Forex news from the European morning session - 9 May 2019
Headlines:
- Labour's Corbyn: Government has made no big offer in Brexit talks
- CBRT decides to suspend its 1-week repo auctions
- BOE's Saunders: Sterling would probably fall after no-deal Brexit
- China says that it firmly opposes sanctions against Iran
- North Korea said to have fired unidentified projectile
- China says that accusations on intellectual property theft are unreasonable
- China says it is fully prepared to defend its interest, has determination to do so
- Spain March industrial production -1.2% vs +0.3% m/m expected
Markets:
- JPY leads, AUD lags on the day
- European equities lower; E-minis down 0.6%
- US 10-year yields down 3 bps to 2.45%
- Gold up 0.2% to $1,283.52
- WTI down 0.3% to $61.95
- Bitcoin up 2.2% to $6,031
It was a somewhat quiet session overall as markets remain fearful and jittery on trade tensions between US and China. The delegation from Beijing is to arrive in Washington later today, where we will see trade talks begin.
China continued to reiterate that they are ready to respond if the US does follow through on its tariffs threat, and that gave risk assets a bit of a nudge lower in the session earlier. USD/JPY fell from around 109.80-90 levels at the start of the European morning to a low of 109.60 before recovering a little now towards 109.85.
US equity futures continue to sit about 0.6% lower, after having dipped to losses of about 0.9% at one point, while 10-year Treasury yields are lower by 3 bps on the day; both helping to keep the yen underpinned.
The dollar also gained some ground in the early morning, where cable notably fell from 1.3010 to a low of 1.2976 as the pound also stayed weak on cross-party Brexit talks failing to make any progress still.
EUR/USD fell from around 1.1190 to a low of 1.1174 but has since recovered to near 1.1190 again as the dollar gave back its earlier gains. That also sees USD/CAD and NZD/USD near flat levels on the day now after having moved in favour of the greenback earlier.
The aussie remains the weakest performing major currency, with AUD/USD continuing to hold below the 0.7000 handle. The pair ranged from around 0.6965 to 0.6980 for the most part as the aussie is weighed down by ongoing trade tensions.
Looking ahead, it's still all about risk sentiment and US-China trade talks. So, make sure to keep your eyes and ears peeled for any notable headlines as that will dictate how markets look to wrap up the trading week.
