Forex news from the European morning session - 9 October 2019
Headlines:
- US MBA mortgage applications w.e. 4 October +5.2% vs +8.1% prior
- Boris Johnson wins Scottish ruling over Brexit extension letter
- EU official dismisses earlier report, says "no bold new offer is coming"
- China reportedly said to propose increased agricultural purchases to ease trade war
- DUP's Donaldson: We would clearly oppose reported EU compromise offer
- Brexit: DUP said to have already shot down latest EU concession offer
- China reportedly said to be open to partial US trade deal despite tech blacklist
- Pound jumps on report that EU is said to be ready to make major Brexit concession
- ECB's de Guindos: Inflation expectations are not de-anchoring
- China foreign ministry: Not aware of reports on US visa restrictions
- China reportedly may restrict visas for US visitors with anti-China links
- Shanghai sports federation says will cancel NBA fan event scheduled for today
Markets:
- NZD leads, JPY lags on the day
- European equities higher; E-minis up 0.8%
- US 10-year yields up 2.4 bps to 1.553%
- Gold down 0.2% to $1,502.70
- WTI up 0.9% to $53.10
- Bitcoin up 0.6% to $8,181
It's been a bit of solid session for risk assets as the rumour mill churns out a couple of noteworthy headlines amid what would've been a slower session otherwise.
Reports of a China showing poise to seek a partial/interim deal with the US helped to give equities and bond yields a boost, with the yen pressured as a result. US futures jumped up from gains of 0.3% to just over 1.0% on the headlines before settling down.
USD/JPY inched higher amid the news, moving from 107.25 to 107.40 and is holding just under there ahead of North American trading.
The pound was also a notable mover as it jumped on a report that the EU is said to offer a "major" concession on the Irish backstop. Cable moved to a high of 1.2291 before being brought back to reality as the DUP shoots down the reported offer.
Cable turned flat again around 1.2220 and is sitting around those levels despite a weaker dollar across the board.
FOMC meeting minutes and Fed chair Powell's speech later today remain key focal points and that has seen the dollar lose some ground amid positioning flows.
EUR/USD moved up from 1.0965 to 1.0990 while the aussie and kiwi extended gains against the greenback as well amid a more positive risk mood so far today.
Looking ahead, the key risk events above will be the ones to watch out for but just be wary of more potential trade and Brexit flip flop in the mean time.
