Forex news from the European trading session - 24 November 2020
Headlines:
- European Commission announces vaccine-supply deal with Moderna
- UK November CBI retailing reported sales -25 vs -35 expected
- Russia says first international deliveries of its Sputnik V vaccine to follow in January
- Russia says too early to comment on its position in OPEC+ talks
- Germany November Ifo business climate index 90.7 vs 90.2 expected
- France November business confidence 79 vs 84 expected
- German states reportedly propose extending virus relief payments for companies into December
- Germany Q3 final GDP +8.5% vs +8.2% q/q prelim
- Germany reports 13,554 new coronavirus cases in latest update today
- ECB's Rehn: Must keep current financing conditions for as long as needed
Markets:
- NZD leads, CHF lags on the day
- European equities higher; E-minis up 0.7%
- US 10-year yields up 0.8 bps to 0.862%
- Gold down 1.3% to $1,813.25
- WTI up 0.9% to $43.46
- Bitcoin up 3.9% to $19,141
The market is tilting towards being more risk-on today and there's a myriad of factors one can attribute the moves to.
A formal transition to a Biden presidency is now underway, with Wall Street favourite Janet Yellen expected to take on the role as Treasury secretary. Not to mention there's still more good news in the vaccine space as well to start the new week.
Other than that, there's also the consideration of month-end rebalancing flows to muddy the picture so take your pick as to why investors are feeling more upbeat.
US futures kept solid gains throughout the session, while European indices are also posting roughly 1% gains across the board currently.
In the currencies space, that led the dollar weaker initially but we're seeing more mixed flows now upon nearing a test of some key technical levels.
EUR/USD gained from 1.1850 to 1.1894, falling short of testing the key 1.1900 handle, before falling back to 1.1860-70 levels at the moment.
GBP/USD gained from 1.3340 to 1.3380 but has since erased gains to fall near flat levels.
USD/JPY also eased lower initially amid some weakness in the dollar, dropping to 104.15 before recouping losses now towards 104.50.
The antipodeans are leading the way, with the kiwi bolstered by earlier news that the NZ government is considering adding house prices to the RBNZ mandate.
NZD/USD extended gains from 0.6970 to 0.7005 before slipping a little upon testing the figure level during the session.
AUD/USD also broke to a near three-month high from 0.7330 to 0.7368 but gains are being pared back down just below key short-term resistance around 0.7340.
Elsewhere, gold is being pressured still in a drop from $1,830 to $1,806 and is hovering just off the lows now. Key support is seen closer to $1,800.
Looking ahead, watch out for the S&P 500 and the 3,600 level when Wall Street enters the fray later. Keep above that and dip buyers will stay poised to push a more risk-on bias in what will be a holiday-shortened trading week.
