Forex news from the European morning session - 13 December 2019
Headlines:
- China continues to show muted reaction to trade deal - report
- Chinese diplomat: A trade deal with us needs mutual respect, equality
- ECB's Vasiliauskas: Inflation target is key issue to discuss
- ECB's de Guindos: ECB still has room to act with QE, rate cuts if needed
- Bundesbank slashes its 2020 German growth forecast
- China says committed to resolving trade issues but deal must be mutually beneficial
- UK election: Conservatives officially secure an overall majority in the election
Markets:
- GBP leads, JPY lags on the day
- European equities higher; E-minis up 0.4%
- US 10-year yields down 0.5 bps to 1.887%
- Gold up 0.1% to $1,471.51
- WTI up 0.9% to $59.72
- Bitcoin flat at $7,203
The UK election produced little drama as the results reaffirmed the exit poll with Boris Johnson's Conservatives winning big - the largest majority for the party since 1987.
The pound surged higher on the exit poll already with cable briefly eclipsing 1.3500 from 1.3170 and then settling around 1.3450-70 in the aftermath. But as the session progressed, the pound retraced gains even more to stay around 1.3350-90 currently.
At the same time, risk sentiment is buoyed by US talking up a trade deal with China and a smooth-sailing UK election only helped to give European stocks more to cheer about.
As such, the yen is the weakest performer as the rest of the market adopted a more risk-on tone in trading today. USD/JPY kept around 109.55-70 for the most part of the session.
Other risk currencies also pushed higher with the kiwi, loonie and aussie all finding bids against the dollar and yen and are keeping gains on the day.
But as we approach North American trading, it must be pointed out that China opted to keep quiet on a trade deal from an official capacity today. Trump touted a "BIG DEAL" yesterday but so far China has made no mention of that in any of their communications.
There also hasn't been an official response to the deal that Trump reportedly signed off in overnight trading and that may present some risks ahead of the weekend later today.
Alright, I'll be off now. It's been a long day and I wish everyone a great rest of the day ahead and a wonderful weekend as well. :)
