Forex - European Highlights - 12 February 2019

 11:34 (GMT) 12 Feb

  [Forex Highlights]

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European Highlights

European Highlights - 12 February 2019 (0101-JCGG-C01)

12 February 2019

Asia FX and News -

+ Tentative Deal Reached in Bid to Avoid Shutdown - BBG

+ U.S. Sees Trump-Xi Meeting "Soon" as Trade Talks Move to Beijing - BBG

+ BoJ Eschews Dovish Tilt by Trimming Bond Purchases - BBG

+ Warning Signs that Could Sway RBA on Rates Are Flashing Amber. - BBG

+ RBNZ May Be Next Central Bank to Turn Dovish as Worries Grow. - BBG

+ China is adding to its gold reserves again amid a global slowdown - BBG

+ Asian markets saw a strong positive response after the U.S. reached a deal to avoid another government shutdown. Rhetoric from the U.S. showed some keenness to have a trade deal with China. AUD/USD saw a spike to 0.7087 but faded to 0.7077. USD/JPY is retracing after a bid move to a high of 110.65, last at 110.59. USD/CAD came off from prior day's high to 1.3288 last. EUR/USD saw a crawl around the 1.1280 level.

Nikkei and JGBs -

+ Nikkei +2.61%, JGB 10yr at -0.013%

Europe FX and news

+ GBP was under pressure through the European morning, with May expected to tell parliament later today that they should hold their nerve to get the changes they require in the EU withdrawal deal. With the EU still holding the line that they will not reopen the withdrawal agreement, this maintains the risk of the two sides playing "chicken" with "no deal", and is likely to keep the pressure on GBP, with the market now targeting GBP/USD support in the 1.2750 area.

+ EUR/USD also started the morning weak, but reversed the initial dip through support at 1.1265/70 by the end of the session. Initial USD strength against the JPY was also reversed, though overnight equity strength carried over to European markets.

+ EUR/SEK extended Monday's decline ahead of tomorrow's Riksbank rate decision, with SEK gains based on expectations about the Riksbank following Monday's strong production data rather than the stable unemployment data released this morning.

+ EUR/CHF recovered strongly helped by the better equity tone. EUR/NOK slightly offered on recovering oil prices.

Equities and bonds

+ Core yields drift up and risk lifted, encouraging further BTP recovery, on the back of the tentative budget deal. Gilts slightly checked by the increasing Brexit jitters


04:30 GMT - JP: METI Tertiary activity index (Dec) % m/m (Mkt: -0.1 Prev: -0.3)

08:30 GMT - SE: PES Unemployment (Jan) % (Prev: 3.8)

11:00 GMT - PT: CPI (Jan F) % m/m (Prev: -0.2)

11:00 GMT - PT: CPI (Jan F) % y/y (Prev: 0.7)

11:00 GMT - PT: HICP (Jan F) % m/m (Prev: -0.4)

11:00 GMT - PT: HICP (Jan F) % y/y (Prev: 0.6)

11:00 GMT - US: NFIB Small Business Optimism (Jan) 4cast: 102 (Mkt: 103 Prev: 104.4)

Still to be released:

Events & Auctions:

EU: EU Economic and Financial Affairs Council meeting

GR: Expected: New Synd 5y GGB 07/24 (EUR 3bn)

NL: New DSL 0.25 07/15/29 (DDA) (EUR 6bn)

08:00 GMT - SE: Riksbank holds monetary policy meeting

09:45 GMT - ES: Bills Auction

10:30 GMT - BE: 336-Day Bills Auction (EUR 1bn)

10:30 GMT - BE: 84-Day Bills Auction (EUR 0.8bn)

10:30 GMT - EU: ECB Main Refinancing Operation Result

16:00 GMT - IT: 365-Day Bills Auction (EUR 6.5bn)

20:50 GMT - AU: RBA's Heath speaks in Syndey

23:30 GMT - EU: ECB's Lautenschlaeger speaks in Sydney

23:30 GMT - US: Fed's Mester speaks in Cincinnati

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