Forex news from the European trading session - 23 September 2020
Headlines:
- US MBA mortgage applications w.e. 18 September +6.8% vs -2.5 prior
- German cabinet reportedly approves 2021 draft budget, new debt of €96.2 billion
- JP Morgan set to move €200 billion assets to Germany in Brexit shift - report
- UK September flash services PMI 55.1 vs 55.9 expected
- Eurozone September flash services PMI 47.6 vs 50.6 expected
- Germany September flash manufacturing PMI 56.6 vs 52.5 expected
- France September flash services PMI 47.5 vs 51.5 expected
- Germany October GfK consumer confidence -1.6 vs -0.8 expected
- BOJ's Kuroda: Fed's thinking is similar to the BOJ
- ECB's Mersch: It is obvious that exchange rate has had effects on inflation
Markets:
- USD leads, NZD lags on the day
- European equities higher; E-minis up 0.4%
- US 10-year yields up 0.5 bps to 0.676%
- Gold down 0.6% to $1,889.72
- WTI flat at $39.80
- Bitcoin down 0.4% to $10,479
The dollar kept more steady in European morning trade, as it advanced against the commodity currencies but saw early gains ease up against the euro and pound.
The market in general is presenting a mixed picture, with stocks faring better once again and continuing to shrug off the pessimism seen on Monday.
US futures pushed a little higher with S&P 500 futures up by 0.4% while European indices are looking perky and posting near 2% gains on the session.
EUR/USD got a bit of mixed reception from euro area PMI data, which alluded to a divergence in economic conditions between the manufacturing and services sector.
The pair eased from 1.1690 to 1.1675 initially before settling closer to 1.1700 and is hovering thereabouts as we look towards North American trading.
GBP/USD also eased initially to a fresh two-month low of 1.2676 as the pound continues to face more pressure but buyers are pulling price action back towards the key support region around 1.2722-26 as dollar gains also ease up a little.
The aussie and kiwi are the main laggards with the former weighed down by Westpac making a call for the RBA to cut rates next month while the continued dovishness from the RBNZ is weighing on the latter after the policy meeting today.
Elsewhere, gold is continuing to stay pressured as sellers look to try and keep a break under $1,900 with silver down by 3% and testing its 12 August low @ $23.45.
