Forex news from the European trading session - 5 June 2020
Headlines:
- OPEC+ reportedly will extend current output cuts deal by at least one month
- Saudi energy minister says coordination is under way to hold OPEC+ meeting tomorrow
- EU's Barnier: Common ground on talks with the UK is possible by autumn
- EU set to gradually lift restrictions for non-EU travellers in early July
- UK's Frost: Progress in Brexit trade talks 'limited'
- EU's Barnier: Latest round of Brexit negotiations made no significant progress
- Germany plans about €30 billion in additional debt to finance stimulus measures - report
- China says that it vows countermeasures against US list on 33 entities
- ECB's Lane says that PEPP increase is proportionate response to the outlook
- ECB's Holzmann: PEPP has been efficient in reducing distortions
- BOJ likely to maintain view that Japan economy to gradually recover in 2H 2020 - report
- ECB's Panetta: Lockdowns created deflationary risks
- Japan, Australia set to discuss easing border restrictions
- OPEC+ meeting said to be scheduled for 6 June
- ECB's de Cos says that rising risk of deflation warranted more stimulus
Markets:
- NZD leads, CHF lags on the day
- European equities higher; E-minis up 1.0%
- US 10-year yields up 4.8 bps to 0.872%
- Gold down 0.4% to $1,707.18
- WTI up 2.5% to $38.34
- Bitcoin down 1.1% to $9,675
Everything appears to be back to normal as US futures climb higher after the mild breather yesterday and European equities are posting solid gains once again.
That put pressure on the dollar and yen early on before both currencies retraced some losses amid meeting key technical levels on the charts.
AUD/USD touched above the 0.7000 level for the first time since 2 January but backed off slightly with AUD/JPY also retreating after testing its end-December highs.
EUR/USD was the notable pair that retraced gains, slipping from a high of 1.1384 to 1.1317 during the session. This follows the breakout yesterday which saw the pair post eight consecutive days of gains - the longest streak since 2011.
The pound held relatively steady despite Brexit negotiations continuing to go nowhere again, but EU chief Brexit negotiator Barnier left the door for talks to go on until October.
Cable touched a high of 1.2690 earlier before backing off its 200-day moving average to 1.2630 and is now a little higher despite the Brexit negativity.
USD/CAD is also starting to break some key levels to the downside, with OPEC+ essentially agreeing to extend output cuts ahead of the formal meeting/announcement tomorrow.
Oil prices gained strongly on the session and that helped push USD/CAD under its 200-day moving average to 1.3440 levels currently.
Looking ahead, the US jobs report will come into focus but the numbers are unlikely to do much to derail the positive mood in the market. If anything, just be mindful of profit-taking activity ahead of the weekend.
I'll be off for a few days at the start of next week but I'll catch you guys again soon. Stay safe, stay healthy, and have a wonderful day/weekend!
