Forex news from the European trading session - 29 May 2020
Headlines:
- Trump lambastes Twitter, says it is doing nothing about the lies and propaganda from China
- Eurozone May preliminary CPI +0.1% vs +0.1% y/y expected
- Germany stresses that dialogue is key to influence China on the Hong Kong issue
- Eurozone April M3 money supply +8.3% vs +8.2% y/y expected
- Italy Q1 final GDP -5.3% vs 4.7% q/q prelim
- Twitter says that Trump tweet on Minneapolis protests violates its policies
- China repeats that Hong Kong is part of its internal affairs, no other country has the right to intervene
- France Q1 final GDP -5.3% vs -5.8% q/q prelim
- France May preliminary CPI +0.2% vs +0.3% y/y expected
- Germany April retail sales -5.3% vs -12.0% m/m expected
- Tokyo governor says that gyms, department stores will be allowed to reopen from Monday
- Tokyo governor says to loosen some restrictions on businesses from 1 June
- Germany reports 741 new coronavirus cases, another 39 deaths in latest update
- Chinese military says needs peaceful, and military, options to resolve Taiwan issue
Markets:
- EUR leads, USD lags on the day
- European equities lower; E-minis down 0.3%
- US 10-year yields down 2.6 bps to 0.664%
- Gold up 0.6% to $1,728.30
- WTI down 2.6% to $32.83
- Bitcoin down 0.5% to $9,402
The session had a couple of notable headlines but the market remains largely sidelined, but in a cautious manner, awaiting from US president Trump's speech on China later today.
Equities kept slightly weaker while Treasury yields are also sitting lower amid the more defensive mood in the market in anticipation of the key risk event.
That said, major currencies did have some decent moves but the common theme is that of dollar weakness with chatter of month-end rebalancing coming into play.
EUR/USD nudged higher to fresh highs since late March, rising from 1.1090 to 1.1140. We also saw USD/JPY fall to near two-week lows in a drop from 107.40 to 107.10 levels.
Rsk currencies have been a little more resilient as well despite the cautious mood with AUD/USD rising from 0.6630 to 0.6667 - trying to get above its 200-day moving average.
The pound had a bit of a tricky session with EUR/GBP rising to fresh two-month highs above 0.9000 dragging the quid lower initially, with cable falling back just under 1.2300 before coming back up now to near 1.2350 levels ahead of North American trading.
All eyes are on Trump's speech later today but before that we will be hearing from Fed chair Powell so let's see what either of them will deliver for markets ahead of the weekend.
