Forex news from the European morning session - 15 August 2019
Headlines:
- Yet another quick run higher in USD/JPY
- 30-year Treasury yields hit a fresh record low ahead of North American trading
- US futures accelerate losses as risk sentiment wilts
- Risk mood softens after China tariffs statement
- China maintains stance that they will have to take countermeasures against US tariffs
- UK July retail sales +0.2% vs -0.2% m/m expected
- US Treasury 30-year yields move back above 2% now
- USD/JPY spikes up by almost 90 pips in quick jump
Markets:
- GBP leads, JPY lags on the day
- European equities lower; E-minis up 0.3%
- US 10-year yields down 3.7 bps to 1.542%
- Gold down 0.1% to $1,514.40
- WTI down 1.3% to $54.52
- Bitcoin down 0.4% to $10,128
It's been a roller coaster of a session for markets as risk trades jumped back and forth during the European morning amid heightened sensitivity among market participants.
It was a wild day for the yen as the currency began the session with an almost 90 pips drop agains the dollar in a quick move. That came as Treasuries retreated and equities extended gains in what was a push and pull between the equity and bond market.
USD/JPY moved up from 105.90 to a high of 106.78 before settling around 106.20-30 soon after. The pair then fell to 105.70 amid a retreat in equities and surge in bonds after China talked up their stance on trade against the US.
But as we look to wrap up the session, the pair got another quick spike higher to 106.34 before settling just above 106.00 amid a stray comment by China's foreign ministry that they hope the US can meet them halfway on trade talks.
That saw US futures spike to its highs for the day before settling back around 0.3% higher after having been down by around 0.6% earlier on.
Meanwhile, the pound was a notable gainer after more upbeat UK retail sales data. Cable slowly inched higher towards a test of the 1.2100 handle but broke free of the level to post highs near 1.2150 currently upon breaking key near-term technical levels.
Looking ahead, it's all about the shift in the risk mood. As such, be wary of more potential comments from China and/or Trump on the trade rhetoric but also pay close attention to the release of US economic data later today.
