Forex news from the European morning session - 29 January 2020
Headlines:
- China Q1 growth may fall below 5% on coronavirus outbreak - govt economist
- Germany increases 2020 GDP growth forecast to 1.1% from 1.0% previously
- The Fed to be a relative non-event later today?
- WHO to hold press conference on the new coronavirus at 1400 GMT
- Beijing health official says that risks of coronavirus infection in the city is rising
- ECB's Rehn: We have not run out of monetary policy tools
- British Airways suspends bookings of direct flights to China until March
- Germany February GfK consumer confidence 9.9 vs 9.6 expected
- Thailand says that coronavirus may cut 400,000 visitors this year
- What is the market currently pricing in for a RBA rate cut next week?
Markets:
- JPY leads, NZD lags on the day
- European equities a little higher; E-minis up ~0.4%
- US 10-year yields down 2.4 bps to 1.632%
- Gold up 0.3% to $1,571.37
- WTI up 0.6% to $53.80
- Bitcoin up 2.6% to $9,285
It is all about the risk mood in trading today as markets continue to have mixed feelings about things as they have to deal with coronavirus concerns and Wall Street earnings - not to mention the FOMC meeting coming up later in the day as well.
Risk was keeping more steady earlier on - helped by Apple earnings after the close yesterday - but that diverged during European morning trade.
As European stocks and US futures keep higher, bonds were sending a different message as yields fell and major currencies took their cue from the bond market instead.
AUD/USD was keeping higher around 0.6770 after more steady Australian inflation data but fell to 0.6745 on the softer risk turn during the morning.
Meanwhile, USD/JPY also eased from 109.20 to 109.00 before keeping just above that currently. The dollar also held more firm as it pushes slight gains against the likes of the euro and pound with EUR/USD near 1.1000 and GBP/USD near 1.3000.
Looking ahead, market participants will continue to have to try and deal with the mixed situation ahead of the Fed later today.
The latest coronavirus headlines suggest that China Q1 growth may fall below 5% and on the earnings front, Boeing disappointed by announcing cuts to its 787 production rate; pre-market shares are dragged lower as a result.
But on the latter topic, just be wary that we still have key tech earnings still to report later in the day so that will be one to watch with regards to equities sentiment.
