Forex news from the European morning session - 30 July 2019
Headlines:
- China's Politburo: Economic operations remained within a reasonable range in 1H 2019
- China's Xi says economic situation is good overall
- Eurozone July final consumer confidence -6.6 vs -6.6 prelim
- EU reportedly set to call Boris Johnson's bluff on no-deal Brexit
- BOJ's Kuroda: Aware that there are various discussion on negative rates
- Saxony July CPI +0.4% vs +0.5% m/m prior
- BOJ's Kuroda: Cannot say that prices are losing momentum at the moment
- BOJ's Kuroda: Important to maintain powerful easing to sustain price momentum
- BOJ's Kuroda: Japan's economy is expanding moderately
- France Q2 preliminary GDP +0.2% vs +0.3% q/q expected
- ICYMI: Boris Johnson reaffirmed that "withdrawal agreement is dead" during Scotland visit
Markets:
- JPY leads, GBP lags on the day
- European equities lower; E-minis down 0.3%
- US 10-year yields down 1.8 bps to 2.047%
- Gold up 0.1% to $1,428.40
- WTI up 0.8% to $57.33
- Bitcoin down 0.3% to $9,490
The pound continues to be the main talking point in markets as the currency bleeds further amid ongoing concerns about a no-deal Brexit.
Cable fell off early in the morning from 1.2155 to 1.2119 in a quick drop before lingering around 1.2120-40 at the start of European trading. The pound then recovered some poise during the session on profit taking/short covering to rise to 1.2190 before retreating further again to 1.2150-60 levels currently as sellers stay in control.
The dollar is holding more steady with narrow ranges seen in most dollar pairs with traders anticipating the FOMC meeting decision tomorrow. EUR/USD is holding near unchanged levels around 1.1150 currently, bouncing between 1.1135-45 for the most part.
AUD/USD and NZD/USD held weaker amid softer risk sentiment as equities fell off during the session alongside a drag in bond yields, not helped by Trump's remarks on China as trade talks begin in Shanghai today.
The softer risk mood is what is feeding gains in the yen and the franc on the session. USD/JPY fell from 108.65 to hold near 108.50 currently as Treasury yields moved lower while the franc is benefiting off a wretched performance by European stocks - exacerbated by the gloomy forecasts by Bayer and Lufthansa during the session.
Looking ahead, it's all about the Fed so expect market sentiment this week to ultimately be decided by what the US central bank chooses to communicate tomorrow.
