Forex news from the European morning session - 19 June 2020
Headlines:
- EU leaders reportedly said to be 'not moving' on recovery fund proposal
- Merkel warns EU leaders of "very, very difficult times", cautions on recovery fund
- BOJ also announces similar change to Fed swap line
- ECB, SNB, BOE announce change to Fed swap lines
- What impact will the witching hour have today?
- South Korea central bank says it has no plans to extend Fed swap lines further
- China says it plans to accelerate purchases of US farm goods - report
- UK May public sector net borrowing £54.5 billion vs £49.3 billion expected
- UK May retail sales +12.0% vs +6.3% m/m expected
Markets:
- AUD leads, GBP lags on the day
- European equities higher; E-minis up 0.8%
- US 10-year yields up 0.7 bps to 0.715%
- Gold up 0.5% to $1,731.02
- WTI up 2.5% to $39.80
- Bitcoin up 0.3% to $9,370
It was a relatively quiet session with major currencies staying subdued for the most part, but stocks nudged higher on a report that China is stepping up US farm purchases.
That came right before the European cash market opened, resulting in decent gains which were held as equities kept up the better risk sentiment. US futures moved up from 0.2% to a little over 1% and is holding most of its advance during the session.
The aussie was a little perky as a result, moving up from 0.6860 to 0.6880 but is falling short of breaking its 100-hour moving average against the dollar.
Meanwhile, the euro and pound continued to stay more subdued with the former still testing the 1.1200 handle against the greenback for the most part with discussions among EU leaders on the recovery fund not seen going anywhere today.
The pound though is struggling to stay afloat as cable falls to fresh lows under 1.2400 since 1 June with EUR/GBP touching its highest levels since late March above 0.9055.
Elsewhere, oil continues to stay perky in trading this week as WTI touched above $40 for the first time since last Monday but is keeping just under that now.
Looking ahead, quadruple witching may offer a kick in volatility ahead of the weekend but also be mindful once again of US states' coronavirus cases/hospitalisations.
