Session Wraps - Major Forex Headlines wrapped up by trading session

Author: Justin Low

Forex news from the European trading session - 2 December 2021

Headlines:

Markets:

  • GBP leads, AUD lags on the day
  • European equities lower; S&P 500 futures up 0.1%
  • US 10-year yields down 1.5 bps to 1.419%
  • Gold down 0.2% to $1,779.50
  • WTI down 0.5% to $65.22
  • Bitcoin down 1.0% to $56,446

It was a quiet session for the most part as risk sentiment kept calmer early on but as we get in the final half-hour, we are starting to see the jitters and nerves creep back in.

European equities had a poor start, having to play catch up to Wall Street losses yesterday but the downdraft extended as risk appetite struggled during the session.

S&P 500 futures traded up by 0.5% only to be up by 0.1% now while Nasdaq futures turn negative and we're even seeing Treasury yields pare most of its advance from earlier, with 10-year yields even tracking lower now ahead of US trading.

In FX, things were more mixed as the dollar traded little changed mostly early on with USD/JPY trading up to 113.30 only to fall back to 112.80 now as the market is starting to look a little more nervous.

EUR/USD moved up slightly from 1.1320 to 1.1340 while GBP/USD kept a narrow advance around 1.3300-20 for the most part.

Commodity currencies saw some pushing and pulling as a result, though ranges are narrow with USD/CAD moving up from 1.2790 to 1.2815 while AUD/USD eased from 0.7120 to 0.7100 on the session.

Elsewhere, oil remains a key focus as OPEC+ decides on its output policy today but sentiment hasn't been too favourable as WTI crude slipped from $67 earlier to near $65 now amid headlines that OPEC+ may stick with its existing output policy instead.

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Forex news for Asia trading on Thursday 2 December 2021 

Every day so far this week has seen losses for the USD and a bid for 'risk' emerge during Asia morning trade. Today is no different. US equity index futures have ticked higher, ES is up by over half a percent as I post, admittedly small potatoes after the thrashing US stocks received into the local cash close on Wednesday.

Over in FX, the dollar is lower with EUR, GBP up notably as are AUD, CAD and NZD to a lesser extent. USD/JPY has inched higher which has given, of course, a tailwind to yen crosses here. USD/CHF, on the other hand, has lost (a little) ground. 

[UPDATE (half an hour after publishing the wrap) ... there is a degree of a turnaround in the USD, its recovered much of its earlier losses.]

There was no news of a game-changing nature but there were slight easings of Omicron-related flight restrictions from France and Japan (see bullets above). An internal border in Australia has tightened a touch.

From the Federal Reserve we heard from Cleveland President Loretta Mester, who was quick to approve of potential quicker tapering and even said two hikes could be coming in the new year. 

Not just in Soweto:

Forex news for Asia trading onThursday2December 2021 

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Forex news for North American trading on December 1, 2020.

The US stocks opened higher and continued the corrective move higher (after yesterday's sharp declines) as Chair Powell and Treasury Secretary Yellen progressed with their 2nd day testimony on Capitol Hill. This time the pair was speaking to the the House Financial Services Committee.  Highs in the major indices were made during their testimony with the major indices showing gains of 1.51% for the Dow, 1.89% for the S&P and 1.8% for the NASDAQ in New York morning trading.

Although stocks started to give up gains in the early afternoon after the testimony was over, the markets got a jolt from a headline that the first omicron case was diagnosed in the US (in the San Francisco area). Although the person had mild symptoms and was quarantined without spread to those in contact, the selling intensified especially in the NASDAQ index, sending that index into the red. Later on, the S&P index and Dow industrial average joined the NASDAQ index in negative territory.  

At the close, the major indices were all making new session lows. The small-cap Russell index was the hardest hit at -2.34% (it is now down over -12.5% from the highs reached on November 8th). The NASDAQ fell -1.83% (and is down -5.9% from its all-time high), the Dow fell  -1.34% and the the S&P declined by -1.18%.  Defeat was snatched from the jaws of victory. 

If the story plays out like the other chapters in the covid book, the fears will be overblown. Those who are unvaccinated will have the greatest risk. However, the shutting down option is likely not in the cards.  CDCs Fauci tried to allay fears and encourage more vaccinations, but stocks markets were not listening. 

In addition to equities moving lower, crude oil prices also turned from positive to negative trading back down below $66. Yesterday the low reach $64.43. Today the afternoon low extended down to $64.84. The high price for the day reached $69.49. The good news for crude oil is that it is down some 24% from its high reached on October 25. Although the declines have yet to make it to the pump, and concerns will remain with regard to what comes out of the OPEC meeting tomorrow, there should be some inflationary easing from the recent declines.

In the forex market, the JPY is ending the day is the strongest of the majors on flight to safety flows. The USD which was negative early in the day, is more positive at the close. The CAD and AUD are ending as the weakest of the major currencies.  

In other markets:

  • Spot gold is trading up $6.81 or 0.38% at $1780
  • Spot silver is trading down $0.48 or -2.14% at $22.31
  • WTI crude oil futures is trading at $65.66. That is down $-1.30 on the day.
  • Bitcoin gave up gains to $59,099 and is trading near $57,000 as New York traders look to exit
In the US debt market, the two year yield is closing up about 2.5 basis points while the tenure yield and 30 year yields are both trading lower by -3.7 and -4.3 basis point respectively. The yield curve continue to flatten with the 2 - 10 year spread coming into 85.3 basis points.

Forex news for North American trading on December 1, 2020.


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Author: Justin Low

Forex news from the European trading session - 1 December 2021

Headlines:

Markets:

  • AUD leads, CHF lags on the day
  • European equities higher; S&P 500 futures up 1.3%
  • US 10-year yields up 3.7 bps to 1.478%
  • Gold up 0.7% to $1,785.90
  • WTI up 4.5% to $69.18
  • Bitcoin up 0.2% to $57,250

It was a positive session for risk trades as the market brushed aside worries on the omicron variant, after having seen a more hawkish take by Fed chair Powell yesterday.

Despite stocks suffering a drop on rate hike fears yesterday, Powell's nonchalant approach in viewing the omicron variant is perhaps helping to keep markets more sanguine today with equities bouncing back and bond yields climbing as well.

European indices started off with modest gains before pushing up to around 1.2% to 1.8% while US futures gradually crept higher to stick around gains of over 1%.

That is helping to see commodity currencies keep more buoyed even if gains were not stretching all too much against the dollar, with the greenback also arguably finding some support from Powell's hawkishness in trading yesterday.

EUR/USD moved lower from 1.1335 to near 1.1300 while USD/JPY stuck with gains around 113.30-50 levels for the most part on the session.

Meanwhile, USD/CAD is down slightly around 1.2740-50 levels while AUD/USD and NZD/USD are building on a bounce from the August lows yesterday as both pairs have erased their post-Powell drop for the most part.

AUD/USD traded up to a high of 0.7170 before sticking around 0.7130-40 levels while NZD/USD climbed to a high of 0.6860 before sticking around 0.6830 levels now.

Elsewhere, oil was a notable gainer after suffering its worst month this year in November. WTI is up over 4% on the day to above $69 as bargain hunters swoop in before the focus switches to OPEC+ in the next few days.

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