Forex news from the European morning session - 22 June 2020
Headlines:
- BOE's Bailey: UK government would have struggled to fund itself if not for QE expansion
- French president Macron set to meet with Dutch PM Rutte tomorrow to discuss EU recovery fund proposal
- Bundesbank sees German economy shrinking by nearly 10% in Q2 2020
- UK June CBI trends total orders -58 vs -50 expected
- UK households remain downbeat about their financial prospects in June - Markit
- SNB total sight deposits w.e. 19 June CHF 680.1 bn vs CHF 679.5 bn prior
- Germany's Scholz: I am confident we will have solution for EU recovery fund
- ECB's de Guindos: A Pan-European fiscal reaction to the virus pandemic is necessary
- Beijing will see a 'cliff-like' drop in virus cases this week - China NHC expert
- BOE's Bailey: Balance sheet could shrink before raising rates again
- Germany reports 537 new coronavirus cases, 3 deaths in latest update
Markets:
- NZD leads, JPY lags on the day
- European equities lower; E-minis up 0.5%
- US 10-year yields down 0.8 bps to 0.685%
- Gold up 0.2% to $1,747.50
- WTI down 0.6% to $39.50
- Bitcoin up 1.4% to $9,445
It was a quiet session for the most part as the market focus stayed more on risk, with investors shrugging off virus concerns as we get things going on the week.
The likes of the aussie and kiwi opened with a gap lower but climbed into European morning trade, with the dollar and yen weakening mildly as a result.
That came as US futures pushed higher and extended gains from 0.4% to around 1.0% during the session with European indices also turning losses into gains for a brief period.
But as we hit midday in Europe, the risk mood is looking a little more measured with US futures now up 0.5% while European stocks are back in the red again now.
The back and forth action saw EUR/USD climb from 1.1190 to 1.1225 before retreating to 1.1200-10 levels. GBP/USD also firmed from 1.2370 to 1.2430 before backing off a little to sit just under the 1.2400 handle at the moment.
Meanwhile, AUD/USD pushed higher from 0.6860 to 0.6893 to test key near-term resistance but is now back lower to around 0.6870 levels.
It certainly feels like the market is taking a breather amid the jitters at the end of last week, though US coronavirus figures are going to be a focal point in the session ahead.
The thing to be mindful about though is that the latest count today will reflect the weekend count and much like what we have seen from Europe as well, those tend to show "better" numbers because of the lack of testing among other things.
The market already knows that but still, it is still something that dip buyers may just ride on if we do see the numbers turn out less bad than the past few days.
