Forex news from the European morning session - 2 May 2019
Headlines:
- BOE leaves bank rate unchanged at 0.75%; votes 0-0-9
- UK parliament business next week doesn't include any debate on Brexit
- UK April construction PMI 50.5 vs 50.3 expected
- Eurozone April final manufacturing PMI 47.9 vs 47.8 prelim
- Germany April final manufacturing PMI 44.4 vs 44.5 prelim
- France April final manufacturing PMI 50.0 vs 49.6 prelim
- Italy April manufacturing PMI 49.1 vs 47.8 expected
- Switzerland April manufacturing PMI 48.5 vs 51.0 expected
- Spain April manufacturing PMI 51.8 vs 51.2 expected
- Germany March retail sales -0.2% vs -0.5% m/m expected
Markets:
- AUD leads, JPY lags on the day
- European equities lower; E-minis up 0.2%
- US 10-year yields up 2 bps to 2.52%
- Gold down 0.3% to $1,272.44
- WTI down 1.5% to $62.69
- Bitcoin up 1.1% to $5,368
Major currencies were mostly subdued on the session after the action from FOMC meeting overnight, as market participants looked to find a theme to latch on to in the new day. The pound was among the main movers with cable rising earlier in the European morning from 1.3050 to 1.3080 before retreating back to 1.3050 ahead of the BOE meeting.
The BOE inflation report then showed an upgrade of growth forecasts but the central bank cut its inflation forecasts to negate the positive sentiment. Cable initially moved higher on the headlines, rising to 1.3078 but then hit a session low of 1.3026 thereafter before settling around 1.3040-50 levels currently.
Other than that, most other major currencies remain subdued with the yen slightly lower as Treasury yields climbed alongside the likes of the aussie and kiwi as markets grew a little more optimistic about hopes of a US-China trade deal.
USD/JPY ranged between 111.45-60 for the most part with AUD/USD pretty much stagnant around 0.7020-30 as trading ranges remain relatively narrow.
Meanwhile, EUR/USD ticked higher on the back of more positive data early on rising from 1.1205 to a high of 1.1219 before gains leveled off after German PMI data tempered with optimism during the morning.
There wasn't any other major moves of note as the dollar remains rather flat in trading so far with traders likely keeping one eye on tomorrow's jobs report release.
