Forex news from the European trading session - 29 March 2021
Headlines:
- Italy set to cut economic growth projections for the year - report
- Russia reportedly supports rollover of OPEC+ oil production to May
- Japan FSA official says that Nomura still has positions to unwind
- Bitcoin jumps as Visa is said to allow payment settlements using cryptocurrency
- UK February mortgage approvals 87.7k vs 95.0k expected
- SNB total sight deposits w.e. 26 March CHF 702.7 bn vs CHF 702.9 bn prior
- Suez Canal update: Stem of Ever Given ship said to still be stuck
- Suez Canal authorities confirm that Ever Given has been successfully refloated
- New Turkish central bank chief says that April rate cut is not guaranteed
- Germany reports 9,872 new coronavirus cases, 43 deaths in latest update
Markets:
- GBP leads, EUR lags on the day
- European equities slightly higher; E-minis down 0.5%
- US 10-year yields down 3.4 bps to 1.643%
- Gold down 0.4% to $1,726.15
- WTI up 0.7% to $61.42
- Bitcoin up 5.4% to $57,828
It was a relatively quiet session overall as the market is still digesting the whispers over the weekend with the mystery seller behind the block trade on Friday being unveiled as Archegos Capital - with some spillover impact to banks revealed.
Nomura and Credit Suisse are the two names that stand out and while it is unusual to see the 'big boys' take a material hit from trades going wrong, the nature of the blowup is not likely to be a systemic issue and one that leads to contagion risk.
Still, the anxiety and uneasiness is weighing on banking stocks in Europe and US futures have kept lower throughout the session. That despite Treasury yields keeping lower with 10-year yields seen down a little over 3 bps to 1.643%.
But overall risk tones are more mixed with European equities largely brushing off the pessimism outside of the pain from the banking sector.
Efforts to unblock the Suez Canal also took a positive step with the Ever Given ship being partially refloated. Oil fell by 2% at the lows on the headlines to $59.50 but has recovered strongly to move back above $61 currently with OPEC+ in focus.
In FX, the mood was calmer as the yen gave back early gains and little change observed apart from pound strength in general. The quid pushed to fresh highs in over a year against the euro and that underpinned the currency across the board.
EUR/GBP fell past 12 February support @ 0.8536 to near 0.8500 and is keeping thereabouts ahead of North American trading.
The dollar kept steadier in general and with EUR/USD still tracking below 1.1800, dollar bulls are still keeping more poised ahead of month-end, quarter-end trading.
