Forex news from the European trading session - 10 September 2021
Headlines:
- China market regulator says that it has fined three auto chip sales companies for driving up prices
- BOJ reportedly likely to warn of mounting risks to exports, output from supply bottlenecks
- US, Japan, South Korea to meet on 14 September to discuss North Korea
- Oil bounces as the push and pull this week continues
- Japan vaccine minister Kono announces bid for LDP election
- UK July monthly GDP +0.1% vs +0.6% m/m expected
- Germany August final CPI +3.9% vs +3.9% y/y prelim
- ECB's Holzmann: PEPP should end next year if economic conditions remain favourable
- German conservatives continue to trail in latest election poll
Markets:
- NZD leads, JPY lags on the day
- European equities mostly higher; S&P 500 futures up 0.4%
- US 10-year yields up 2 bps to 1.32%
- Gold flat at $1,795.02
- WTI up 1.7% to $69.30
- Bitcoin down 0.4% to $46,102
The dollar looks to end the week higher but it sure doesn't feel like it.
Outside of gains against the euro and perhaps the yen (even the latter is rather light), broad dollar strength can be hardly felt as the week winds down amid a more positive risk sentiment with equities rallying and yields climbing.
The market had been more cautious and slightly defensive over the past few days but we are seeing dip buyer and value hunters step back in today.
When all is said and done, the week can be summed up by a whole lot of pushing and pulling but amounting to nothing much at the end of the day.
EUR/USD is keeping in a tight range around 1.1830-40 on the session while GBP/USD races up to a fresh one-week high from 1.3840 to 1.3880 as the pound rebounds.
USD/JPY kept slightly higher throughout the session around 109.85-95 as Treasury yields bounce back as we move past the huge supply from auctions this week.
Elsewhere, AUD/USD kept a steady advance from 0.7380 to 0.7410 before keeping near 0.7400 while NZD/USD is up 0.6% to 0.7150 as risk keeps more optimistic.
In the commodities space, oil is a solid performer as it gains by over 1.7% to $69.30 but price action is still largely caught in a push and pull this week for the most part.
Essentially, the market is caught up in a debate on dovish central bank tapering while weighing up present economic risks that look set to weigh on the recovery in Q4.
