Forex news from the European morning session - 11 September 2019
Headlines:
- Trump: Fed should cut rates to zero or less
- Brexit: Scottish judges rule that UK parliament prorogation is unlawful
- China August M2 money supply +8.2% vs +8.2% y/y expected
- Russia's Novak: Did not discuss any moves to change oil prices with Saudi Arabia
- China unveils first list of tariff exemptions on US goods
- China will introduce important measures to ease negative impact of the trade war - GT editor
Markets:
- AUD leads, EUR lags on the day
- European equities higher; E-minis flat
- US 10-year yields down 2.4 bps to 1.707%
- Gold up 0.5% to $1,492.43
- WTI up 1.2% to $58.11
- Bitcoin up 0.3% to $10,079
Heading into the European morning, risk assets got a minor lift as the Global Times editor tweeted out that China is looking to introduce "important measures" to negate the impact of the trade war with the US.
That allowed AUD/USD to climb to a high of 0.6885 while USD/JPY pressed higher to 107.85 amid minor gains in equities for the most part - US futures moved up by 0.3%.
But all of that fizzled during a quiet and slow session as US futures are now flat while Treasury yields sink to near session lows, pushing USD/JPY to around 107.70.
There wasn't much notable action apart from late weakness in the euro as the single currency closes in on 1.1000 against the dollar as sellers seize near-term control of the pair. This comes ahead of the ECB policy meeting decision tomorrow.
If anything else, this just lays out expectations that markets are looking for something more dovish by Draghi & co. so be wary of a potential "sell the rumour, buy the fact" play if they under-deliver at tomorrow's meeting.
Other than that, market action was more modest with little notable action elsewhere besides a surprise decision from the Scottish High Court ruling against Boris Johnson in his prorogation of parliament and Trump calling for the Fed to cut rates into negative territory.
It's all about waiting on the ECB still so expect markets to stay focused on that ahead of the decision tomorrow.
