Forex news from the European trading session - 2 November 2021
Headlines:
- Supply issues bringing back pandemic approach to reviewing PMI data
- Eurozone October final manufacturing PMI 58.3 vs 58.5 prelim
- Switzerland October CPI +1.2% vs +1.1% y/y expected
- RBA's Lowe Q&A: I think markets have overreacted to recent inflation data
- RBA's Lowe: It is now plausible that rate hike could be appropriate in 2023
- A couple of takeaways from the RBA today
Markets:
- JPY leads, AUD lags on the day
- European equities mixed; S&P 500 futures flat
- US 10-year yields down 1.9 bps to 1.554%
- Gold down 0.2% to $1,789.09
- WTI down 1.2% to $83.06
- Bitcoin up 4.0% to $63,113
The RBA kicked things off earlier today by ruling out rate hikes in 2022 but kept the door open for a move in 2023, as they also officially put an end to yield curve control efforts.
The aussie is weaker in the aftermath amid the dovish messaging as rate punters were certainly hoping for more, with Lowe stating that markets have overreacted.
AUD/USD eased from 0.7520 to 0.7490 initially before dribbling lower to 0.7455-60 levels at the moment with the dollar also keeping firmer for the most part on the day.
The yen is the standout performer though as bond yields are on the retreat, with US 2-year yields down over 3 bps to 0.48% while 10-year yields are down nearly 2 bps to around 1.55% in European morning trade.
USD/JPY is pinned lower to 113.50-60 levels during the session while other yen pairs saw a stronger retreat with AUD/JPY notably slipping back below 85.00 in a 1% fall.
Equities were more tepid on the session with European indices showing mixed tones as the DAX and CAC 40 climbed while others are struggling a little. US futures pared early losses to keep flattish but all eyes are on the Fed tomorrow to provide more clarity.
Elsewhere, oil is down 1% closer to $83 as the push and pull continues while gold is slightly lower as the dollar holds firmer so far on the day.
