ForexLive European FX news wrap: Germany agrees on debt deal, gold clips $3,000 level

Headlines:

• Germany’s CDU, SPD have agreed on a solution with Greens on financial package – report
• Germany’s Greens party said to be satisfied with agreement on debt deal
• Gold hits $3,000 for the first time
• Japan’s largest union group Rengo secures first-round 5.46% average wage hike
• Germany February final CPI +2.3% vs +2.3% y/y prelim
• France February final CPI +0.8% vs +0.8% y/y prelim
• Spain February final CPI +3.0% vs +3.0% y/y prelim
• UK January monthly GDP -0.1% vs +0.1% m/m expected
• China February M2 money supply +7.0% vs +7.0% y/y expected
• French finance minister labels tariffs situation as an “idiotic war”
• Kremlin says both US and Russia understand there’s a need for a Trump-Putin call

Markets:

• NZD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.9%
• US 10-year yields up 2.8 bps to 4.304%
• Gold up 0.3% to $2,995.48
• WTI crude up 0.8% to $67.07
• Bitcoin up 3.6% to $83,277

There were plenty of headlines in Europe today with some decent market moves to be had as well.

The big one from the region is the incoming German government agreeing to a debt deal with the Greens, thus securing passage for a vote next week. You would think the Greens would put on a bit more of a show but this was quickly settled even before the weekend.

The euro nudged higher on the headlines with EUR/USD briefly crossing 1.0900 before holding just under that now, up 0.4% on the day. This comes as German bonds are being crushed with yields jumping across the curve. 30-year German bond yields are up to 3.24% – nearing its highest levels since 2011.

USD/JPY is inadvertently higher as such but also helped out by a more positive risk mood. The pair is up 0.6% to 148.75 as it keeps more buoyed ahead of US trading. Japan’s largest union group also agreed yet another strong wage hike of 5.46%, although this was under the 6.09% that was demanded. That pushed USD/JPY up to 149.00 for a brief moment.

The dollar is on the softer side at the balance as it is also down against the aussie and kiwi. AUD/USD is up 0.3% to 0.6300 while NZD/USD is up 0.5% to 0.5725, helped by a better showing in risk and the Chinese yuan as well.

In the equities space, the DAX is leading the charge amid the news at home with gains of nearly 2% now. US futures are also pointing higher as the mood music is holding up but dip buyers are still clawing back losses from yesterday for the most part. Adding to that, we also still have to see what Wall Street has to offer as US trading tends to act up on its own as we have seen all through this week.

Besides that, gold is another standout on the day as it soared higher to touch $3,000 for the first time. There was some profit-taking after in a push down to $2,986 but the precious metal is back up slightly to around $2,995 now. Inevitable.

It’s not a day that is lacking in action as it will also be yet another busy and volatile one in US before the weekend surely. I wish everyone a wonderful weekend and for the gold bugs, here’s a big cheers to you all! 🍻

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