Forex - US North American Summary and Highlights 9 Jul


 20:05 (GMT) 09 Jul

  [Forex Highlights]

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Overview

US North American Summary and Highlights 9 Jul (0101-MLRF-C04)

The USD had a positive tone in the European morning, particularly versus GBP as the Speaker refused to call an amendment designed to prevent the PM proroguing parliament to initiate a no deal Brexit. North American trade was subdued, equites correcting from European-led weakness.

News highlights
- Fed's Harker said no immediate need to move rates in any direction.

- US Jun NFIB small business optimism index fell to 103.3 from 105.0 vs 103.1 exp.

Currencies:

US North American Summary and Highlights 9 Jul (0101-MLRF-C01)

Broad-based USD strength was seen through the European morning with North American trade subsequently subdued. GBP showed most initial weakness, but USD gains broadened. EUR/USD saw lows below 1.12 and USD/JPY hit its highest level since late May, before seeing modest corrections, though USD/JPY closed firm.

AUD and CAD were also soft, falling on the crosses as well as against the USD, with weakness in equities helping to keep pressure on the more risk sensitive currencies. AUD/CAD fell below .91. Weakness in European equities was exacerbated by the profit warning from BASF

UK Speaker Bercow rejected an amendment from MP Dominic Grieve which attempted to rule out a new Prime Minister "proroguing" parliament in order to force through a "no deal" Brexit. EUR/GBP traded above 0.90 for the first time since January and GBP/USD came within a pip of the year's low seen on January 2 before a modest correction around the US open. Late in the day an amendment designed to make "proroguing" more difficult was passed by MPs, by a single vote, though the GBP response was modest.

US North American Summary and Highlights 9 Jul (0101-MLRF-C02)

Swiss unemployment was lower than expected in June, falling to 2.3% seasonally adjusted. EUR/CHF was choppy but ended a little lower.

Non-voting FOMC member Harker said he doesn't currently see an immediate need to change interest rates. White House economic adviser Larry Kudlow said he believed the Fed had room to reverse the December rate hike.

Bonds:

US North American Summary and Highlights 9 Jul (0101-MLRF-C03)

USTs had a choppy day for flows ahead of supply and event risk. Asia dip buying ran into early London selling, re-testing the payrolls yield highs out to 5s, before running into some block steepener trades. Kudlow comments talking up scope for Dec rate cut reversal on price signals and sounding relatively positive on EU and China trade talks also went with the grain. 2s +1.3bps @ 1.90%, 5s +1.3bps @ 1.87%, 10s +0.8bps @ 2.06%, 30s +0.3bps @ 2.53%.

Agency Spreads: Freddie/Fannie 5s +0.4/0.0 bps, 10s +0.3/+0.4 bps.

Swap Spreads: 2s -0.25bps, 5s -0.30bps, 10s -0.55bps.

Equities

Equities saw some recovery from European-led weakness at the open though maintained a cautious tone ahead of Powell's Wednesday testimony.

To Be Released -

Data

23:50 GMT - JP: PPI (Jun) % m/m (Mkt: -0.1 Prev: -0.1)

23:50 GMT - JP: PPI (Jun) %y/y (Mkt: 0.4 Prev: 0.7)

04:30 GMT - NL: Manufacturing Production (May) % m/m (Prev: 0.6)

04:30 GMT - NL: Manufacturing Production (May): %y/y (Prev: -1.2)

06:00 GMT - NO: CPI (Jun) % m/m (Mkt: 0.2 Prev: -0.3)

06:00 GMT - NO: CPI (Jun) % y/y (Mkt: 2.1 Prev: 2.5)

06:00 GMT - NO: CPI Core (Jun) % m/m (Mkt: 0.5 Prev: -0.2)

06:00 GMT - NO: CPI Core (Jun) % y/y (Mkt: 2.4 Prev: 2.3)

06:45 GMT - FR: Industrial Production (May) % m/m (Mkt: 0.3 Prev: 0.4)

06:45 GMT - FR: Industrial Production (May) % y/y (Mkt: 1.6 Prev: 0.4)

06:45 GMT - FR: Manufacturing Production (May) % m/m (Mkt: 0.3 Prev: 0)

06:45 GMT - FR: Manufacturing Production (May): % y/y (Prev: 0.5)

08:00 GMT - IT: Industrial Production (sa) (May) % m/m (Mkt: 0.2 Prev: -0.7)

08:00 GMT - IT: Industrial Production (wda) (May) % y/y (Mkt: -1.5 Prev: -1.5)

08:30 GMT - UK: Construction Output (sa) (May) 4cast: -0.5% m/m (Mkt: 0.1 Prev: -0.4)

08:30 GMT - UK: Construction Output (sa) (May) 4cast: -0.1% y/y (Mkt: 0.9 Prev: 2.4)

08:30 GMT - UK: GDP (May) 4cast: 0.25% m/m (Mkt: 0.3 Prev: -0.4)

08:30 GMT - UK: Index of Services (May) 4cast: 0% 3m/3m (Mkt: 0.1 Prev: 0.2)

08:30 GMT - UK: Index of Services (May) 4cast: -0.1% m/m (Mkt: 0.1 Prev: 0)

08:30 GMT - UK: Industrial Production (May) 4cast: 2.2% m/m (Mkt: 1.5 Prev: -2.7)

08:30 GMT - UK: Industrial Production (May) 4cast: 1.8% y/y (Mkt: 1.2 Prev: -1)

08:30 GMT - UK: Manufacturing Production (May) 4cast: 3% m/m (Mkt: 2.2 Prev: -3.9)

08:30 GMT - UK: Manufacturing Production (May) 4cast: 1.8% y/y (Mkt: 1.1 Prev: -0.8)

08:30 GMT - UK: Trade Balance (Non-EU) (May) GBP bn (Mkt: -4.8 Prev: -4.595)

08:30 GMT - UK: Visible Trade Balance (May) GBP bn (Mkt: -12.55 Prev: -12.113)

09:00 GMT - GR: HICP (Jun) % y/y (Prev: 0.2)

10:00 GMT - PT: HICP (Jun F) % m/m (Prev: 0.4)

10:00 GMT - PT: HICP (Jun F) % y/y (Prev: 0.7)

14:00 GMT - CA: BoC Rate (10 Jul) 4cast: 1.75 (Mkt: 1.75 Prev: 1.75)

14:00 GMT - US: Wholesale Inventories (May F) % m/m (Mkt: 0.4 Prev: 0.4)

23:01 GMT - UK: RICS Housing Survey (Jun) % (Mkt: -12 Prev: -10)

Events & Auctions:

GMT - NZ: RBNZ's Orr Scheduled to Speak on Phase 2 Review

05:50 GMT - US: Fed's George speaks in Helsinki

09:00 GMT - GR: 91 days Bills Auction (EUR 0.625bn)

09:00 GMT - IT: 12mth Bills Auction

09:00 GMT - IT: 368 days Bills Auction (EUR 6.5bn)

09:30 GMT - DE: New Bund 08/29 (EUR 4bn)

09:30 GMT - PT: Tap of OT 1.75% 06/29 (EUR 0.75bn)

09:30 GMT - PT: Tap of OT 4.1% 02/45 (EUR 0.5bn)

14:00 GMT - CA: Bank of Canada Monetary Policy Report

14:00 GMT - US: Fed's Powell Testifies to House Financial Services Panel

17:00 GMT - US: 10yr Notes Auction (USD 24bn)

17:10 GMT - UK: BoE's Tenreyro Speaks in London

17:30 GMT - US: Fed's Bullard to speak at Washington University

18:00 GMT - US: FOMC Minutes


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