Forex news from the European trading session - 8 October 2020
Headlines:
- ECB: Recent euro appreciation had material impact on inflation outlook in September projections
- Second US presidential debate will be held remotely (virtual debate)
- More US stimulus talk expected in the day ahead
- ECB's de Guindos: Euro exchange rate indirectly affects our reaction function but there's no red line
- BOE's Bailey: We are by no means out of firepower
- BOE's Bailey: UK recovery has been very uneven across the economy
- Germany August trade balance €12.8 billion vs €16.0 billion expected
- Switzerland September unemployment rate 3.2% vs 3.3% expected
- Germany reports 4,058 new daily coronavirus cases, the most since 10 April
- BOJ upgrades its assessment for 8 of 9 Japanese regions in latest quarterly report
Markets:
- AUD leads, GBP lags on the day
- European equities higher; E-minis up 0.4%
- US 10-year yields down 1.8 bps to 0.768%
- Gold up 0.2% to $1,891.88
- WTI up 1.9% to $40.70
- Bitcoin down 0.5% to $10,613
There weren't much notable headlines on the session as the market gears up for yet another day where US stimulus talks and the election will steal the focus.
Equities kept more optimistic, carrying on the positive sentiment from yesterday as US futures are keeping higher and that also saw European indices rise during the session.
However, Treasuries were also bid and that sees 10-year yields slightly lower by 1.8 bps to 0.768% currently ahead of North American trading.
The mood among major currencies was more muted as the dollar steadied after some mild weakness at the start of European morning trade earlier.
EUR/USD inched higher to 1.1782 before slipping back towards its 100-hour moving average now around 1.1755-60, but rests within a 30 pips range today.
GBP/USD buyers tried to push the pair higher but only as far as 1.2970 before retreating all the way back down 1.2900 and testing its 200-hour moving average.
The pound may be staying more resilient but Brexit pessimism is still offering some potential downside nudges ahead of the EU council meeting next week.
Elsewhere, AUD/USD kept firmer through around 0.7150-70 but not really moving back towards 0.7200 while USD/JPY trades within a 17 pips range around 106.00.
Looking ahead, Mnuchin and Pelosi will once again meet for more stimulus talks so that is keeping the market hoping. But election polls are also a consideration, as they continue to point towards a potential 'blue sweep' come November.
