Forex - European Highlights - 19 July 2019


 10:49 (GMT) 19 Jul

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European Highlights

European Highlights - 19 July 2019 (0101-MYJR-C01)

19 July 2019

Asia FX and News

+ NY Fed Says Williams' Speech Not About Policy Action - WSJ

+ Before Tokyo markets opens, NY Fed stepped out to clarify that Williams' speech in the NA afternoon advocating quicker easing was academic and not necessarily indicative of policy actions. That reversed some of the USD losses on dovish comment from Williams and Clarida. Regardless, the overall dovish tone lifted risk sentiment, JPY weakens across the board on higher regional equities and US yields. USD/JPY bounced from the NA lows into 107.60. Japan CPI was in line with expectations, still at subdued levels and had on impact on the yen. NZD stays firm, securing strong gains seen this week, though both NZD and AUD are struggling to extend gains against the USD in Asia. EUR/USD kept under 1.1280.

Nikkei and JGBs

+ Nikkei +2.00%, JGB 10yr yield at -0.134%

Europe FX and news

+ The USD recovered a little in the European morning after losses seen overnight. The USD recovery against the EUR was helped by a modest decline in short term EUR rate expectations reflecting an increase in market expectations of an ECB cut next week.

+ Eurozone balance of payments data showed a modest rise in the current account surplus in May, but there was also further evidence of a reduction in Eurozone foreign bond buying this year.

+ The UK PSNB was higher than expected in June, reflecting lower VAT receipts, which provides a contrast to Thursday's strong retail sales data.

+ GBP made some further gains on the crosses as markets continued to price in a more positive view on Brexit.

+ German PPI slightly weaker than expected at 1.2% y/y in June, down from 1.9% in May.

Bonds and equities

+ The late reaction to Fed Williams yesterday still exerting a net downward influence on yields, though the market is off its best levels, US2s trimming to around 1.79% from the 1.75% spike lows and bunds some 15 ticks off the o/n highs though up on the settle. BTPs main exception to lower yields, IT10s +2.5bp, balking at the try to new yield lows Thurs. Press still speculating over autumn election though Di Maio said to be offering peace talks today and saying government not in doubt, so maybe the first to blink.

Data:

JP: Natl CPI (Jun) 0.7% y/y (Mkt: 0.7 Prev: 0.8)

DE: PPI (Jun) % m/m (Mkt: -0.1 Prev: -0.1)

EU: Current Account (sa) (May) EUR bn (Prev: 20.9)

UK: Public Borrowing (PSNB ex banks) (Jun) GBP bn (Mkt: 3.9 Prev: 5.1)

UK: Public Finances (PSNCR) (Jun) GBP bn (Prev: 10.7)

Still to be released

12:30 GMT - CA: Retail Sales (May) 4cast: 0.4% m/m (Mkt: 0.3 Prev: 0.1)

12:30 GMT - CA: Retail Sales (ex Auto) (May) 4cast: 0.3% m/m (Mkt: 0.4 Prev: 0.1)

13:00 GMT - BE: BNB Consumer Confidence (Jul) index (Prev: -7)

14:00 GMT - US: Univ of Mich Sentiment (Jul P) index (Mkt: 98.8 Prev: 98.2)

Events & Auctions:

06:00 GMT - JP: Enhanced Liquidity Auction

10:00 GMT - UK: 182 days Bills Auction (GBP 3bln)

10:00 GMT - UK: 28 days Bills Auction (GBP 0.5bln)

10:00 GMT - UK: 91 days Bills Auction (GBP 2.5bln)

15:05 GMT - US: Fed's Bullard speaks in New York

15:30 GMT - JP: 3mth Bills Auction

20:30 GMT - US: Fed's Rosengren joins panel on Central Bank Independence


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