Forex news from the European trading session - 7 December 2020
Headlines:
- Brexit: von der Leyen to speak with Boris Johnson later today; negotiations could continue until Wednesday
- Brexit: EU, UK have not bridged significant differences, says senior EU diplomat
- China halts beef imports from Australian firm, Meramist Pty
- Eurozone December Sentix investor confidence -2.7 vs -7.8 expected
- SNB total sight deposits w.e. 4 December CHF 705.3 bn vs CHF 706.5 bn prior
- Brexit: Talks likely to conclude today if there is no further progress - UK official
- Uk Johnson's ready to pull out of talks within 'hours'
- Brexit: Barnier reportedly mentions that there is no breakthrough on fisheries
- Brexit: Barnier reportedly told EU envoys that there is no deal yet
- BOJ takes over as the largest 'whale' in Japan
- Germany reports 12,332 new coronavirus cases in latest update today
Markets:
- USD leads, GBP lags on the day
- European equities lower; E-minis down 0.4%
- US 10-year yields down 2.3 bps to 0.942%
- Gold down 0.4% to $1,832.10
- WTI down 1.0% to $45.78
- Bitcoin up 2.2% to $19,237
It was all about Brexit during the session as the pound got hammered by the fact that a breakthrough continues to prove to be elusive since the weekend.
Early reports that there might be a compromise on fisheries were refuted as cable sank from 1.3430 to 1.3390 before dropping all the way to 1.3225 as hopes for a deal today fade and odds of a no-deal outcome start to resurface.
That said, there is still plenty of political theater going on surely and the deadline continues to be stretched with Barnier reportedly now giving it until Wednesday.
Do be reminded that this is the same deadline to resolve the key outstanding issues since the start of the year, just to put things into context.
Elsewhere, US stimulus hopes were overshadowed by more US-China tensions. However, the risk retreat is arguably also more to do with a pullback after last week and the recent rally in equities all the way through November and last week.
Amid year-end trading and some plausible reason to consolidate gains (pause for a breather), this should still end up being nothing more than a correction in the long-term.
The dollar managed to recoup some ground as such, before gains eased up a little as we look towards North American trading now.
EUR/USD fell to a low of 1.2079 below its 100-hour moving average before climbing back up to 1.2110 levels currently.
AUD/USD also retreated to a low of 0.7373 before sticking closer to 0.7400.
It was an unfortunate day for me personally, as I just got my new PC fixed over the weekend only for it to get blown up by lightning half-way during the session. Oh well.
Such is life sometimes I guess. There are days we win, there are days we lose. And there are days where things just aren't mean to be and we are unlucky.
