Forex news from the European morning session - 20 March 2019
Headlines:
- UK March CBI trends total orders 1 vs 5 expected
- US MBA mortgage applications w.e. 15 March +1.6% vs +2.3% prior
- Labour's McGovern confirmed to have requested emergency Brexit debate
- UK February CPI +0.5% vs +0.4% m/m expected
- Brexit: Parliament reportedly attempting to take control of extension length
- Japanese government downgrades its economic assessment for the month of March
- Juncker: 'Highly probable' that UK will not leave the EU on 29 March
- May reportedly not seeking a long Brexit delay
- BOJ's Kuroda: China's economy showing somewhat weak signs
Markets:
- AUD leads, GBP lags on the day
- European equities lower; E-minis flat on the day
- US 10-year yields down 1.6 bps to 2.596%
- Gold down 0.2% to $1,304.27
- WTI down 0.7% to $58.60
- Bitcoin flat at $3,993
Brexit headlines dominated the European morning with Theresa May looking to request a short extension from the EU. However, her plan to buy another three months is encountering some obstacles with an emergency debate set to come about in questioning the length and purpose of the delay as well as possibly seeking a longer extension if needed.
The pound held weaker due to the uncertainty with more amendments set to be tabled on Monday and May's endeavour for another meaningful vote is still making no progress. Cable fell from 1.3250 to 1.3212 during the London morning and is continuing to range between 1.3220-40 as we await further developments.
Other major currencies traded in a more subdued manner with markets focusing heavily on the FOMC meeting decision later. EUR/USD traded in a narrow range and held around 1.1340-50 levels for the most part. Meanwhile, USD/JPY rose in Asian trading to 111.50-60 levels and stuck here throughout the European morning.
A notable mover was the aussie as the currency recovered from around 0.7070 against the dollar to trade near the highs currently just above 0.7090 with buyers looking to make another run at breaking above the 0.7100 handle.
Looking ahead, it's all about the FOMC meeting decision so expect that to be the next catalyst to drive market direction. In the mean time, expect currencies (pound aside) to maintain the lull seen so far today.
