Forex news from the European trading session - 15 January 2021
Headlines:
- Dutch government resigns over childcare subsidies scandal - report
- Italy reportedly set to tighten restrictions for most of the country
- Pfizer says modifying operations will have impact on vaccine shipments in late January to early February
- France toughens coronavirus testing rules for non-EU travellers
- China says that not aware of latest status on Australian coal situation
- PBOC says two-way fluctuations in yuan will become normal going forward
- PBOC reaffirms that will prioritise stability in monetary policy, no sudden shifts
- UK November monthly GDP -2.6% vs -4.6% m/m expected
- Germany reports 22,368 new coronavirus cases, 1,113 deaths in latest update today
Markets:
- JPY leads, AUD lags on the day
- European equities lower; E-minis down 0.3%
- US 10-year yields down 3 bps to 1.098%
- Gold flat at $1,846.50
- WTI down 1.1% to $52.98
- Bitcoin down 2.8% to $37,675
It was a quiet session for the most part as the market continues to digest the Powell and Biden narratives from trading yesterday.
Risk stayed more defensive as investors reacted with some skepticism that Biden would be able to gather bipartisan support to push forward with his full $1.9 trillion proposal.
European equities retreated alongside US futures, while 10-year Treasury yields kept lower throughout and is near the lows under 1.10% ahead of North American trading.
In FX, the dollar held firmer alongside the yen and the franc. EUR/USD eased from 1.2140 to 1.2116 and is testing daily support from the 21 December low @ 1.2130.
USD/JPY eased from around 103.75 to 103.62 but is trading within a narrow range as both currencies are maintaining a modest advance on the session.
GBP/USD fell from 1.3670 levels to 1.3614 as price is now testing its 100-hour moving average @ 1.3620. Meanwhile, AUD/USD fell from 0.7760 to 0.7727 and is testing swing region support around 0.7730 currently.
Elsewhere, gold stuck around close to $1,850 as the push and pull continues around the consolidation range of $1,830 to $1,860 in trading this week.
Looking ahead, just be reminded that it is a long weekend in the US and that might factor into a bit of added caution in the market after a bit of a disappointment in anticipation for some fireworks i.e. exhaustion following the Powell and Biden risk events.
