Forex news from the European morning session - 24 June 2019
Headlines:
- Heads up: Fed chair Powell scheduled to make an appearance tomorrow
- Germany June Ifo business climate index 97.4 vs 97.4 expected
- SNB total sight deposits w.e. 21 June CHF 578.9 bn vs CHF 578.5 bn prior
- China says that FedEx should explain errors related to Huawei packages
- Iran says that downing of US drone was a 'firm response', can be repeated
- Inflation is the main topic for the euro this week
- Dollar index - what did we learn last week?
- Iran says that reported US cyber attacks have not been successful
Markets:
- AUD leads, USD lags on the day
- European equities lower; E-minis up 0.2%
- US 10-year yields down 2 bps to 2.03%
- Gold up 0.7% to $1,409.82
- WTI up 0.7% to $57.82
- Bitcoin up 9.0% to $10,856
It was a quiet session for the most part to start the week with the only relevant headlines being a continuation of the war of words between the US and Iran since the weekend. The dollar remains softer overall, picking up from where it left off at the end of last week.
That was a similar story for gold as it extends higher with buyers searching to hold a firm break above $1,400 and push for further gains amid more talks of central banks easing.
EUR/USD traded around 1.1380-00 throughout the session with large expiries around 1.1395-00 keeping price action at bay for the time being but with a break above the 200-day moving average on Friday, buyers are looking poised for further gains this week.
Meanwhile, USD/JPY inched lower from 107.40-45 to near 107.30 currently as Treasury yields slipped during the session. 10-year yields are down by 2 bps to 2.03% now after having began the European morning near flat levels.
The loonie also held firm during the session as oil prices remain buoyed by ongoing geopolitical tensions between US and Iran. USD/CAD inched lower from 1.3190 levels to 1.3178 before retracing slightly now ahead of North American trading.
The aussie remains the standout performer, retaining gains from Asia Pacific trading after RBA governor Lowe's remarks which questioned the effectiveness of future rate cuts. AUD/USD ranged between 0.6950-60 for the most part with cash rate futures still indicating a ~84% probability of a rate cut to come next Tuesday.
Looking ahead, markets are still wavering a little in general as US-China trade talks come back into focus this week. The Trump-Xi meeting will be the key event to watch in that regard so expect trade headlines to gather more importance as we navigate through the trading week over the next few days.