Forex - European Highlights -Tuesday January 14 2020


 11:08 (GMT) 14 Jan

  [Forex Highlights]

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European Highlights -Tuesday January 14 2020 (0101-QGHP-C01)

European Highlights

January 14 2020

Asia FX and News:

+ China to buy more U.S. energy, manufactured goods in trade deal ~ Politico

+ China Dec. Exports Rise 7.6% Y/y in USD Terms; Est. 2.9%, imports Rise 16.3% Y/Y In Dollar Terms; Est. 9.6%

+ Focus remains on the phase one trade deal. A Politico report revealed some of the details of the deal, citing unnamed US official. E-minis initially higher but was short-lived. USD/JPY rose to 110.21, highest since May before easing to 110.07. EUR/JPY reached the highest since July but was very brief.

+ Both China imports and exports was much higher-than-expected, which points to stabilisation in Q4 growth due Friday, but no immediate market impact. AUD/USD was choppy around 0.69, perhaps due to relatively large options expiry and a choppy CNY as market digest the US removal of China as a currency manipulator. NZ quarterly business outlook survey expectedly improves in Q4. NZ m/m building permits saw a sharp decline but y/y remains solid. NZD/USD not bothered, hovering near Mon's low.

Nikkei and JGB:

+ Nikkei +0.73%, JGB 10yr yield at 0.017%

Europe FX and news

European Highlights -Tuesday January 14 2020 (0101-QGHP-C01)

+ The USD edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY.

+ There was little news of note. There was some early weakness in equities which coincided with USD gains against the riskier currencies, but this weakness had been reversed by the end of the morning.

+ EUR/GBP made a new high early in the session, breaking the December high, but fell back after that, though the bund/gilt spread continued to narrow to its lowest level since May 2018.

+ EUR/CHF pushed towards 3 year lows seen last week at 1.0780 with the lack of SNB intervention evident in the sight deposits data seen by some as a green light to buy the CHF, though the typical risk aversion that accompanies CHF strength was absent.

Equities and bonds

+ After cheapening yesterday, European bonds hold up reasonably well into the morning's large Club Med led supply slate. Heavy demand for Spain 10yr syndication (said >EUR45bn) helps. Bunds still find -0.2% capping. Gilts extend rally early on, on chart follow through and with some dovish BoE bank calls emerging. Gilts yields around -2bp across curve.

Data:

06:00 GMT - FI: CPI (Dec) % m/m (Prev: -0.1)

06:00 GMT - FI: CPI (Dec) % y/y (Prev: 0.7)

11:00 GMT - US: NFIB Small Business Optimism (Dec) 4cast: 104 (Mkt: 104.8 Prev: 104.7)

Still to be released:

13:30 GMT - US: CPI (Dec) 4cast: 0.3% m/m (Mkt: 0.3 Prev: 0.3)

13:30 GMT - US: CPI (ex Food & Energy) (Dec) 4cast: 0.2% m/m (Mkt: 0.2 Prev: 0.2)

21:45 GMT - NZ: Food Prices (Dec) % m/m (Prev: -0.7)

23:50 GMT - JP: M2 Money Supply (Dec) % y/y (Prev: 2.8)

Events

14:00 GMT - US: Fed's Williams discusses behavioral science

18:00 GMT - US: Fed's George speaks in Kansas City


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