Session Wraps - Major Forex Headlines wrapped up by trading session

Author: Justin Low

Forex news from the European morning session - 24 February 2020


Headlines:

Markets:

  • JPY leads, GBP and CAD lag on the day
  • European equities sharply lower; E-minis down 2.3%
  • US 10-year yields down 7.7 bps to 1.394%
  • Gold up 2.3% to $1,680.81
  • WTI down 4.0% to $51.25
  • Bitcoin up 1.4% to $9,812

Sell
The market is in a sour mood to kick start the new week amid a spike higher in coronavirus cases in South Korea and Italy over the weekend.

Equities in Asia were routed and the bloodbath continued into European trading, with Italian stocks bearing the brunt of the beating - set for its biggest loss since June 2016.

Bond yields also cracked lower with 10-year Treasury yields falling below 1.40% while 30-year yields continued to chase fresh record lows during the session.

The risk-off tone benefited gold as the commodity rose by $42 at the highs to $1,689 earlier in the session, before settling near $1,681 currently.

In the currencies space, the dollar kept firmer across the board with the aussie and kiwi staying pressured but not really making fresh lows since Asia Pacific trading.

The pound was taken lower in early morning trade with cable easing from 1.2930 to 1.2890 with EUR/GBP also seeing a bounce towards 0.8400.

Meanwhile, the yen is continuing to struggle with a bit of identity crisis with USD/JPY keeping around 111.50-60 initially before retracing back lower towards 111.20.

It is all about the risk-off mood in the market as we see investors come to terms with what the coronavirus outbreak could possibly do to the world economy. Is this time for more realisation or will greed start to set in once again like the episodes we have seen before?

View More

Forex news for Asian Pacific trading on February 24, 2020

In other markets:

  • Spot gold is trading up $19.17 or 1.17% at $1662.50
  • WTI crude oil futures are trading down -$1.23 or -2.3% at $52.15
The week is starting on some shaky footings as fears from the coronavirus spreading is putting pressure on stocks, sending gold higher, oil lower and hurting the NZD, CAD and AUD, while supporting the USD.  

Although the China numbers of infected have slowed of late, and that has led to an easing of some alerts in some cities/provinces in China, the G20 over the weekend did cite virus risks in their comminique, and the spread in places like South Korea and Italy has traders worried of a worsening trend elsewhere. 

South Korea announced that he infected rose to 763, up 161 on the day.  Last week, the infected was less than 10. 

In Italy over the weekend the total number of cases rose to 152 with 3 confirmed deaths. Austria temporarily stopped train traffic to Italy but has since rescinded that order.

In Iran there were 43 confirmed cases and 8 deaths. Other countries imposed travel and immigration restrictions. The US CDC call coronavirus a tremendous public health threat.

Equities have been hit with the South Korean Kospi leading the way lower. It is currently trading down over -3.10% on the day.  The Hang Seng is down about -1.5%. The Australian S&P/ASX index is lower by -2.1%.

In the US, the futures are pointing toward another down day after the -1.79% decline in the Nasdaq and the -1.05% in the S&P indices on Friday.  A snapshot of the futures have the Dow futures down -1.37%, S&P futures down -1.38% and NASDAQ futures down in additional -1.8%.  

Gold, which is currently up $19.17 at $1662.50, reached an even higher high of $1679.70 on frantic buying early in the session. The price action has since calmed down, but the most of the gains are still in place. The price also maintains a price gap between $1649.26 and $1651.92. It will take a filling, and move below that gap to hurt the bullish bias.  

A look at the strongest and weakest of the major currencies is showing the JPY and USD as the strongest of the major currencies, while the NZD, CAD and AUD are the weakest.  The NZDUSD has fallen by -0.41% in trading so far today. The NZDJPY is down -0.45% on the day.  

Forex news for Asian Pacific trading on February 24, 2020
It is not a great start for the week as fears of a spreading virus has traders leaning toward an increasing risk off bias.  

View More

Forex news for NY trading on February 21, 2020

The headline of the day is that the 30 year yield traded to a new all time low of 1.8843%. That took out the August 2019 low yield of 1.9039% and although the yield is closing above that old low, the closing level will be the lowest on record.  

Forex news for NY trading on February 21, 2020

Helping the yields move lower is the:

  • Expectation of a cut in US rates by July and potential for another cut later in the year
  • Flight to safety flows
  • Lower global growth from the coronavirus
  • Dollar buying as the US remains a safe haven
  • The Markit Service and Composite PMI data was below the 50.0 level while the manufacturing index was lower than expectations as well.  
The 10 year yield also moved lower and approached the swing low from 2019 at 1.4272%. The low yield today reached 1.4359% before rebounding into the close to 1.4700%.  The all time low yield was in 2016 at 1.3180% (see chart below). 

The 10 year yield fell below support at 1.50% and looks toward the 2019 low yield at 1.4272%
Below is a table of the current, high and low yields for the US debt along the yield curve.   The 2-10 year spread also flattened to 12.14 basis points from 12.60 basis points yesterday. 

The US yields are moving lower.  US stocks today fell with the Nasdaq leading the way down. For the day, the Nasdaq fell -1.79% after being down as much as 2.14% at the low. The S&P index closed down a more modest -1.05% after falling as much as -1.33%.   For the week, the major indices fell with the Dow down -1.46%, the S&P down -1.07% and the Nasdaq index down -1.39%.

Gold was another big mover today and this week. The price of gold is trading up $24.00 or 1.48% at $1643.43. The high for the day reached $1649.26. That was the highest level since February 2013. For the week, the price of gold settled last Friday at $1584. The current price at $1643.43 is a $59.43 gain for the week or 3.75% gain.   Big breakout move for gold this week.  

Gold moved up nearly $60 this week
The fall in stocks, rise in gold, fall in yields led to a fall in the USD today. The USD was the weakest of the major currencies today. The strongest currency was the GBP (but it came off the highs in the NY session).   The dollar fell by 0.61% vs the GBP. It also fell versus the EUR by -.59% vs the EUR and -0.58% vs the CHF.

The strongest and the weakest for the major currencies
For the week, the dollar fared better with the largest gains vs the JPY, AUD and NZD. The JPY was hit on the back of much weaker GDP growth and concerns about the coronavirus on future growth. The AUD traded to 11 year lows this week also on the back of concerns about the coronavirus. The NZD did not escape the decline as well.  

The CHF was the strongest as it remains somewhat isolated and is also a safe haven currency in times of uncertainty.

The weeks strongest and weakest for the major currencies.

View More

Author: Justin Low

Forex news from the European morning session - 21 February 2020

Headlines:

Markets:

  • GBP leads, NZD lags on the day
  • European equities mildly lower; E-minis down 0.3%
  • US 10-year yields down 2.7 bps to 1.488%
  • Gold up 1.0% to $1,635.60
  • WTI down 1.9% to $52.86
  • Bitcoin up 1.0% to $9,707

EOD 21-02
The highly-anticipated PMI readings in Europe ended up being a bit of a disappointment as a lack of pizzazz saw a muted reaction from the market in the session today.

The risk mood was erring on the softer side as risk aversion crept back in amid coronavirus fears but euro area PMI readings showed some mixed sentiment - with the headline being better although the details do point towards supply chain disruptions.

It was a case of the market having to look at the glass as being half-full or half-empty and there was neither reaction in the end. EUR/USD rose from 1.0800 to 1.0820 on the better headlines but is settling back to 1.0800-10 currently.

Meanwhile, UK PMI also lacked an oomph as it reaffirmed some steadiness in the UK economy ahead of post-Brexit trade negotiations in the coming weeks. The pound kept steady around 1.2920-30 before pushing higher now to 1.2940 levels.

As the risk mood stays soft, the aussie and kiwi continue to stay pressured in trading this week. Meanwhile, the yen went in search for normality momentarily as the currency gained on weaker yields with USD/JPY falling to 111.50 before recovering to 111.80 levels now.

Gold remains a standout performer as the technical break stays the course as it is up by 1% on the day to $1,635 levels.

Looking ahead, it is going to be all about risk ahead of the weekend and whether or not Wall Street can turn things around. Or it could be a case of another risk averse Friday.
 

View More

More session wraps for your convenience.

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose