Forex - European Highlights - 14 May 2019


 10:43 (GMT) 14 May

  [Forex Highlights]

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European Highlights

European Highlights - 14 May 2019 (0101-LHJX-C01)

14 May 2019

Asia FX and News -

+ Asian currencies were under pressure during the overnight session after an early dip. USD/CNH nudged higher peaking just below 6.9200, just below the highs seen in late US trading. Comments from Trump indicating potential for an agreement had helped USD/CNH down to below 6.90 early in the Asian session. USD/SGD steadied somewhat after a bullish run overnight, last seen around 1.3700. USD/JPY recovered strongly on the Trump comments, rising around 50 pips from opening levels to a high near 109.80. AUD/USD managed a more modest rally of 15pips.

Nikkei and JGBs -

+ Nikkei -0.59%, 10Y JGB at -0.050%

Europe FX and news

+ The USD was little changed through the European morning, but there were some modest gains for the EUR, mainly against GBP, while the AUD edged back down to the lows seen in Asia.

+ GBP weakness was related more to politics than data, with increasing expectations that the government will fail to make a deal with the opposition Labour Party and consequently fail to push a Brexit deal through parliament. Concerns about the European elections and the likelihood that these will increase pressure for May to resign also continue to weigh. UK data was also weaker than expected, with average earnings growth falling to 3.2% y/y including bonuses in March, though it was in line with expectations at 3.3% excluding bonus.

+ Swedish CPI was a little stronger than expected, and EUR/SEK moved back below 10.80 in response. Riksbank governor Ingves said the inflation numbers were in line with expectations but said he expected the SEK to appreciate going forward.

+ The German ZEW sentiment index was weaker than expected, dipping back into negative territory, but still the second highest in the last year, so the number had little FX impact, with the current conditions index a little stronger than expected.

Bonds and equities

+ European bonds opened lower on Tuesday, partly correcting Monday's gains, led by 10y Gilt yields which are up 1bp at 1.11% on rising US yields after US President Trump used more conciliatory tones on a possible trade deal with China and on today's long dated Gilt supply. 10y Bund yields were also up by 1bp, while Italian BTPs recovered after cheapening 2bp ahead of today's EUR 6.75bn 3y,7y and 30y BTP auctions deadline.

Data:

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

AU: NAB Business Conditions (Apr) 3 (Prev: 7)

AU: NAB Business Confidence (Apr) 0 (Prev: -1R)

NL: Retail Trade (Mar) % y/y (Prev: 4.3)

DE: CPI (Apr F) % m/m (Mkt: 1 Prev: 1)

DE: CPI (Apr F) % y/y (Mkt: 2 Prev: 2)

DE: HICP (Apr F) % m/m (Mkt: 1 Prev: 1)

DE: HICP (Apr F) % y/y (Mkt: 2.1 Prev: 2.1)

DE: Wholesale Price Index (Apr) % y/y (Prev: 1.8)

FI: CPI (Apr) % m/m (Prev: 0.1)

FI: CPI (Apr) % y/y (Prev: 1.1)

ES: CPI (Apr F) % m/m (Mkt: 1.0 Prev: 1.0)

ES: CPI (Apr F) % y/y (Mkt: 1.5 Prev: 1.5)

ES: Flash HICP (Apr F) % m/m (Mkt: 1.1 Prev: 1.1)

ES: Flash HICP (Apr F) % y/y (Mkt: 1.6 Prev: 1.6)

NL: GDP (Q1 P) % q/q (Prev: 0.5)

NL: GDP (Q1 P) % y/y (Prev: 2.2)

SE: CPI (Apr) 2% y/y (Mkt: 2.1 Prev: 1.9)

SE: CPIF (Underlying) (Apr) 4cast: 2.1% y/y (Mkt: 2 Prev: 1.8)

UK: Average Earnings (incl. bonus) (Mar) 4cast: 3.4% 3m y/y (Mkt: 3.4 Prev: 3.5)

UK: ILO Unemployment Rate (Mar) 4cast: 3.9% (Mkt: 3.9 Prev: 3.9)

DE: ZEW (Current Conditions) (May) (Mkt: 6.3 Prev: 5.5)

DE: ZEW (Economic Sentiment) (May) 1index (Mkt: 5 Prev: 3.1)

EU: Industrial production (Mar) 4cast: % y/y (Mkt: -0.8 Prev: -0.3)

EU: ZEW (Economic Sentiment) (May) 4cast: 2index (Prev: 4.5)

US: NFIB Small Business Optimism (Apr) 4cast: 103 (Mkt: 102 Prev: 101.8)

Still to Be Released -

12:30 GMT - US: Import Price Index (Apr) % m/m (Mkt: 0.8 Prev: 0.6)

23:50 GMT - JP: M2 Money Supply (Apr) % y/y (Mkt: 2.3 Prev: 2.4)

Events & Auctions:

00:30 GMT - NZ: Finance Minister Pre-Budget Speech

04:35 GMT - JP: 30yr Bond Auction

07:00 GMT - EU: ECB's Villeroy speaks in Paris

07:15 GMT - US: Fed's Williams speaks in Zurich

09:00 GMT - IT: Tap of BTP 1 7/15/22 EUR 2.75bn)

09:00 GMT - IT: Tap of BTP 2.1 07/15/26 (EUR 2.5bn)

09:00 GMT - IT: Tap of BTP 3.85 9/1/49 (EUR 1.5bn)

09:30 GMT - BE: Bills Auction

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

12:35 GMT - UK: BoE's Rule speaks in London

15:00 GMT - US: Fed issues Q1 2019 Household Debt and Credit Report

16:45 GMT - US: Fed's George speaks in Minneapolis


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