Forex news from the European trading session - 18 June 2021
Headlines:
- ECB extends leverage ratio relief for banks until March 2022
- EU officially lifts travel restrictions for US residents
- China reportedly considering further shift in birth policy, possibly doing away with restrictions by 2025
- BOJ's Kuroda: Fed could begin tapering given solid economic recovery, rising inflation
- UK May retail sales -1.4% vs +1.5% m/m expected
- Westpac says it sees RBA raising cash rate in early 2023
- Germany reports 1,076 new coronavirus cases, 91 deaths in latest update today
Markets:
- JPY leads, AUD and NZD lag on the day
- European equities lower; S&P 500 futures down 0.2%
- US 10-year yields down 1.9 bps to 1.485%
- Gold up 1.1% to $1,793.50
- WTI down 0.6% to $70.60
- Bitcoin up 0.5% to $37,925
There wasn't much in terms of key headlines on the session, with the market continuing to digest the reverberations following the FOMC meeting on Wednesday.
Treasury yields are falling further with the curve flattening, bolstering the argument that reflation bets are slowly coming off after the Fed this week.
Equities slumped after a more modest showing yesterday while the dollar is keeping steadier as it pushes gains against the pound, aussie and kiwi.
GBP/USD fell from 1.3920 to a low of 1.3855 before recovering a bit of ground and is now holding around 1.3870-80 levels.
Meanwhile, AUD/USD saw a a quick fall early on from 0.7550 to 0.7510 and is holding just above that even as Westpac revised their call for a quicker rate hike by the RBA.
In terms of economic releases, UK retail sales missed on estimates but combined with April figures they aren't looking too bad as detailed in the report (↑).
Elsewhere, gold is holding a decent bounce on the day back to $1,790 but it remains to be seen if buyers can breach the 100-day moving average and $1,800.
As a reminder, it is also quadruple witching day so volatility could be exacerbated ahead of the option expiries later in the day. Have a great weekend, everyone!