Forex news from the European trading session - 20 October 2020
Headlines:
- European Commission says willing to intensify Brexit talks with the UK
- BOE's Vlieghe: Tiering has been effective in getting the benefits of negative rates, while reducing costs
- Brexit: EU, UK chief negotiators Barnier and Frost to talk again later today
- BOE's Vlieghe: Not yet at a point where we can reach a conclusion on negative rates
- BOJ to consider changing inflation forecasts amid government travel campaign - report
- Eurozone August current account balance €19.9 billion vs €16.6 billion prior
- Germany September PPI +0.4% vs -0.1% m/m expected
- Germany reports 6,868 new daily coronavirus cases in latest update today
Markets:
- EUR leads, NZD lags on the day
- European equities mixed; E-minis up 0.6%
- US 10-year yields up 1.2 bps to 0.781%
- Gold flat at $1,905.00
- WTI flat at $40.80
- Bitcoin up 0.4% to $11,780
After the late fizzle in US stocks yesterday, all eyes are staying on the risk mood and stimulus talks once again today. The market appears to be in a mixed mood so far but US futures have trimmed some of the decline from yesterday to get things started.
But the overall mood in Europe was more hesitant, with regional stocks trading more mixed but Treasury yields are inching a little higher and that is weighing slightly on the yen.
In the currencies space, the mood is very much mixed as well with the dollar keeping an advance against the aussie and kiwi but faltering against the euro and franc.
The pound saw a more choppy session with cable bouncing off a low of 1.2920 to hit a high of 1.2979 and testing the 200-hour moving average before falling to 1.2920-30.
EUR/USD maintained a modest push higher from 1.1770 to 1.1818 while USD/JPY also steadily climbed from 105.45 to near session highs close to 105.70 currently.
AUD/USD was weighed lower following more dovish remarks by RBA Kent earlier, and the aussie couldn't get off the floor as it continues to linger near three-week lows against the dollar with the pair falling from 0.7040 to 0.7026.
NZD/USD is also weighed down below its 100-day moving average @ 0.6585 as it traded around 0.6553 to 0.6665 for the most part on the session.
There are conflicting signals about stimulus talks as we head towards North American trading but there's pretty much 100% certainty that there isn't going to be a pre-election deal so let's see how the market will digest that headline when the time comes.
Risk may be holding steadier for now but let's see if we will get another late rock similar to yesterday later in the trading day.
