Forex news from the European morning session - 13 August 2019
Headlines:
- US July NFIB small business optimism index 104.7 vs 104.0 expected
- Trump reportedly asked Abe to get Japan to buy 'a huge amount' of farm products
- Germany August ZEW survey current situation -13.5 vs -6.3 expected
- UK June average weekly earnings +3.7% vs +3.7% 3m/y expected
- PBOC: Chinese yuan is at an appropriate level at present
- Here we go again... Risk aversion starts to creep in
- No deal Brexit odds jump as the political fog starts to clear
- Germany July wholesale price index -0.3% vs -0.5% m/m prior
- Hong Kong flights remain disrupted as protests continue for fifth day
Markets:
- AUD leads, CAD lags on the day
- European equities lower; E-minis flat
- US 10-year yields flat at 1.642%
- Gold up 1.1% to $1,527.84
- WTI down 1.2% to $54.28
- Bitcoin down 1.4% to $11,256
Markets were in a bit of a flux today as cautious sentiment is prevailing for the most part. Worries in Argentina and Hong Kong kept gold on the front foot but risk sentiment is a little more wishy-washy in the European morning.
A slight hint of risk aversion crept in early and kept the dollar steady with US futures paring earlier gains of 0.2% to fall by 0.4%. Meanwhile, Treasury yields also declined with 10-year yields dropping by nearly 3 bps to 1.617% at the lows.
But sentiment is seen reversing back to near flat levels currently on both fronts and is leaving for a bit of a mixed mood ahead of US CPI data later today.
USD/JPY held weaker from 105.40 to 105.10-20 levels as a more cautious mood is observed. Meanwhile, USD/CHF also reversed gains as the pair fell from 0.9720 to near session lows now around 0.9675 amid a pullback in European equities.
The dollar also lost its firm footing with EUR/USD climbing back up from 1.1190 to 1.1210-20 levels currently and the pound held more steady as UK wages data continues to stay solid, seeing cable trade around 1.2060-80 for the most part after having fallen to a low of 1.2042 at the start of the session.
The aussie has been staying firm since early trades with AUD/USD upside still limited by key hourly moving averages just above 0.6770. The loonie is holding weaker as oil prices are under pressure as the risk mood slumped a little earlier in the day.
Looking ahead, it's over to US CPI data to provide markets with more clues on where to go next but I reckon with the lack of fresh developments, we could see more flip-flop during the week as traders wait on the next big catalyst to shake things up.
We'll have to see if the US-China trade rhetoric has anything to offer but if not, then the focus will slowly shift back to central banks ahead of the Jackson Hole symposium on 22-24 August.
