ForexLive European FX news wrap: Kiwi advances amid tepid markets
Forex news from the European morning session - 16 January 2020
- Text of Phase One trade deal is balanced, fair - Chinese analysts
- IEA warns that Iraq oil supply is potentially vulnerable as Middle East tensions flare
- China's Liu He: It would be unwise to immediately start negotiations on a Phase Two deal
- PBOC to keep liquidity at reasonably ample levels this year - official
- China December M2 money supply +8.7% vs +8.3% y/y expected
- Germany December final CPI +1.5% vs +1.5% y/y prelim
- Liu He: Chinese imports of US farm products will be based on market principles
- NZD leads, JPY lags on the day
- European equities mildly lower; E-minis up 0.2%
- US 10-year yields flat at 1.783%
- Gold flat at $1,555.73
- WTI down 0.3% to $57.60
- Bitcoin down 0.9% to $8,745
Markets continue to keep more calm after in the aftermath of the US-China trade deal signing as the more steady risk tone reverberated in the European morning.
The dollar is mildly weaker alongside the yen as the aussie and kiwi are pushing gains on the day with the latter leading the charge. That said, the trading ranges remain more modest with some dollar pairs still in relatively tight ranges so far today.
AUD/USD is trading around 0.6925 but sits in a 27 pips range today above the 0.6900 handle. NZD/USD is a little better as the pair holds around 0.6650 in a 39 pips range.
The pound was a decent mover with cable moving off lows around 1.3030 to keep near highs now around 1.3065, challenging the 200-hour moving average. That will be a key spot to watch in the session ahead and as we look towards UK retail sales data tomorrow.
Meanwhile, USD/JPY continues to hug the 110.00 level amid the more steady risk tone with bond yields staying more flat and US futures just mildly higher on the day. There are also large expiries seen at the figure level so be mindful of that.
Looking ahead, there is US retail sales data to get through but the main theme in markets continue to be the US-China trade deal and how markets will "really" react to it.
As mentioned before, there is a lack of negative catalysts to burst the bubble at the moment so perhaps the risk party can carry on for a while more still. But we'll have to see if that will be the case and if we are overdue for a retracement/correction soon enough.