Forex news from European trading session - 31 August 2020
Headlines:
- Former Japanese defence minister Ishiba set to run for LDP leadership election
- Japan's Suga said to indicate that he will stand for LDP leadership election
- Italy August preliminary CPI -0.5% vs -0.5% y/y expected
- SNB total sight deposits w.e. 28 August CHF 701.6 bn vs CHF 700.0 bn prior
- Saxony August CPI +0.1% vs +0.2% y/y prior
- Spain August preliminary CPI -0.5% vs -0.5% y/y expected
- Influential faction of Japan deputy PM Aso to back Suga for leadership role - report
- ICYMI: UK Treasury looking to push for tax hikes
- Heads up: RBNZ governor Orr to give a speech on monetary policy on 2 September
- Japan ruling party, LDP, reportedly set to hold leadership vote on 14 September
Markets:
- EUR leads, JPY lags on the day
- European equities higher; E-minis up 0.2%
- US 10-year yields up 1.1 bps to 0.732%
- Gold up 0.1% to $1,966.56
- WTI up 1.1% to $43.44
- Bitcoin up 1.6% to $11,687
It was a rather quiet session for the most part with London observing a holiday. Inflation data from across the euro area mainly reaffirmed softer price pressures, which bolsters the narrative that the ECB will keep the stimulus tap flowing for longer.
There wasn't much notable action as equities kept slightly firmer, and the yen weakened amid a pullback from last Friday's move due to Abe's resignation at the time.
USD/JPY crept higher from 105.60 to near 106.00 though key near-term levels are still keeping any topside move capped for the time being.
EUR/USD chopped around either side of the 1.1900 handle before creeping higher to 1.1940 late on. Meanwhile, the pound stayed weaker amid reports of the UK Treasury wanting to raise taxes and also a bit of pessimism flowing on Brexit talks.
GBP/USD was weighed lower from 1.3350 to 1.3300 before sitting in between there now.
Elsewhere, commodity currencies and gold are little changed in general as we await North American trading for firmer direction on the day.
