Forex news from the European trading session - 4 December 2020
Headlines:
- ECB policymakers open to 12-month PEPP extension - report
- China policymakers reportedly comfortable with yuan appreciation for now
- Brexit: A deal is reportedly "imminent", expected by the end of the weekend barring any last-minute breakdown
- BOE's Saunders: If more stimulus is needed, rate cut and QE may be best approach
- Brexit: Barnier not returning to Brussels, to remain in London instead
- France's Beaune: We would veto any Brexit deal that is deemed unsatisfactory
- Germany October factory orders +2.9% vs +1.5% m/m expected
- Brexit: What is the state of play now?
- Germany reports 23,449 new coronavirus cases in latest update today
Markets:
- CHF leads, NZD lags on the day
- European equities a little higher; E-minis up 0.4%
- US 10-year yields up 2.1 bps to 0.927%
- Gold up 0.1% to $1,842.02
- WTI up 1.1% to $46.14
- Bitcoin down 2.6% to $18,950
It was a session largely dominated by Brexit headlines, with things being more quiet otherwise as we see the dollar trade more mixed ahead of the non-farm payrolls report.
Equities are sitting slightly higher as US futures posted modest gains with Treasury yields also rising amid more optimism surrounding stimulus talks ahead of the weekend.
Commodity currencies were mostly lower on the day as the aussie and kiwi are facing a minor pullback, with the loonie staying near unchanged as USD/CAD keeps with the break below 1.3000 and the close below 1.2900 yesterday.
The greenback instead traded lower against the euro and franc, with EUR/USD extending its breakout to 1.2178 and is just hovering below that currently.
Elsewhere, the pound was initially weaker on a drop to 1.3412 as Brexit talks look set to drag on to the weekend before a report suggesting a deal is "imminent" helped cable to bounce to a high of 1.3494 before settling thereabouts now.
The US jobs report will come into focus in the hour ahead and more good news there could well set the platform for equities to keep with the more buoyant mood. If the market does somehow react adversely though, dips are likely to be bought down the road regardless.
