Forex news from the European morning session - 30 May 2019
Headlines:
- Germany reportedly will veto Brexit extension beyond October unless UK makes major progress
- Labour's Corbyn: Our first priority is an election
- China reportedly puts US soy purchases on hold as trade war escalates
- China says that it will fight till the end if US keeps escalating tensions
- China says that it won't accept a deal that hurts sovereignty, pride
- Spain May preliminary CPI +0.2% vs +0.4% m/m expected
- PBOC's Sun says that China's economy is stable despite global uncertainties
- BOJ's Sakurai: Don't think yield moves require action for now
Markets:
- CAD leads, JPY lags on the day
- European equities mildly higher; E-minis up 0.3%
- US 10-year yields flat at 2.261%
- Gold down 0.2% to $1,277.40
- WTI down 0.1% to $58.77
- Bitcoin up 0.8% to $8,716
Major currencies are barely changed on the day with the dollar holding steady for the most part as markets - especially the bond market - are sitting on edge ahead of North American trading. Yesterday we saw a late recovery of sorts but it hasn't translated to much optimistic sentiment to start the new day.
Equities are mildly higher and that's helped to inject some weakness into the yen with USD/JPY holding around 109.60-80 levels for the most part. Large expiries are also seen at 109.75 so that perhaps is helping to keep price action at current levels.
Meanwhile, the loonie extends its advance after recouping losses from overnight trading following the BOC meeting. USD/CAD slips back below the 1.3500 handle and it reflects the indecisive mood in markets as price enters back the 1.3400 to 1.3500 range.
Other than that, most major currencies are holding steady for the most part (minimal changes against the dollar, less than 0.1%) with the kiwi and aussie erasing mild gains from earlier in the session. That said, trading ranges remain tight as currencies won't break away unless we get confirmation from the bond market.
Looking ahead, there's still plenty to play for as focus will turn again towards the bond and equities market and how they digest a whole bunch of US releases later including the second reading of US Q1 GDP data.
