Forex news from the European trading session - 30 September 2020
Headlines:
- US MBA mortgage applications w.e. 25 September -4.8% vs +6.8% prior
- China reportedly preparing to launch antitrust probe into Google
- ECB's Kazimir: Risks of deflation in the euro area are balanced
- BOE's Haldane: None of the conditions for negative rates have been satisfied
- Germany September unemployment change -8.0k vs -7.0k expected
- ECB's Lagarde: Make-up strategies on inflation should be examined
- ECB's Lagarde: Low inflation poses fundamental challenges
- ECB's Muller: Not worried about the outlook for the euro
- SNB spent CHF 90 billion on interventions in H1 2020
- France September preliminary CPI +0.1% vs +0.2% y/y expected
- UK September Nationwide house prices +0.9% vs +0.5% m/m expected
- UK Q2 final GDP -19.8% vs -20.4% q/q prelim
- Germany August retail sales +3.1% vs +0.4% m/m expected
- US futures extend fall after presidential debate
Markets:
- USD leads, CHF lags on the day
- European equities lower; E-minis down 0.5%
- US 10-year yields down 0.3 bps to 0.646%
- Gold down 0.7% to $1,885.70
- WTI down 1.0% to $38.90
- Bitcoin down 0.5% to $10,703
The session began with a focus on the chaos of the US presidential debate, which did little to soothe markets in general. US futures stumbled and that led to light bids in the dollar and yen, which have been maintained for the most part throughout.
The key takeaway from the debate was that the only certainty over the next few weeks is uncertainty and with no confident signs of economic stimulus in sight, it isn't making for a pretty outlook ahead of October.
The dollar gained some ground as AUD/USD eased from 0.7120-30 to 0.7100 and EUR/USD fell from 1.1730 to a low of 1.1694, easing below its 200-hour moving average.
GBP/USD also kept softer in a fall from 1.2850 to 1.2806 but buyers are keeping a slight defense of the 200-hour moving average amid some Brexit hopes.
USD/JPY was initially firmer in a fall from 105.60 to 105.44 before bouncing back from its 100-hour moving average to 105.70 levels seen currently.
Elsewhere, gold stayed softer as it backs away from its 200-hour moving average near $1,900 and the firmer dollar is also keeping near-term price action more neutral for now.
Looking ahead, month-end and quarter-end flows will be a key focus as we look to wrap up the September month and Q3 trading.
That will keep dollar sentiment more shifty in the session ahead with Wall Street also having to digest the chaos from the debate last night and also news that China is launching a probe on Google, before readying up for the US jobs report on Friday.
