Forex news from the European morning session - 21 October 2019
Headlines:
- Brexit: Government to pull motion if Bercow selects amendments to "meaningful vote"
- Brexit: Rees-Mogg said to delivering business statement for withdrawal agreement bill later today
- Bundesbank: Deep recession not in the cards for Germany
- DUP's Shannon says will meet shortly to discuss issues, including customs union amendment
- Steve Baker: ERG will compromise to get UK out of the EU
- Germany September PPI +0.1% vs -0.1% m/m expected
Markets:
- NZD leads, JPY lags on the day
- European equities higher; E-minis up 0.3%
- US 10-year yields up 1.9 bps to 1.773%
- Gold up 0.1% to $1,491.75
- WTI down 0.7% to $53.38
- Bitcoin up 4.0% to $8,265
It is all about Brexit as we begin the week with the pound recovering its weekend gap lower as optimism continues to prevail ahead of some key parliamentary decisions this week.
Boris Johnson is facing a battle on two fronts now but ultimately, he needs to get parliamentary support on something or otherwise any Brexit extension granted by the EU will end up with a hectic year-end general election.
Pound traders are keeping hope as we saw cable rebound from 1.2900 to a five-and-a-half month high 1.3012 before settling just under the 1.3000 handle currently.
Meanwhile, there is a slight tilt of optimism among risk assets with bond yields edging higher alongside equities during the session.
That saw USD/JPY climb from 108.45 to a high of 108.66 before settling around 108.50-60 levels currently. Meanwhile, the mild positive vibes kept the likes of the aussie and kiwi buoyed with NZD/USD breaking above the 0.6400 handle.
Looking ahead, the focus will remain on Brexit to start the week as we look towards the "meaningful vote" decision in parliament later today.
The government will also be presenting their withdrawal agreement bill after that in hopes of getting a vote on the second reading tomorrow; with potential amendment votes on Wednesday should we see the motion tomorrow succeed.
