Forex news from the European trading session - 29 January 2021
Headlines:
- Japan reportedly to extend state of emergency measures
- ECB unlikely to cut rates as benefit seen limited - report
- ECB's Makhlouf: Rate cut not warranted right now
- Germany Q4 preliminary GDP +0.1% vs 0.0% q/q expected
- Germany January unemployment change -41.0k vs +7.5k expected
- Spain Q4 preliminary GDP +0.4% vs -1.5% q/q expected
- PBOC dismisses rumours that it had raised its standing loan facility rate
- France Q4 preliminary GDP -1.3% vs -4.0% q/q expected
- Robinhood raises more than $1 billion from investors in emergency infusion
- Japan January consumer confidence index 29.6 vs 29.0 expected
- Germany reports 14,022 new coronavirus cases, 839 deaths in latest update today
Markets:
- NZD leads, JPY lags on the day
- European equities lower; S&P 500 futures -0.6%
- US 10-year yields up 2.7 bps to 1.072%
- Gold up 1.1% to $1,864.20
- WTI up 0.4% to $52.53
- Bitcoin up 12.6% to $37,467
It's looking to be a wild end to the January trading month as the market looks to turn around another risk averse session at the start of European trading into more positive sentiment ahead of North American trading - similar to yesterday.
The chaos involving meme stocks is still captivating the market for the most part but the broader risk mood continues to reflect modest dip buying appetite ahead of the weekend.
European indices slumped by more than 1% at the open with the DAX even falling by roughly 2% at one point but have trimmed losses in the past few hours. The DAX now trades down by 0.8% as we move past midday in Europe.
US futures reflected similar price action with S&P 500 futures being down by 1.2% before halving that decline now ahead of the US open.
In FX, the dollar held firmer amid the early risk retreat but have now pared gains on the day although USD/JPY is still keeping poised for a more bullish breakout.
The pair gained above its 100-day moving average of 104.40 to 104.94 but have seen the momentum abate to 104.60 levels currently.
Meanwhile, EUR/USD eased to 1.2095 before jumping back up to 1.2145 as the dollar slumped amid the improvement in the risk mood.
AUD/USD also trimmed losses from 0.7635 to 0.7675 while NZD/USD climbed from a low of 0.7151 to trade near session highs close to 0.7200 at the moment.
Elsewhere, precious metals remain a key attraction as silver jumped early on in a quick push from $26.50 to $27.20. Buyers maintained gains and silver stays 3% higher on the day around $27.30-40 levels currently.
Gold also benefited from the softer dollar late on as it moved higher from around $1,840 levels to $1,860 levels now.
Other than that, Bitcoin also rallied strongly as the retail frenzy continued with Elon Musk's #bitcoin addition to his profile helping to add to the hysteria this week.
