Forex news from the European morning session - 22 August 2019
Headlines:
- UK August CBI retailing reported sales -49 vs -15 expected
- Markets more optimistic on euro area data headlines but the details offer a different take
- Eurozone August flash manufacturing PMI 47.0 vs 46.2 expected
- Germany August flash manufacturing PMI 43.6 vs 43.0 expected
- China says impact from US tariffs are overall manageable
- France August flash manufacturing PMI 51.0 vs 49.5 expected
- China: Despite US tariffs delay, any new tariff measures will lead to escalation
- Intervention being reported to support yuan
Markets:
- JPY leads, NZD lags on the day
- European equities mixed; E-minis down 0.1%
- US 10-year yields
- Gold down 0.4% to $1,496.34
- WTI up 0.6% to $56.00
- Bitcoin down 1.0% to $10,055
Markets remain tepid as the anticipation remains on Jackson Hole for the most part. Bonds were in a state of flux, rising and falling throughout the session but the overall risk tone remains more cautious - allowing for the yen to gain since early trades.
The Chinese yuan was weaker since Asia Pacific trading and that contributed to the softer risk mood. USD/JPY fell from 106.40 to a low of 106.25 amid weaker Treasury yields before recovering some ground back to 106.40 levels currently.
The aussie and kiwi are weaker as such, with the latter lingering at its lowest level since January 2016 against the dollar.
The euro was a notable mover on the day as better-than-expected euro area PMI data headlines helped to lift the single currency a little before those gains quickly evaporated. EUR/USD climbed from 1.1080 to highs of 1.1112 before falling back to lows around 1.1070 currently as the markets digest the details of the data.
Looking ahead, the risk mood remains the key thing to watch but I reckon the choppy mood will continue to prevail until we get fresh commentary from the Fed at Jackson Hole.
