Forex news from the European trading session - 20 October 2021
Headlines:
- US MBA mortgage applications w.e. 15 October -6.3% vs +0.2% prior
- ECB's Lagarde says that immensely regrets Weidmann's resignation
- Eurozone September final CPI +3.4% vs +3.4% y/y prelim
- Buba president Weidmann has requested to leave position at the end of the year
- Iraq oil minister says that expects oil prices to reach $100 in 1H 2022
- ECB's Villeroy: Inflation spike is expected to be temporary
- Japan stresses on exchange rate stability amid the yen's recent decline
- Germany September PPI +2.3% vs +1.0% m/m expected
- UK September CPI +3.1% vs +3.2% y/y expected
Markets:
- NZD leads, GBP lags on the day
- European equities mildly higher; S&P 500 futures flat
- US 10-year yields flat at 1.634%
- Gold up 0.6% to $1,778.94
- WTI down 1.1% to $82.00
- Bitcoin down 0.5% to $63,836
It was mostly a quiet session in Europe once again as markets kept steadier in general with equities and bonds little changed for the most part.
The dollar was mildly softer earlier on but is now trading more mixed, with the pound tracking lower as cable backs away from key resistance near 1.3800.
The most notable headline on the session was Bundesbank president Jens Weidmann stepping down five years before his term was due to end - joining a host of previous German ECB members who have done the same in the past.
Inflation data was the focus in terms of releases and while UK CPI missed slightly on estimates, German PPI and Eurozone CPI reaffirmed that price pressures are still surging in the region and that continues to chip away at the 'transitory' narrative.
Going back to FX, EUR/USD eased from 1.1650 to 1.1620 while GBP/USD climbed down from 1.3810 to 1.3745 and is contesting its 100-hour moving average currently.
AUD/USD also trimmed gains from 0.7500 to 0.7480 while NZD/USD backed away from highs close to 0.7180 to 0.7160 levels at the moment.
Yen pairs are still looking buoyed for the most part, even as USD/JPY is keeping flattish around 114.30-40 levels on the session after slipping from 114.60 earlier in the day.
It's still all about the mix between technicals and the ebb and flow in trading this week, with risk sentiment also part of the consideration amid the lack of key risk events.
