Forex news from the European morning session - 13 June 2019
Headlines:
- OPEC warns that trade tensions are hurting global oil demand
- SNB's Jordan: There is no reason to tighten monetary policy
- Iran on oil tanker attacks: Suspicious doesn't begin to describe what likely transpired this morning
- SNB's Jordan: There have been few signs of inflation expectations deanchoring
- ECB: US politics gives euro's global use a boost
- Eurozone April industrial production -0.5% vs -0.5% m/m expected
- SNB's Jordan: Still have room to maneuver on rates
- SNB's Jordan: Swiss franc is still highly valued
- SNB leaves sight deposit interest rate unchanged at -0.75%
- Oil tanker which caught fire in the Gulf of Oman reportedly said to be struck by a torpedo
- Oil gains reprieve on report of oil tanker on fire in the Gulf of Oman
Markets:
- CHF leads, AUD lags on the day
- European equities higher; E-minis up 0.3%
- US 10-year yields down 0.9 bps to 2.111%
- Gold up 0.3% to $1,337.00
- WTI up 3.6% to $53.00
- Bitcoin down 0.2% to $8,107
Markets were calm for the most part with equities inching higher after a subdued start in Asia Pacific trading but it was oil who made waves in European morning trade today. Oil prices surged after reports of attacks on two tankers in the Gulf of Oman, with Brent rising by 4% at one stage alongside solid gains in WTI of more than 3% during the session.
Both Brent and WTI held gains and are trading near the highs for the session now at $62.20 and $53.00 respectively. This in turn is helping the Canadian dollar find bids with USD/CAD lingering near the 1.3300 handle from 1.3330 levels earlier in the day.
As the risk mood improved slightly, USD/JPY also crept higher from 108.30 to 108.40 levels with the dollar mostly steady in trading so far. The franc was a notable gainer after the SNB raised its inflation forecasts for the year and announced a new policy rate to replace the existing framework but overall the central bank decision offered little of anything new.
The aussie remains the weakest performing major currency after a mixed jobs report earlier which saw strong employment gains but mostly in part-time jobs while hours worked declined and the unemployment rate crept higher. AUD/USD has been lingering around the 0.6905-20 level throughout the session.
Meanwhile, the pound is also a tad weaker as it continues to be pressured since overnight trading with the first voting round results of the Tory leadership contest due at the top of the hour. Cable hit a low of 1.2662 from 1.2680 levels earlier before settling around 1.2670-80 as we move towards North American trading.
Looking ahead, expect the market focus to remain on risk sentiment today as we wait on US retail sales data tomorrow to provide more clues on the US economy and Fed pricing.
