Forex news from the European trading session - 28 October 2021
Headlines:
- Saxony October CPI +4.5% vs +4.1% y/y prior
- Bavaria October CPI +4.6% vs +4.2% y/y prior
- US 2-year yields climb to highest since March last year as curve flattens further
- Germany October unemployment change -39k vs -20k expected
- Spain October preliminary CPI +5.5% vs +4.0% y/y prior
- BOJ's Kuroda: Recent yen weakness isn't a bad thing
- BOJ's Kuroda: Will ease monetary policy further without hesitation if needed
Markets:
- JPY leads, CHF lags on the day
- European equities mixed; S&P 500 futures up 0.3%
- US 10-year yields up 1.4 bps to 1.543%
- Gold up 0.1% to $1,798.50
- WTI down 1.5% to $81.43
- Bitcoin up 3.5% to $60,968
It was a relatively quiet session for FX as action centered around the bond market once again in European morning trade.
The Treasury yield curve flattened further with 2s10s seen at its narrowest since early August as 2-year yields are up nearly 7 bps to 0.56% while 10-year yields are only up by a little over 1 bps to just above 1.54% on the day.
That is keeping the yen a little firmer as USD/JPY hugged 113.50-60 levels on the session.
The dollar is trading little changed and mixed elsewhere with EUR/USD still holding around 1.1590-00 levels for the most part ahead of the ECB later.
USD/CAD is little changed and sticking around 1.2355-70 as sellers are still finding it tough to retain the sharp move lower from the more hawkish BOC tilt yesterday.
Elsewhere, AUD/USD is holding around 0.7500-10 levels as price action is still somewhat caught above key near-term levels but not pushing its 200-day moving average @ 0.7557.
In the equities space, US futures are seen higher after Wall St saw a late setback yesterday with tech stocks leading the charge once again on the day. Nasdaq futures are up 0.5% as risk is still very much holding up going into month-end trading.
