Forex news from the European trading session - 19 November 2021
Headlines:
- BOE's Pill: I genuinely don't know how I will vote in December
- PBOC reaffirms that will continue to implement stable monetary policy
- Austria confirms to enter into nationwide lockdown starting from Monday
- Fitch downgrades yet another Chinese property developer
- German health minister Spahn: We are in a national emergency
- Japan Cabinet approves the ¥55.7 trillion fiscal stimulus package
- ECB's Lagarde: It does not make sense to tighten policy when inflation pressures are expected to fade
- ECB's Lagarde: Inflation drivers are to fade over the medium-term
- Germany October PPI +3.8% vs +1.9% m/m expected
- UK October retail sales +0.8% vs +0.5% m/m expected
- No vote on Biden's bill tonight, House to reconvene tomorrow at 8am local time
Markets:
- JPY leads, EUR lags on the day
- European equities lower; S&P 500 futures down 0.2%
- US 10-year yields down 6.6 bps to 1.520%
- Gold up 0.2% to $1,861.60
- WTI down 3.3% to $76.36
- Bitcoin down 0.6% to $57,250
The pandemic isn't over and we got a reminder of that today as Austria becomes one of the first few countries - if not the first - to resume a nationwide lockdown after months of reopening following the vaccination campaign.
The virus situation in Germany is also worsening and health minister Spahn riled markets up even more by refusing to rule out a return to lockdown measures.
The headlines there put a big dent on market sentiment today, which was holding up rather well at the start of European morning trade.
European indices pared early gains as US futures also fell, before those losses intensified after some pushing and pulling in the past few hours.
Of note, the wave of risk aversion across the market also put a major drag on bond yields with 10-year Treasury yields sinking by 6.6 bps on the day to 1.52% while 30-year German bund yields dropped into negative territory for the first time since August.
In turn, that saw the yen benefit the most alongside the dollar in the FX space.
USD/JPY took a plunge from 114.50 to 113.90 initially before extending a drop towards 113.61 and is keeping near the lows for the day currently.
Meanwhile, the euro is the currency punished the most with EUR/CHF falling past key resistance of 1.0500 (knock, knock SNB) for the first time since 2015 while EUR/USD dropped from 1.1340 to 1.1280 during the session.
The dollar gained on a risk-off mood with GBP/USD also falling from 1.3500 to 1.3410 before keeping around 1.3420-30 levels now.
Elsewhere, USD/CAD made a move up from 1.2600 to 1.2660 while AUD/USD slumped to its lowest in over six weeks in a drop from 0.7280 to 0.7230.
As pandemic fears reverberate, oil is among the biggest losers on the day as it is down by over 3% to $76.36 after having encountered recent technical exhaustion as well.
