Forex news from the European morning session - 5 December 2019
Headlines:
- Eurozone October retail sales -0.6% vs -0.5% m/m expected
- EU reportedly planning swift talks with UK after Brexit
- Japan PM Abe says that economic stimulus package is comprehensive and preemptive
- Germany November construction PMI 52.5 vs 51.5 prior
- OPEC+ said to discuss deeper oil cuts of more than 400k bpd as main scenario
- China commerce ministry: We are in close contact with US on trade
- Germany October factory orders -0.4% vs +0.4% m/m expected
Markets:
- GBP leads, AUD lags on the day
- European equities higher; E-minis up 0.4%
- US 10-year yields up 1.5 bps to 1.79%
- Gold flat at $1,475.40
- WTI up 0.6% to $58.75
- Bitcoin up 3.3% to $7,426
Currencies continued to focus on smaller themes for the most part today as markets remain somewhat optimistic after some positive trade commentary yesterday.
The pound continued to inch higher after a break higher yesterday with cable seen around 1.3130-40 levels. Meanwhile, the loonie stayed bid amid higher oil prices and the BOC decision yesterday with USD/CAD keeping below 1.3200.
OPEC have begun their meetings in Vienna but so far there is no clear suggestion of what decision they may reach, though there is some chatter of deeper output cuts potentially.
That said, it should hardly offer a lasting reprieve given how OPEC members as a whole have already been cutting way more than they should beyond existing quotas so unless they build on that, it pretty much means the status quo.
USD/JPY continues to hold in a narrow range but is seen testing 109.00 in the late morning as risk sentiment improved a little. US futures have nudged higher as have Treasury yields, with investors still holding out some hope of trade optimism.
The aussie continues to be weighed down by poor data from earlier today while the kiwi is unable to build on recent gains as the currency is running into some key resistance levels against the likes of the dollar and yen.
Meanwhile, the euro is keeping higher as it tries to challenge the 1.10 level against the dollar once again but we'll see how that plays out in a repeat story of yesterday so far.
It's all about the individual themes driving trading sentiment as noted above but in the big picture, continue to be wary of trade as we also get closer towards the US NFP release to end the week tomorrow.
