Forex - European Highlights - 15 May 2019


 10:45 (GMT) 15 May

  [Forex Highlights]

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European Highlights

European Highlights - 15 May 2019 (0101-LJCW-C01)

15 May 2019

Asia FX and News -

+ China's Retail Sales +7.2% Y/Y; Est. +8.6%; April Industrial Output Rises 5.4% Y/Y; Est. 6.5%. ~ BBG

+ Australia May Westpac Consumer Confidence Rises 0.6% m/m to 101.3 ~ BBG

+ USD/JPY bounce from the 109.09/00 support seen unwinding the stretched intraday tools and see resistance now at the 110.00/28 area. AUD/USD pressure stays on the downside and lower see scope to target the .6915/00 area next. NZD/USD extending the rejection from 1.0725 high and clear break of the 1.0600 level and 1.0587 support return focus to the 1.0551 and 1.0518 lows.

Nikkei and JGBs -

+ Nikkei 0.08%, 10Y JGB at -0.06%

Europe FX and news

+ The USD edged lower though the European morning, mostly against the JPY, helped by some softening in equity markets after some firming overnight. This was related to concerns about Italy, with more talk from the League's Salvini indicating a willingness to increase the deficit. This is pre-election campaigning rather than policy but is enough to turn sentiment negative in already nervous markets.

+ Data was essentially as expected through the morning, with German and Eurozone GDP both coming in at 0.4% q/q in Q1. The German economics ministry warned that the outlook was still weak going forward, with a recovery dependent on an improvement in the external environment and a reduction in trade conflicts. French CPI was revised higher to 1.5% y/y on an HICP basis in April. Eurozone employment grew strongly at 0.3% q/q and 1.3% y/y.

+ There was no UK data, but the government announced that there would be a vote on the Withdrawal Bill in the first week of June. This followed a meeting last night between May and Corbyn, but there is no indication of any deal between the government and Labour. EUR/GBP was little changed.

+ EUR/CHF continued to weaken after softness in recent days, with worries about Italy seemingly having a clearer impact than the concerns about the US/China trade war.

Bonds and equities

+ Follow through fast money BTP selling at the open, with early block sale noted, weakness led by the short end, 2s up to around 0.8%, albeit 10s later checked back from 2.8%- test. Mkt still reacting to the pre-election rhetoric on ignoring Budget rules. Drives bunds to fresh future contract highs, with DE10s testing below the Mar -0.094% low. Soft o/n China data with the grain too, while as-expected German GDP bounce ignored. IT-DE 10s out to 286bp

Data:

JP: M2 Money Supply (Apr) 2.6% y/y (Mkt: 2.3 Prev: 2.4)

AU: Wage Price Index (Q1) 0.5% q/q (Mkt: 0.6 Prev: 0.5)

NL: Trade Balance (Mar) EUR bn (Prev: 5.1)

DE: GDP (sa) (1Q P) 4cast: 0.4% q/q (Mkt: 0.4 Prev: 0)

DE: GDP (wda) (1Q P) % y/y (Mkt: 0.7 Prev: 0.6)

FI: GDP (Mar) % (Prev: 1.7)

NO: Trade Balance (Apr) NOK bn (Prev: 13.9)

FR: CPI (Apr F) % m/m (Mkt: 0.2 Prev: 0.2)

FR: CPI (Apr F) % y/y (Mkt: 1.2 Prev: 1.2)

FR: HICP (Apr F) % m/m (Mkt: 0.3 Prev: 0.3)

FR: HICP (Apr F) % y/y (Mkt: 1.4 Prev: 1.4)

EU: GDP (SA) (Q1 P) % q/q (Mkt: 0.4 Prev: 0.4)

EU: GDP (SA) (Q1 P) % y/y (Mkt: 1.2 Prev: 1.2)

Still to Be Released -

12:30 GMT - CA: CPI (Apr) 4cast: 0.4% m/m (Mkt: 0.4 Prev: 0.7)

12:30 GMT - CA: CPI (Apr) 4cast: 2% y/y (Mkt: 2 Prev: 1.9)

12:30 GMT - US: Empire State Survey (May) (Mkt: 8 Prev: 10.1)

12:30 GMT - US: Retail Sales (Apr) 4cast: 0.2% m/m (Mkt: 0.7 Prev: 1.2)

12:30 GMT - US: Retail Sales (ex Autos) (Apr) 4cast: 0.8% m/m (Mkt: 0.7 Prev: 1.2)

13:00 GMT - CA: Existing Home Sales (Apr) 4cast: 2% m/m (Mkt: 1.8 Prev: 0.9)

13:15 GMT - US: Capacity Utilization (Apr) 4cast: 78.6% (Mkt: 78.8 Prev: 78.8)

13:15 GMT - US: Industrial production (Apr) 4cast: -0.1% m/m (Mkt: 0.1 Prev: -0.1)

14:00 GMT - US: Business Inventories (Mar) % m/m (Mkt: 0 Prev: 0.3)

14:00 GMT - US: NAHB Builders survey (May) (Mkt: 64 Prev: 63)

20:00 GMT - US: Net Long-term TICS Flows (Mar) USD bn (Prev: 51.9)

23:50 GMT - JP: PPI (Apr) % m/m (Mkt: 0.2 Prev: 0.3)

23:50 GMT - JP: PPI (Apr) %y/y (Mkt: 1.1 Prev: 1.3)

Events & Auctions:

DE: Tap of Bund 1.25 8/15/48 (EUR 1bn)

08:00 GMT - EU: ECB's Lane speaks in Tallinn

10:00 GMT - SE: Riksbank's Jochnick speaks in Stockholm

10:30 GMT - UK: BoE's Place speaks in London

12:30 GMT - DE: Germany Economy Minister Altmaier speaks in Berlin

13:30 GMT - US: Fed's Quarles speaks in Washington

14:15 GMT - EU: ECB's Coeure speaks in Paris

16:00 GMT - US: Fed's Barkin speaks in New York

16:30 GMT - EU: ECB's Praet Speaks in Brussels


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