Forex - European Highlights ~ Friday 12th January


 12:12 (GMT) 12 Jan

  [Forex Highlights]

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European Highlights ~ Friday 12th January (0100-WRBK-C01)

Asia FX and News -

+ Japan's Motegi: need to look at several indicators to declare end of deflation ~ Reuters

+ Mexico will never pay for Trump wall - Economy Minister.

+ Trump to extend sanctions relief for Iran under nuclear deal ~ BBG

+ NZ adds craft beer, Uber to CPI as DVD players drop out.

+ NZ home-building approvals jump on apartments - BBG

+ Dollar recovered well from the early scare. EUR/USD back off from an intraday high to settle at 1.2050. USD/JPY tried to give 111.00 another go but bulls are not giving up yet, trading sideways above the level. AUD/USD made use of the dollar weakness earlier to seek stop losses above 0.7900 before reversing to 0.7880. Kiwi a shade lower, but still not too far from Thursday high.

+ N225 closed -0.24% at 23653.82. 10yr JGBs yield 0.071%

European FX and News -

+ Headlines reporting Germany being close to forming a Grand Coalition gave the EUR an early boost, initially falling just shy of the 1.2092 2017 high, but then pushing through for a rapid run to a high at 1.2136. It has come off the top, but still well clear of 1.2100. The plans will still need to be ratified by the various parties, but talk of forming a strong bond with France and working on stability a strong draw for EUR buyers.

+ The EUR/USD rally has also translated into a weaker USD overall and has USD/JPY leaning on 111.00. EUR/JPY meanwhile has received a boost to reward those that sat in trough the sell-off over the earlier part of the week, the cross hitting a high at 134.80.

+ Cable piggy-backed the EUR run higher but at a respectful distance as EUR/GBP pushed to a high at .8928 before tracking back to .8900 ahead of the N.American open.

+ AUD and NZD have both made some gains through the session after dipping into Asia's close on profit taking, while the CAD is getting some support from crude recovering most of an early dip.

+ EUR/CHF pushed higher on the coalition news but stalled at 1.1790; EUR/SEK lifted by softer than expected CPI but likely with offers from 9.85.

Bonds and Equities -

+ With the coalition news bunds initially looked lower but quickly bounced. Instead, it has been demand for yield, so especially periphery long end, that has been in charge since, IT30s -6.5bp for instance, perhaps encouraged by euro breakout strength. Equity markets are generally ahead, FTSE & Eurostoxx +0.25%.

Data:

NZ: Building Permits (Nov) 10.8% m/m (Prev: -10.4R)

JP: Bank Lending Data (Ex trusts) (Dec) 2.5% y/y (Prev: 2.7)

JP: BoP Current Account Balance (Nov) 1347.3 JPY bn (Mkt: 1836.1 Prev: 2176.4)

JP: Economy Watchers Survey (Dec) 53.9 (Mkt: 55.1 Prev: 55.1)

07:45 GMT - FR: CPI (Dec F) % m/m (Mkt: 0.3 Prev: 0.3)

07:45 GMT - FR: CPI (Dec F% y/y (Mkt: 1.2 Prev: 1.2)

07:45 GMT - FR: HICP (Dec F) % m/m (Mkt: 0.4 Prev: 0.4)

07:45 GMT - FR: HICP (Dec F) % y/y (Mkt: 1.3 Prev: 1.3)

08:00 GMT - ES: CPI (Dec F) % m/m (Mkt: 0.1 Prev: 0.1)

08:00 GMT - ES: CPI (Dec F) % y/y (Mkt: 1.2 Prev: 1.2)

08:00 GMT - ES: HICP (Dec F) % m/m (Mkt: 0.1 Prev: 0.1)

08:00 GMT - ES: HICP (Dec F) % y/y (Mkt: 1.3 Prev: 1.3)

08:30 GMT - SE: CPI (Dec) 4cast: 1.7% y/y (Mkt: 1.8 Prev: 1.9)

08:30 GMT - SE: CPIF (Underlying) (Dec) 1.8% y/y (Mkt: 1.9 Prev: 2)

09:00 GMT - IT: Industrial Production (sa) (Nov) % m/m (Mkt: 0.6 Prev: 0.5)

09:00 GMT - IT: Industrial Production (wda) (Nov) % y/y (Mkt: 3.3 Prev: 3.1)

10:00 GMT - GR: CPI (Dec) % y/y (Prev: 1.1)

10:00 GMT - GR: HICP (Dec) % y/y (Prev: 1.1)

Still To Be Released -

Data:

13:30 GMT - US: CPI (Dec) 4cast: 0.1% m/m (Mkt: 0.1 Prev: 0.4)

13:30 GMT - US: CPI (ex Food & Energy) (Dec) 4cast: 0.2% m/m (Mkt: 0.2 Prev: 0.1)

13:30 GMT - US: Retail Sales (Dec) 4cast: 0.3% m/m (Mkt: 0.4 Prev: 0.8)

13:30 GMT - US: Retail Sales (ex Autos) (Dec) 4cast: 0.1% m/m (Mkt: 0.4 Prev: 1)

15:00 GMT - US: Business Inventories (Nov) % (Mkt: 0.4 Prev: -0.1)

Events & Auctions:

03:45 GMT - JP: 40yr Bonds Auction

08:25 GMT - SE: Riksbank's Skingsley Speaks in Stockholm

11:00 GMT - UK: 182-Day Bills Auction (GBP 2bn)

11:00 GMT - UK: 28-Day Bills Auction (GBP 500mn)

11:00 GMT - UK: 91-Day Bills Auction (GBP 500mn)

16:30 GMT - DE: Bundesbank's Weidmann Speaks in Rottach-Egern, Germany

17:00 GMT - US: Fed's Harker Speaks on Economic Outlook

21:15 GMT - US: Fed's Rosengren Speaks in San Diego


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