Forex news from the European trading session - 13 September 2021
Headlines:
- ICYMI: Growing calls for a correction in equities
- ECB's Schnabel: Inflation will likely noticeably decrease as soon as next year
- BOE's Hauser: Unwinding QE will be an integral part of future tightening strategies
- German economy ministry says GDP growth to pick up significantly in Q3
- SNB total sight deposits w.e. 10 September CHF 714.8 bn vs CHF 714.9 bn prior
- Germany August wholesale price index +0.5% vs +0.8% m/m expected
- China calls on Internet companies to put an end to the "walled gardens"
- NZ PM Ardern says Auckland to move to level 3 alert from 22 September
Markets:
- USD leads, CHF lags on the day
- European equities higher; S&P 500 futures up 0.5%
- US 10-year yields down 1.5 bps to 1.326%
- Gold flat at $1,787.78
- WTI up 1.3% to $70.64
- Bitcoin down 1.1% to $44,560
The market is seeing a calmer and brighter start to the new week, as equities are recovering slightly from last week's losses with US futures climbing roughly 0.5%.
European indices are also posting solid gains around 0.6% to 1.1% on the session but the mood in FX is more mixed with the dollar holding a slight edge on the balance of things, advancing noticeably against the euro, yen and franc.
EUR/USD eased from 1.1800 to 1.1775 while USD/JPY pushed up from 109.95 to 110.15 even as Treasury yields are looking more tepid so far on the day.
USD/CHF is the big mover as it gained from 0.9190 to 0.9240, contesting the August highs at 0.9239-42 currently going into North American trading.
Commodity currencies are little changed with the loonie pipping a slight advance during the session (helped by a better mood in oil prices), with USD/CAD down to 1.2660 before bouncing back to 1.2680-90 now as the dollar strengthens.
Oil is the other key mover on the day as price is up over 1% with WTI going in search of a technical break above resistance levels around the $70 mark, although gains have been trimmed amid a firmer dollar in the past hour.
I would argue that there will still be some element of push and pull in the market before we get to tomorrow's US CPI data to provide some undertone for the week.
But from a technical perspective, the greenback is keeping in good stead after defending some key levels on Friday and sellers maintaining the push lower in EUR/USD.
