Forex news from the European morning session - 12 December 2019
Headlines:
- China says that it will maintain prudent monetary policy
- North Korea: It is clear that US has nothing to offer us even if talks resumed
- SNB's Jordan: Swiss inflation would turn negative if we tightened monetary policy
- Eurozone October industrial production -0.5% vs -0.5% m/m expected
- Global Times editor warns on China retaliation if US imposes December tariffs
- SNB's Jordan: Without negative rates, the franc would appreciate rapidly
- Sterling overnight implied volatility jumps to highest since 2016 Brexit referendum
- SNB leaves policy rate unchanged at -0.75%
- China commerce ministry on trade talks: We are in close communication with the US
- Your guide to the 2019 UK general election
Markets:
- AUD leads, GBP lags on the day
- European equities mixed; E-minis up 0.1%
- US 10-year yields up 0.7 bps to 1.798%
- Gold flat at $1,474.70
- WTI up 0.4% to $59.00
- Bitcoin up 0.2% to $7,206
It's all about the pound in the European morning today as the UK election begins. The currency kept calm for the most part before finding a quick drop as cable fell from 1.3200 to 1.3151 before recovering back above the 100-hour moving average currently.
Election jitters no doubt but expect this kind of price action during the day before we get to crunch time when the exit poll is out at 2200 GMT and the results trickle in after.
The rest of the market remained more quiet and tentative with no follow through moves from overnight trading after the Fed. The dollar is keeping more steady for now with EUR/USD resting in a 19 pips range but is relatively unchanged on the day.
Meanwhile, there is little action everywhere else with US futures keeping more flat and a similar tone observed in bond yields today. That is leaving USD/JPY little to work with as well as the pair ranged around 108.60-70 for the most part during the session.
We have the ECB meeting decision coming up next but that isn't expected to produce any surprises but we'll have Lagarde's press conference after so perhaps she may offer a thing or two for markets to chew at.
In the bigger picture, markets are keeping their eyes and ears peeled on any news from Washington as we continue to wait on Trump's decision about the 15 December tariffs.
We could be in for quite a frenetic end to the week if Lagarde deviates from the script and if Trump announces a tariffs decision, all while trying to digest the UK election result. But this is the type of day that we all live for, so fingers crossed on that. :D
