ForexLive European FX news wrap: Dollar keeps steadier, China disappoints again

Headlines:

• The post-election tussle continues to play out
• USD/JPY Technical Analysis – Interesting reversal in the US Dollar
• Chinese yuan falls as NPC announcement lacks oomph so far
• China’s top lawmakers approve plan to swap local government debt
• PBOC says will continue with supportive monetary policy
• France September trade balance -€8.27 billion vs -€7.37 billion prior
• Barclays now sees the Fed cutting interest rates by 25 bps just once next year
• Barclays now sees the BOE holding bank rate unchanged in December

Markets:

• JPY leads, AUD lags on the day
• European equities lower; S&P 500 futures down 0.1%
• US 10-year yields down 2.5 bps to 4.317%
• Gold down 0.7% to $2,687.42
• WTI crude down 1.1% to $71.52
• Bitcoin up 0.1% to $76,066

The post-election musings are continuing in markets, with traders still sorting out their feet after Trump’s win.

There hasn’t been too much follow through after the initial rush into Trump trades, with some mixed sentiment in play today as well. Treasury yields are once again nudging lower and that is keeping the dollar somewhat in check.

USD/JPY is down 0.3% to 152.50 but off earlier lows of 152.15, though the dollar is holding modestly higher elsewhere.

EUR/USD is down 0.3% to 1.0770 and GBP/USD down 0.3% to 1.2955 at the moment. The antipodeans are the laggards as China once again disappointed in terms of stimulus announcement.

After the NPC session today, Beijing only directed their attention to ¥6 trillion worth of stimulus to resolve local government debt risks. There wasn’t any additional announcements and that is weighing on the yuan as well as China-related assets like iron ore and copper.

AUD/USD was weighed down as well with the pair down 0.8% to 0.6623currently.

Besides that, equities are holding more tentative in continuing the rush higher to end the week. US futures are marginally lower and European indices are pulled back lower again amid the push and pull in the last few days. Sell the rip continues to be the name of the game if you’d ask me when it comes to European stocks, considering the uncertainty in play going into next year.

It’s still too early to be judging anything about Trump’s presidency at this stage. But perhaps the bond market had already been moving since October, so the follow through is lacking now after the election result. There might need to be another trigger point to get things rolling again and since it is Trump, that can really happen at any time. Or maybe he’ll take things in stride and prepare accordingly as he will only take office in January next year.

Have a great weekend, everyone.

This article was written by Justin Low at www.forexlive.com.