Forex news from the European trading session - 5 October 2020
Headlines:
- Eurozone August retail sales +4.4% vs +2.5% m/m expected
- UK September final services PMI 56.1 vs 55.1 prelim
- SNB total sight deposits w.e. 2 October CHF 705.1 bn vs CHF 704.5 bn prior
- Eurozone September final services PMI 48.0 vs 47.6 prelim
- von der Leyen self-isolating after meeting contact tested positive for COVID-19
- Germany's Maas: Many questions remain open in Brexit negotiations
- BOJ's Kuroda: Japanese economy in severe condition but picking up
- BOJ: Japan's output gap turns negative for the first time since 2016
Markets:
- CHF leads, JPY lags on the day
- European equities higher; E-minis up 0.7%
- US 10-year yields up 1.3 bps to 0.714%
- Gold flat at $1,899.40
- WTI up 4.5% to $38.75
- Bitcoin up 1.3% to $10,690
It was a largely quiet session as the focus stayed on news from the weekend surrounding Trump's health, with suggestions that he might get out of the hospital today.
He delivered a video message and went for a drive-by to ease worries about his condition, and that arguably helped to eliminate some degree of uncertainty from last Friday.
US futures opened higher and maintained gains throughout, with European indices following suit. Major currencies also observed a similar risk-on theme with the dollar and yen trailing behind the rest of the bloc as a result.
USD/JPY inched higher from 105.50 to 105.68 to erase losses from the end of last week.
Meanwhile, EUR/USD advanced from 1.1730 to 1.1759 while GBP/USD recovered from an early setback in a move higher from 1.2900 to 1.2965 before easing back a little.
AUD/USD kept firmer around 0.7170-80 levels but is still finding it tough to take a crack at the 0.7200 handle. NZD/USD continues to sit little changed at 0.6640-50.
With little key items on the agenda to start the week, the focus in the market will start to gear towards how the US election race is shaping up once again and how much can we "move on" from Trump's virus/health situation.
For now, the market looks to be wanting to retrace the moves from Friday but we'll have to see to what extent the bounce so far today will jump.
