Forex news from the European morning session - 10 May 2019

Headlines:

Markets:

  • CHF leads, JPY and GBP lags on the day
  • European equities higher; E-minis down 0.3%
  • US 10-year yields up 0.5 bps to 2.447%
  • Gold up 0.1% to $1,285.70
  • WTI up 0.4% to $61.95
  • Bitcoin up 3.2% to $6,277
EOD 10-05

It was a steady session overall as markets weren't too phased after the US' tariffs increase on $200 billion of Chinese goods kicked into effect as we began the morning in Europe. China said that it would be forced to retaliate and that tempered with risk sentiment a little but things quickly steadied after Chinese assets rebounded, following reported intervention from the "National Team" to prop up stocks and the yuan.

USD/JPY fell from around 109.80 to a low of 109.62 but then recovered to trade around 109.75-85 levels thereafter. Meanwhile, the dollar was also helped slightly from risk-off flows but then gave back gains after as overall ranges weren't too stretched.

AUD/USD fell from 0.7000 to around 0.6980 before recovering to trade around 0.6990-00 levels throughout the European morning. The euro is among the standout performers as the single currency holds steady, with EUR/USD hovering around 1.1220-35 for the most part.

The pound saw some action as UK Q1 GDP data was released, showing a rebound from Q4, and that allowed cable to pick up slight bids from 1.3000 to 1.3021 before backing off slightly. Looking at the details, stockpiling is muddying the economic picture and is making for a tough time to really gauge domestic conditions even as business investment improved.

Looking ahead, there's only one thing that markets will be fixated on today and that is US-China trade talks so expect that to remain the center of attention even as we have US CPI data to come. But with the Fed having brushed aside weak inflation as transitory, I wouldn't expect the data to tell us much.

WCRS 10-05