32% to $1,223.10
  • WTI up 0.03% to $69.14
  • Bitcoin up 0.23% to $6,399


The session started with a risk on mood as Chinese equities surged for a second straight trading day as local authorities continued to talk up support for the economy and domestic companies. Chinese stock indices pulled off a more than 7% gain over the course of two days as a result and that helped to keep risk assets bid on the day.

US equity futures traded higher into the start of the session and that helped USD/JPY move towards 112.75 from 112.60. As the session progressed, the focus shifted to Italy with domestic bonds starting the day strongly as yields tumbled following Moody's stable outlook on the nation's credit last Friday.

As a result, EUR/USD jumped up to a high of 1.1550 from 1.1510 and that helped to lift the pound inadvertently with cable moving from 1.3065 to 1.3090. The improved sentiment in Italian bonds led to healthy gains for European stocks to begin the session and that weighed a little on the swissie.

However, the mood was short-lived as Italian bonds then paring gains as worries start to resurface on the budget being rejected by the European Commission. At the same time, the dollar captured some bids across the board and moved higher as well. EUR/USD then fell to a low of 1.1493 and the pair now trades around the 1.1500 handle now.

Meanwhile, the pound was brought lower on worries regarding Theresa May's position as prime minister with a vote of no confidence reported to be in the works. Cable fell initially to 1.3060 but then slowly made its way lower to trade at session lows currently of around 1.3010 ahead of US trading.

As the dollar stayed bid, USD/JPY made its way to a high of 112.88 where it trades just under currently. AUD/USD saw a much calmer price action with the pair trading flat for the most part around 0.7120 to begin the session but moved a little lower to trade near the 0.7100 handle as the dollar picked up bids.

It was a similar story for NZD/USD as well with the pair starting off around 0.6595 levels before tracking to a low of 0.6575 where it trades just above currently.

The only currency to defy the dollar move so far today is the Canadian dollar with the loonie recovering from Friday's poor set of data as traders look towards the Bank of Canada rate decision on Wednesday where the central bank is expected to hike rates by 25 bps. USD/CAD started the session around 1.3100 and moved lower to 1.3080 before settling just above it currently.


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GMTAuthor: Adam Button

Forex news for Asia-Pacific trading on October 22, 2018:

Markets:

  • Gold float at $1227
  • Shanghai Composite +4.1%
  • CAD leads, AUD lags

The FX market started with some GBP selling and then moved onto commodity currencies but all the moves were modest and they have reversed.

The story so far is Chinese stocks. The Shanghai composite is 8% off Friday's lows as the response to the coordinated jawboning along with the weekend household taxes drives a major bid. If it holds, it will be the biggest two-day rally in three years.

So far the spillover to FX has been modest but there are improving signs. US stock futures are flat after falling at the open.

Looking ahead, you would expect to see the positive sentiment spill over but those same markets didn't exactly track the 30% drop in Chinese stocks this year through last Thursday.

Thought for the day: In traditional wars, countries spend a tremendous amount of money to win and keep morale high at home. Why wouldn't they do the same in a trade war?

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GMTAuthor: Adam Button

5

Forex news for North American trading on October 19, 2018:

Markets:

  • Gold up $1 to $1226
  • WTI crude up 63-cents to $69.28
  • S&P 500 down 1 point to 2767
  • US 10-year yields up 1.5 bps to 3.19%
  • NZD leads, JPY lags

Fundamentals were the main driver on Friday as US equity volatility calmed slightly. It started with a double dose of poor Canadian data points as retail sales and CPI missed estimates. The response was swift with USD/CAD up to 1.3120 from 1.3035. After a small retracement the pair made a fresh high at 1.3132 late and closed near the highs.

In Europe, kinder words between Italy and the EU sparked a rally and there was also talk of Italy lowering its deficit target. It's all constructive and it was all good for the euro as it climbed to 1.1510 from as low as 1.1435 in Europe.

Cable got some help from a report saying May was ready to compromise on the Irish border. That led to a 50 pip jump to 1.3100 but right away there were questions about whether she can get those ideas through her party or parliament. Cable slid to 1.3075 late.

USD/JPY was bounced around by stocks but generally traded close to 112.50, where it finished, up 30 pips on the day.

The kiwi was the standout performer this week but after topping 0.6600 early in North America it pulled back to 0.6580. Similarly AUD tracked down to 0.7110 from 0.7150.

Have a great weekend.

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GMTAuthor: Giles Coghlan

European Session news wrap


  • Gold +0.07% at 1231.00
  • US Crude +0.66% at 69.10
  • FTSE 100 +0.13% at 7038.99
  • Italian FTSE -1.12% at 18868.25
  • Dax -0.12% at 11564.24
  • CAC 40 -075% at 5078.37


The session started with the market digesting Brexit fears as it becomes increasingly clear that Britain is facing a hard Brexit. Britain doesn't want it, the EU doesn't even want it (with barnier saying as much),  but the facts remain that the N.Irish backstop is perhaps an unsolvable issue. May is playing for more time and in doing so creates trouble for herself within her own party and with the Labour Party potentially ready to pounce and try to lead Britain down another referendum.  The GBPUSD has been contained in a fairly narrow range of 50 points and price on the 15 minute chart has been contained by the 100EMA.


Italy's FTSE has fallen around the -1% mark, recovering a little into session end,  as Fitch outlines the reality that a sovereign downgrade of Italy will knock on to the banks too. The Italian Government's anatginostic approach to the EU is not being taken well with the EU calling the Italian budget 'unprecedented'. That's unprecedented in a bad way and opens up more EURO weakness and new pressures on the Italian Government. The EUR/USD pair has been contained within a similarly narrow range of about 40 points and again finding resistance against the 100 EMA


Gold found strong bids at the 100 EMA on the 1 hour chart as investors look for it as a safe haven in the falling equity and rising US yield environment 


The main event coming up is Canada's CPI and retail sales coming up, and you can check out Adam's preview here.




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