Forex news from the European trading session - 21 October 2021
Headlines:
- BOJ reportedly considering to phase out pandemic support if COVID-19 infections continue to fall
- UK October CBI trends total orders 9 vs 18 expected
- Moscow to close all shops except groceries, pharmacies as COVID-19 cases surge
- Central bank focus next week to spark more flames to the inflation debate
- France October business confidence 113 vs 112 prior
Markets:
- JPY leads, NZD lags on the day
- European equities lower; S&P 500 futures down 0.3%
- US 10-year yields up 1.3 bps to 1.671%
- Gold down 0.2% to $1,778.10
- WTI down 0.9% to $82.70
- Bitcoin down 1.8% to $64,813
It was a quiet session for the most part as the dollar kept steadier while commodity currencies fell after an early advance in Asia Pacific trading.
A slightly softer risk mood in European morning trade is perhaps keeping risk trades more guarded as the aussie fell from 0.7540 earlier in the day to 0.7480 before keeping around 0.7490-00 against the dollar currently.
USD/CAD also moved up from a low of 1.2290 at the start of the day to 1.2345 as oil prices are also seen pulling back from fresh 7-year highs overnight.
The dollar is keeping relatively steady with EUR/USD holding around 1.1635-50 while GBP/USD eased from 1.3820 to 1.3790 before keeping around 1.3810 levels now.
The yen is the lead gainer despite bond yields staying elevated as we perhaps see a pullback after the surge higher in yen pairs over the past few weeks.
USD/JPY kept lower in a tighter range around 113.95-10 during the session.
As much as the light pullback in equities may be helping with some slight risk aversion play, it still isn't anything significant in the grand scheme of things especially when you put into context the moves since trading last week.
US equities are still within touching distance of all-time highs and the seasonals also suggest that we could be due a Santa Claus rally in the next few weeks:
As such, even with yen pairs pulling back slightly today, the technical outlook still bodes well so long as the bond market also continues to play ball.
