Forex - European Highlights - 11 June 2019

 11:03 (GMT) 11 Jun

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European Highlights

European Highlights - 11 June 2019 (0101-LYLH-C01)

11 June 2019

Asia FX and News

+ U.S. Seeks to Widen Auto Parts Definition in Japan Talks ~ Jiji

+ Japan PM Abe Has Decided Not to Hold Double Election ~ Sankei

+ Australian Business Confidence Rose to 7 pts from 0; Conditions Fell to 1 pt from 3

+ New Zealand 1Q Mfg. Sales Rise 1.0% q/q

+ JPY pairs are higher across the board in a quiet Asian session. USD/JPY rallied ahead of the Tokyo fix and continued to grind higher thereafter (helped by a stronger Yuan fixing, easing some concerns over trade), though slowed down as Monday's highs approached. AUD was given a nudge higher by the strong-than-expected Yuan fixing before bouncing around 0.6960, with muted reaction on Australian business confidence results. Weakness still apparent in many areas of the survey despite a rebound in confidence. No immediate reaction on the Kiwi on heavy traffic index and manufacturing activity data, but likely to have weighed on the Kiwi today. Manufacturing volume apart from meat and dairy contracted in Q1. NZD/USD slips to the lowest in a week, below 0.66.

Nikkei and JGBs

+ Nikkei +0.33%, JGB 10yr yield at -0.108%

Europe FX and news

+ GBP made gains in European morning on stronger than expected UK labour market data, though the details of the data suggest the underlying story is still weakening. Average earnings growth picked up excluding bonuses, but fell slightly including bonuses, though it was still stronger than expected. Employment rose modestly q/q, but employees in employment fell, and the rise was due to an increase in self-employed. EUR/GBP briefly dipped back below 0.89 after making a new 5 month high early.

+ Norwegian CPI was much weaker than expected in May at 2.3% y/y, but the decline was due to weakness in food and transport and may have bene related to the timing of Easter. EUR/NOK initially pushed above 9.80 but fell back to opening levels.

+ The USD was broadly steady gaining against the JPY and falling back against the more risk positive currencies.

Bonds and equities

+ Despite rising US Treasury and UK Gilt yields, 10y Bund yields were little moved on Tuesday, trading at -0.225% underpinned by weaker investor confidence in June, while UK 10y Gilts yields were 3bp higher at 0.865% following better than expected labour market statistics for April/May. Risk on continued to support equities and peripherals with Greek, Spanish and Portuguese bonds outperforming the most while BTP lagged.


JP: M2 Money Supply (May) 2.7% y/y (Mkt: 2.2 Prev: 2.5R)

AU: NAB Business Conditions (May) 1 (Prev: 3)

AU: NAB Business Confidence (May) 7 (Prev: 0)

06:00 GMT - NO: CPI (May) % m/m (Mkt: 0.1 Prev: 0.4)

06:00 GMT - NO: CPI (May) % y/y (Mkt: 2.9 Prev: 2.9)

06:00 GMT - NO: CPI Core (May) % m/m (Mkt: 1 Prev: 0.5)

06:00 GMT - NO: CPI Core (May) % y/y (Mkt: 2.6 Prev: 2.6)

06:30 GMT - FR: BoF Business Sentiment (May) (Mkt: 100 Prev: 99)

08:30 GMT - EU: Sentix Investor Confidence (Jun) (Mkt: 2.5 Prev: 5.3)

08:30 GMT - UK: Average Earnings (incl. bonus) (Apr) % 3m y/y (Mkt: 3 Prev: 3.2)

08:30 GMT - UK: ILO Unemployment Rate (Apr) % (Mkt: 3.8 Prev: 3.8)

10:00 GMT - US: NFIB Small Business Optimism (May) 4cast: 103 (Mkt: 101.8 Prev: 103.5)

Still to be Released:

12:30 GMT - US: PPI (May) 4cast: 0.3% m/m (Mkt: 0.1 Prev: 0.2)

12:30 GMT - US: PPI (ex Food & Energy) (May) 4cast: 0.2% m/m (Mkt: 0.2 Prev: 0.1)

Events & Auctions:

06:00 GMT - JP: Auction for Enhanced-Liquidity

09:00 GMT - UK: BoE's Saunders, Broadbent speak in Parliament

09:30 GMT - BE: 336-Day Bills Auction (EUR 1bn)

09:30 GMT - BE: 91-Day Bills Auction (EUR 0.6bn)

09:30 GMT - EU: ECB Main Refinancing Operation Result

12:50 GMT - FR: 160-Day Bills Auction (EUR 1.1bn)

12:50 GMT - FR: 286-Day Bills Auction (EUR 0.4bn)

12:50 GMT - FR: 342-Day Bills Auction (EUR 0.8bn)

12:50 GMT - FR: 83-Day Bills Auction (EUR 2.5bn)

17:00 GMT - US: 3yr Notes Auction (USD 38bn)

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