Forex news from the European morning session - 6 Decem,ber 2019
Headlines:
- OPEC+ said to reach agreement to reduce output target by 500k bpd
- Saudi oil minister: Market will have to trust us
- UK election: Conservatives 44% (unch.), Labour 32% (+4) - Ipsos poll
- Germany October industrial production -1.7% vs +0.1% m/m expected
- China said to start implementing tariff waivers for some purchases of US soybeans, pork
Markets:
- NZD leads, CHF lags on the day
- European equities higher; E-minis up 0.2%
- US 10-year yields down 1.7 bps to 1.793%
- Gold flat at $1,476.05
- WTI down 0.6% to $58.09
- Bitcoin flat at $7,380
For currencies, it's all about the countdown to the US non-farm payrolls report as we see mixed trading on the session amid trade and OPEC headlines.
Risk assets got a minor jolt higher in the early morning after China said that they would look at tariff waivers for some US farm products, though it comes with an indirect caveat.
US futures ticked up and bond yields also crept higher but as the session progressed, we're seeing yields fall back lower and equities keep steady in a bit of mixed trading.
As a result of weaker yields, USD/JPY is dragged lower to be under 108.60 for now and gold is keeping more flat on the session awaiting the US jobs report.
The pound was a notable mover as well with cable sliding to 1.3112 before recovering some poise to keep near 1.3150 for the time being.
The aussie and kiwi remains underpinned with NZD/USD threatening a further breakout above 0.6570 but is keeping cautious going into the US non-farm payrolls release.
As such, the dollar is trading mixed with little change seen against the likes of the euro and loonie. Elsewhere, oil is a bit tepid as OPEC+ looks set to announce additional cuts of 500k bpd but that has been well telegraphed and priced in at this point.
Looking ahead, I reckon markets are keen to act on the smaller themes during the week once we can get through US data without any hiccups. But if there are hiccups to be observed, look towards dollar weakness and risk aversion as we close out the trading week.
