Forex news from the European morning session - 22 March 2021
Headlines:
- Fedspeak to dominate the agenda today
- SNB total sight deposits w.e. 19 March CHF 702.9 bn vs CHF 702.8 bn prior
- European trust in AstraZeneca vaccine erodes after latest blood clots scare
- BOJ purchases ¥50.1 billion worth of ETFs today
- AstraZeneca US phase III vaccine trial shows 79% efficacy in preventing symptomatic cases
- SNB spent CHF 110 billion on FX intervention last year - the highest since 2012
- "Calmer" lira puts some of the spotlight back on the bond market
- Germany reports 7,709 new coronavirus cases, 50 deaths in latest update today
Markets:
- CHF leads, GBP lags on the day
- European equities mixed; S&P 500 futures up 0.3%
- US 10-year yields down 4 bps to 1.68%
- Gold down 0.4% to $1,738.05
- WTI up 0.1% to $61.50
- Bitcoin flat at $57,853
The Turkish lira meltdown is the talk of the town to start the week, after Erdogan fired now former central bank governor Agbal over the weekend - leading to a collapse in the currency as USD/TRY opened with a gap higher of 15% at 8.35.
The widespread fears of contagion led to the dollar being bid early on but that has since abated with the market taking things in stride as USD/TRY calmed down and settled around 7.80 to 8.00 in European morning trade.
US futures rebounded as Treasury yields kept lower, erasing the jump seen at the end of last week when the Fed decided to not extend the SLR exemption.
In turn, the dollar reversed course and is keeping at the lows for the day now.
EUR/USD pushed up from 1.1880 to 1.1928 - testing its key hourly moving averages - while AUD/USD closed its opening gap lower in a move from 0.7715 to 0.7742.
The yen kept steadier throughout but also lost ground as the early jitters in the market abate ahead of North American trading currently.
Elsewhere, precious metals are failing to shine to start the week despite lower yields and even with the dollar turning now, they are still sitting lower.
Gold is down 0.4% just under $1,740 while silver is still down by almost 2% to $25.75 but both are at least off the lows seen earlier in the day at least.
As much as the lira plunge was a rare and interesting event, the lack of contagion so far is seeing the market breathe a sigh of relief. That will put the focus back on bonds and Fedspeak as we get things underway this week.
