Forex news from the European trading session - 7 October 2020
Headlines:
- US MBA mortgage applications w.e. 2 October +4.6% vs -4.8% prior
- UK government reportedly close to closing hospitality venues in much of northern England
- Ireland's Coveney: UK should not underestimate how strongly EU feels on fishing issue
- Ireland's Coveney: No back room talks about extending Brexit transition period
- Ireland's Coveney: UK stance on state aid in Brexit talks is 'very problematic'
- Germany August industrial production -0.2% vs +1.5% m/m expected
- Germany reports 2,828 new coronavirus cases, another 16 deaths in latest update
Markets:
- AUD leads, JPY lags on the day
- European equities a little lower; E-minis up 0.5%
- US 10-year yields up 4 bps to 0.775%
- Gold up 0.5% to $1,886.80
- WTI down 2.8% to $39.53
- Bitcoin up 0.5% to $10,600
It was a largely quiet session with the early focus being on Trump walking back his hard talk on stimulus yesterday, urging Congress for some piecemeal action.
That has helped to keep US futures in a slightly better mood so far today, though European equities are largely playing catch-up to the decline from US stocks overnight.
The slight retracement in US futures is leading the dollar slightly lower, though the yen is the laggard as we see Treasury yields climb back higher after the drop yesterday.
10-year yields are up by 4 bps to 0.775% and that helped to see USD/JPY break near-term resistance at 105.80 to hit a three-week high just above 106.00.
EUR/USD buyers also wrestled back near-term control in a push from 1.1740 to 1.1775.
Meanwhile, the pound continues to be dogged by pessimistic Brexit headlines with Irish foreign minister Coveney the one to spoil the party a little today.
Cable moved up from 1.2890 to 1.2930 before being knocked lower to 1.2850 as sellers are trying to establish a more near-term bearish bias during the session.
Elsewhere, gold posted early gains close to $1,900 as the dollar eased but is keeping modest gains around $1,885-90 for the most part currently.
It looks like once again North American traders will be having most of the fun, with US stimulus talk and election focus set to steal the limelight in trading today.
