Forex news from the European morning session - 5 November 2018
- Eurozone November Sentix investor confidence 8.8 vs 9.8 expected
- UK October services PMI 52.2 vs 53.3 expected
- EU's Weyand on Coveney's backstop message: Still necessary to repeat this
- SNB total sight deposits w.e. 2 November CHF 577.5 bn vs CHF 578.0 bn prior
- Ireland's Coveney: "Time-limited backstop" would never be agreed by the EU
- Assessing the impact of US Mid-term elections on the dollar
- Economists push back RBA rate hike timing forecast to Q1 2020
- Brexit: Financial services issues reported to be all but settled
- More from Kuroda: Doesn't expect BOJ easing to continue for the next decade
- BOJ's Kuroda: Changing the 2% price target is unnecessary and inappropriate
- BOJ's Kuroda: No change in central bank's stance to achieve the 2% price target
- GBP leads, CHF lags behind on the day
- European equities mixed, mostly flat
- US 10-year yields down 1.3 bps to 3.199%
- Gold down 0.10% to $1,231.70
- WTI down 0.40% to $62.86
- Bitcoin up 0.73% to $6,398
The session started off with tepid tones in the equities space as investors lose some confidence on hopes of a US-China trade resolution. The weaker tones in Asian equities kept the aussie and kiwi pinned lower - alongside poor Chinese data - to start the day but the downside wasn't anything overwhelming. Sentiment recovered into European trading and the morning began without much fuss as European equities trade mixed but mostly flat as the session gets underway.
The big story so far today though is the pound as it leads the rest of the major bloc on the back of increased optimism of a Brexit deal over the weekend. Although there has been denial on reports that the EU is making concessions, reignited hopes are hard to put out and that is keeping the pound underpinned as the day begins.
GBP/USD opened with a gap higher at 1.3065 but moved lower to around 1.2990 ahead of European trading. The pair then steadied around 1.3000-10 before moving to 1.2990 again before the release of key UK data. The poor releases saw the pound dip to lows for the day with cable sent down to 1.2970 but has now recovered back to move above 1.3000 again.
The rest of the major bloc traded more in more subdued fashion with EUR/USD hovering around 1.1375 to 1.1400 so far this session and trades near the lows currently ahead of US trading. USD/JPY also range-traded for the most part hovering around 113.20-30 for the most part.
The commodity bloc traded rather flatly against the dollar so far on the day with USD/CAD seeing price stay around 1.3100 before climbing to a high of 1.3113 where it trades close to currently.
AUD/USD started off around 0.7185 but steadied around 0.7190 levels as the session began and then moved to around 0.7210 before falling back to just under 0.7200 currently. NZD/USD was rather resilient as the kiwi pared earlier losses as risk improved a little on the day. The pair started the session around 0.6640 levels but now steadies itself close to 0.6660.
It's a rather quiet start to the week with risk looking a little flat ahead of the US midterm elections tomorrow. Plenty of fun and games to come still on the week but for now, expect the tepid tones to continue throughout the day. If anything, just watch out for headline risks. It's going to be that kind of day.