Forex news from the European morning session – 3 December 2019
- GBP leads, EUR and CAD lag on the day
- European equities mixed; E-minis down 0.3%
- US 10-year yields down 2.8 bps to 1.791%
- Gold up 0.4% to $1,468.59
- WTI down 0.3% to $55.81
- Bitcoin down 0.4% to $7,287
Markets were initially more steady to start the day with the yen sitting a little weaker and the likes of the aussie and kiwi underpinned. The latter was helped by the RBA keeping its cash rate steady but things all changed when Trump started speaking in London.
Trump mentioned that a trade deal with China has ‘no deadline’ and could even come after the US election next year and that set off a wave of risk aversion across markets.
USD/JPY slipped from 109.10 to 108.81 as bond yields also fell across the curve. US futures erased gains to fall as much as ~0.4% before finding a bottom for the time being.
That said, the risk mood remains more glum than when we started the session and it’s more of a case that traders are seeing things from a perspective that the glass is now half empty rather than the glass being half full earlier today.
As such, AUD/USD eased up on gains falling from 0.6862 to 0.6840 levels with NZD/USD also scaling back a bit from 0.6533 to 0.6510 levels.
The pound though continues to stay perky amid some mild softness in the dollar with cable threatening a break of the 1.3000 handle. A UK opinion poll continues to favour the Tories ahead of next week’s vote and that isn’t hurting sentiment whatsoever either.
Looking ahead, it’s still largely about the risk mood as markets will have to digest Trump’s comments and how that will factor into overall trade negotiations as well as the implications for the US economy going into next year.
Other than that, I would say be wary of cable running stops above 1.3000-10 as buyers continue to look poised in chasing an upside break.