ForexLive European FX news wrap: Risk shrugs off US Treasury, Fed spat
Forex news from the European trading session - 20 November 2020
- Pfizer to seek FDA emergency-use authorisation for coronavirus vaccine today
- Brexit: EU officials said to be considering provisional application of any agreement
- Japan reports record daily coronavirus cases of more than 2,400 in latest update today
- Brexit: Gaps said to be only slowly shrinking on three core issues, growing concern of time left
- US futures gradually paring losses so far today
- Brexit: EU envoys reportedly briefed that main hurdles remain unresolved
- UK October retail sales +1.2% vs -0.3% m/m expected
- Germany reports record 23,648 new coronavirus cases in latest update today
- NZD leads, JPY lags on the day
- European equities higher; E-minis flat
- US 10-year yields up 1.3 bps to 0.842%
- Gold flat at $1,866.80
- WTI up 0.6% to $42.00
- Bitcoin up 1.6% to $18,225
It was a mostly quiet session with a few Brexit headlines to move things along but the key takeaway is that the market is shrugging off pessimism from the spat between the US Treasury and the Fed, as risk trades gradually recovered on the day.
S&P 500 futures were 0.5% lower to start the session but have now turned flat, while 10-year Treasury yields also moved off lows near 0.82% to just above 0.84% now.
Although expected, Pfizer confirmed they are seeking emergency-use authorisation of their vaccine and that gave risk trades a mild lift in the past half-hour.
The dollar is trading more mixed across the board as the push and pull continues.
EUR/USD fell from 1.1890 to 1.1851 but buyers are holding on to the 100-hour moving average as price bounces off the lows to near 1.1870 currently.
GBP/USD got a slight nudge lower from 1.3265 to 1.3250 as the EU briefed that Brexit negotiations are keeping the status quo, with more talks set for next week.
Since then, cable moved between 1.3260-80 levels for the most part.
Meanwhile, risk currencies got a bit of a nudge from the Pfizer news with AUD/USD moving up from 0.7300 to 0.7315 while NZD/USD jumped to a near two-year high on a push back above 0.6940 as buyers look to test the December 2018 high of 0.6969.
USD/CAD also eased from around 1.3070 to 1.3050 during the session with yesterday's lows around 1.3034-40 a key region to be mindful about in the session ahead.
Looking ahead, the spat between the US Treasury and the Fed will come back into focus although I'm not sure there is much more that needs to be said at this point.
Watch out for the 3,600 level in the S&P 500 for any major turn in sentiment or perhaps that is where buyers will see the renewed enthusiasm fade ahead of the weekend.