European trading news - November 07
Intro
- Carney press conference after BoE remains on hold
- GBPUSD sits at 1.2800 support level ahead of BoE's Carney presser
- BOE leaves bank rate unchanged at 0.75%
- GBPUSD rejecting descending trendline on 1 hr chart ahead of BoE at 1200GMT
- China considering removing US poultry import restrictions
- Bank of England preview for their 1200GMT interest rate meeting
- AUDJPY moves into recent highs, expect profit taking now
- US oil seeing some bids (but muted reaction)
- Latest YouGov polls show Conservative party lead drops
- Copper set to gain if latest trade remarks are confirmed by the US
- European stocks futures extend gains after China's conciliatory remarks
- Why did risk suddenly switch to on?
- China ready to negotiate? AUDJPY up on conciliatory remarks
Today's session was considerably more lively with the news from China's Commerce ministry that China is ready to negotiate on how much tariffs can be cancelled and that both sides will cancel tariffs at the same time that a phase one deal is reached. The size of tariff cancellation is still to be negotiated.
This single headline boosted risk on assets. This was unsurprising a the market had paused yesterday waiting for a reason to keep the risk rally going. I was looking at the AUDJPY as my currency pair of choice for buyers and priced moved up into obvious near term resistance where it saw some profit taking.
We saw an uptick in equities, bond yields, US futures, oil prices and some downticks in Gold as you would expect on risk on flows.
There was also some German manufacturing data out, but nothing to change the bleak picture that the Eurozone is struggling. The market was focused on the risk on trade anyway, so ho hum to the euro growth story. The EU commission published their report during the session which we knew already - low growth and inflation setting into the eurozone.
These risk on tones flowed through the morning session with the next event being the Bank of England's rate meeting. Rates remained unchanged, as expected. However, there were two dissenting voters who wanted a 25bps rate cut; Saunders and Haskell. The result was immediate GBPUSD downside, but key support at 1.2800 is holding for now on cable.
