Forex news from the European trading session - 8 April 2021
Headlines:
- ECB's Lagarde: PEPP envelope need not be used in full if favourable financing conditions can be maintained
- UK March construction PMI 61.7 vs 55.0 expected
- ECB's Holzmann: Hopefully can reduce PEPP purchases by the end of Q2
- ECB's Knot: It is okay to frontload bond purchases in case of spillover
- ECB's Lane: Favourable financing conditions must be maintained
- Germany reports 20,407 new coronavirus cases, 306 deaths in latest update today
Markets:
- JPY leads, USD lags on the day
- European equities mixed; S&P 500 futures up 0.3%
- US 10-year yields down 3.2 bps to 1.642%
- Gold up 0.7% to $1,750.50
- WTI down 0.5% to $59.47
- Bitcoin up 0.7% to $56,505
It was a relatively quiet session with equities keeping a touch firmer as Treasury yields stayed on the retreat after a lackadaisical mid-week.
US futures kept higher, led by gains in Nasdaq futures, and that saw market participants keep calmer with 10-year Treasury yields easing a little to 1.64%.
The dollar chopped around a bit but is trading back lower now ahead of North American trading, with the yen leading gains in the major currencies space.
USD/JPY saw a gradual decline from 109.65 to 109.25 as sellers start to push further downside pressure with lower yields helping their agenda.
EUR/USD pushed up from 1.1880 to 1.1893 initially before slipping back to 1.1860 levels, but is now closing back in on its 200-day moving average @ 1.1882.
GBP/USD saw its early advance falter, slipping from 1.3780 to 1.3740 as EUR/GBP attempted to try and break short-term resistance @ 0.8645. The latter failed to breach the technical level and is back down to 0.8630 levels, seeing GBP/USD move back up to 1.3765.
Elsewhere, the aussie and kiwi held modest advances against the greenback with AUD/USD buyers looking to test near-term resistance @ 0.7656-64.
Gold also saw a solid bounce back towards $1,750 but faces some resistance from its 18 March high @ $1,755 at the moment.
It looks like the market is taking in the notion that the higher yields move is stalling for now and there is room for some push and pull in the other direction.