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European currency news roundup: yields, energy, and inflation

  • 28 September, 2021
  • 4:04 pm EEST

European currency news roundup: yields, energy, and inflation

Forex market headlines from the European trade session on September 28, 2021

The global energy crisis is a prominent focus in the market at the moment, as energy costs in Europe surge once more, with repercussions seen in the bond market as well as inflation forecasts.

Treasury rates have maintained their technical breakout from last week, with 5-year yields rising to 1.02 percent for the first time since early last year, and 10-year yields rising to 1.54 % during the afternoon.

Meanwhile, eurozone inflation forecasts have risen to their highest level since 2015.

All of this is keeping the yen under pressure, with USD/JPY lingering around 111.30-40 levels and edging closer to the year’s highs of 111.64-66.

The dollar rose across the board as rising Treasury yields weighed on equity sentiment during the session. GBP/USD dropped from 1.3710 to 1.3595, indicating that the pound was also feeling the effects of stagflation fears.

Commodity currencies are also struggling, with the AUD/USD losing 0.5 % to 0.7250 and the NZD/USD plunging to its lowest level in a month, sliding 0.7 % to 0.6960.

The USD/CAD increase was more modest, with the pair rising slightly from 1.2610 to 1.2640 levels as rising oil prices support the loonie.

Brent is trading above $80 for the first time since 2018, while WTI crude is up more than 1% to above $76 as the recent uptrend continues.

When it comes to equities, sentiment is starting to deteriorate, with tech stocks taking the brunt of the blow as bond yields continue to rise. Nasdaq futures are down 1.4 % , and Europe’s tech index is on track to have its worst day since October of last year.

As we approach North American trade, European markets are mainly down more than 1% on the day, while SP 500 futures are down 0.8 % and Dow futures are down 0.3 % .

 

Markets News :

  • USD leads, NZD lags on the day
  • European equities lower; S&P 500 futures down 0.8%
  • US 10-year yields up 4.5 bps to 1.528%
  • Gold down 0.8% to $1,735.20
  • WTI up 1.1% to $76.28
  • Bitcoin down 1.7% to $41,975

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