Foreign exchange information from the European buying and selling session – 16 October 2020

Headlines:

Markets:

  • EUR leads, AUD lags on the day
  • European equities increased; E-minis up 0.3%
  • US 10-year yields down 0.Eight bps to 0.724%
  • Gold up 0.1% to $1,909.95
  • WTI down 0.8% to $40.62
  • Bitcoin down 1.4% to $11,379

EOD 16-10
It was a quiet session for probably the most half however issues actually picked up within the remaining hour after UK prime minister, Boris Johnson, responded to the EU by calling to organize a no-deal Brexit final result by January subsequent 12 months.

That mentioned, he was cautious together with his selection of phrases and commerce talks within the meantime look set to proceed so hopes for a Brexit deal are nonetheless very a lot alive.

On the finish of all of it, this week seems to have culminated in additional Brexit posturing by each side as negotiations are set to proceed over the approaching weeks nonetheless.

The pound was buying and selling increased in hopes that Johnson will explicitly state that talks will likely be prolonged, with cable rising to 1.2960 earlier than struggling a fast drop to 1.2865 after Johnson mentioned that the UK will goal for an Australia-style deal i.e. no-deal final result.

Thereafter, the barrage of headlines noticed the pound moderately whippy round 1.2880 to 1.2920 and is settling a little bit on the upper facet presently as Brexit talks ought to proceed.

Elsewhere, the danger temper was largely tepid however improved barely after Pfizer introduced that they might apply for emergency use of their vaccine in late November.

The greenback is mildly weaker as such with EUR/USD rising from 1.1710 to 1.1740 whereas AUD/USD pared a few of its early losses from 0.7075 to 0.7090.

Trying forward, the pound will stay a key focus for now however count on shares and threat to take cues from any extra US stimulus headlines forward of the weekend.