Forex news from the European morning session - 26 March 2021
Headlines:
- Ifo economist: German GDP should contract by 0.7% q/q in Q1
- German health minister warns that healthcare capacity could reach its limit in April
- Germany March Ifo business climate index 96.6 vs 93.2 expected
- China imposes anti-dumping tariffs on Australian wine
- UK February retail sales +2.1% vs +2.1% m/m expected
- PBOC sees China potential growth at 5% to 5.7% in the next five years
- Germany reports 21,573 new coronavirus cases, 183 deaths in latest update today
Markets:
- NZD leads, JPY lags on the day
- European equities higher; E-minis up 0.2%
- US 10-year yields up 4.1 bps to 1.674%
- Gold down 0.1% to $1,725.10
- WTI up 2.8% to $60.20
- Bitcoin up 1.4% to $52,725
The market is keeping a more optimistic mood ahead of the weekend, as equities push higher in Europe and remain unperturbed despite Treasury yields creeping higher as well.
There is more of a risk-on flavour to things as commodity currencies lead the charge while the dollar and yen are laggards in the major currencies space.
AUD/USD kept gains above 0.7600 around 0.7610-20 levels on the session while EUR/USD pushed up to 1.1797 before retreating to 1.1770 levels as the dollar retreats after having posted modest gains on the week so far.
The yen is the major laggard as USD/JPY even climbed to fresh highs since June last year, and is now testing the highs then @ 109.75 ahead of North American trading.
The pair moved up from 109.30 at the start of the session, with yen crosses also pushing higher. AUD/JPY moved up from 83.20 to 83.53 while CAD/JPY broke above 87.00.
The Suez Canal disruption is said to take at least a week to resolve and that is buoying oil prices as it trades back up by nearly 3% higher above $60 again.
All in all, the market is looking cheerful for now but we'll see if Wall Street can keep up the more positive tone before the weekend comes.
Amid month-end and quarter-end rebalancing chatter this week, early gains in equity futures have not been indicative of much so let's see if today will be more straightforward.
