Forex news from the European morning session - 23 October 2019
Headlines:
- Some BOJ policymakers said to see little merit for a rate cut this month - report
- DUP's Wilson says would welcome a general election
- BOJ reportedly said to be considering lowering price, growth forecasts
- China shoots down report of plans to replace HK chief executive Carrie Lam
- Brexit: Labour MP says party will back a general election if EU agrees to extension
- China says to adopt new policy to boost trade development
- Wilbur Ross looks to negotiations to ease trade dispute with EU - report
Markets:
- JPY leads, AUD lags on the day
- European equities mixed; E-minis down 0.3%
- US 10-year yields down 2.6 bps to 1.735%
- Gold up 0.3% to $1,492.31
- WTI down 0.9% to $54.00
- Bitcoin down 2.0% to $7,965
Markets stayed calm for the most part as the Brexit drama hits the pause button as we await the EU to decide on the extension request.
The pound held steady for the most part, easing slightly to 1.2850 during the session before climbing late on to 1.2870-80 currently to stay near flat levels on the day.
The overall risk mood was a bit more on the defensive to start the session with equities and bond yields under a bit of pressure. But we're seeing market participants keep a calmer head as the session progressed.
As such, USD/JPY is staying near 108.40-50 from 108.30 earlier on. Meanwhile, NZD/USD recovered off lows around 0.6390 to creep back above the 0.6400 handle.
The aussie remained weak though with AUD/USD seen around 0.6835-50 for the most part amid a more stable dollar with EUR/USD trapped in a narrow range still today.
As a whole, markets appear to be taking a bit of a breather after a more hectic last few weeks but with more twists and turns expected in the Brexit drama, don't expect the calmer mood we're seeing to last for long.
Looking ahead to tomorrow, we'll also have US vice president Mike Pence's speech on China - so there's one that risk assets should be wary of during the week.
