Forex news from the European morning session - 21 June 2019
Headlines:
- Draghi said to have told EU leaders that additional stimulus may be needed
- Fed's Clarida: Our mandate is assigned by Congress
- Fed's Clarida: We're in a world of lower inflation
- Fed's Bullard on dissent: Feels that factors behind weak inflation unlikely to be transitory
- Trump reportedly gave overnight warning of an imminent attack on Iran
- Japan's Asakawa says that forex volatility is not positive
- Eurozone June flash manufacturing PMI 47.8 vs 48.0 expected
- Germany June flash manufacturing PMI 45.4 vs 44.6 expected
- France June flash manufacturing PMI 52.0 vs 50.8 expected
- BOE's Carney: Many UK businesses are still unprepared for Brexit
- Yields, yields, yields... Where are they at now?
Markets:
- EUR leads, NZD lags on the day
- European equities mixed; E-minis down 0.2%
- US 10-year yields down 0.5 bps to 2.023%
- Gold up 0.6% to $1,397.23
- WTI up 0.8% to $57.50
- Bitcoin up 2.5% to $9,798
It was a calmer session for markets in general but one that was underscored by a steadier US dollar for the most part. The greenback notably advanced against the likes of the pound, aussie and kiwi after a beat down suffered over the past few sessions following the FOMC meeting on Wednesday.
The euro is the lead gainer though as the single currency advanced on more optimistic euro area PMI data from France and Germany. EUR/USD climbed from 1.1290 to highs of 1.1318 and is settling just under there ahead of North American trading.
Meanwhile, the yen weakened slightly as USD/JPY climbed from 107.10 levels to 107.50 amid an improvement in risk tones with US equity futures paring some of its earlier losses while Treasury yields gained some ground as well during the session.
Gold was a notable mover as well falling from $1,400 levels to a low of ~$1,382 as the risk mood improved mid-way through the European morning before settling higher again following Fed vice chair Clarida's remarks, which bore no suggestions that the Fed isn't comfortable with a 25 bps rate cut in July.
There's a bit of everything in markets today but I reckon we're seeing a bout of profit taking ahead of the weekend and that's likely a similar story in the equities and bonds space as well. I mean, can you really say that you're comfortable with risk into the weekend these days? Especially when we have US-China trade talks soon to come next week and geopolitical tensions between US and Iran still brewing.