Forex - European Highlights - Tuesday 17 December 2019


 11:26 (GMT) 17 Dec

  [Forex Highlights]

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European Highlights - Tuesday 17 December 2019 (0101-QBRY-C01)

European Highlights

17 December 2019

Asia FX and News:

+ Boris Johnson to use huge majority to enshrine 2020 Brexit date in law - with or without a trade deal ~ Telegraph

+ Aust. Value of New Loans for Housing + 2% M/m in Oct.

+ GBP skidded early in Asia on a report citing unnamed source that PM Johnson plans to legally block any extension to the transition phase, regardless if there is a trade deal with the EU. GBP/USD fell from 1.3330 to 1.3235 before correcting towards 1.3300. The sharp fall probably triggered some stops below 1.3300 in the thinly-traded period of the day. EUR/GBP had a brief look above 0.84 before hovering around 0.8383.

+ NZD outperforms on yet another improvement in business confidence survey, though gains were not sizable. Gains in NZD more notable against AUD which suffered from the RBA minutes which was more dovish than the rate statement and seen as positioning for easing in Q1 2020. AUD/NZD slide just shy of 1.04. Losses in AUD/USD stabilised around 0.6870. USD/JPY bounced around 109.55 with no updates on risk sentiment.

Nikkei and JGBs:

+ Nikkei +0.47%, JGB 10yr yield at -0.010%

Europe FX and news

European Highlights - Tuesday 17 December 2019 (0101-QBRY-C01)

+ GBP continues to weaken through the European morning as the market took on board the news that Johnson was making the December 2020 date the legal limit for the transition period. GBP stabilised by the end of the morning helped by a solid labour market report which showed employment rose in the 3 months to October, though average earnings growth was weaker than expected and vacancies continued to fall. CBI industrial orders were also slightly weaker than expected. GBP/USD and EUR/GBP are now both back at levels seen before the election result was known.

+ Higher yielding currencies generally moved lower through the morning, with the USD reversing initial gains against the EUR and JPY and the AUD and NZD extending overnight weakness as risk appetite faltered, helped by the UK news and weaker sales guidance from Unilever. EUR/NOK also moved higher after testing 10 on Monday.

Bonds and equities

+ UK news dominates the morning bond action, the 'hard WAB' talk enough to push gilt yields moderately lower, -4bp, though shy of Mon's yield lows still. Some spillover to wider core, with capping still featuring (US10s -2.5bp) if limited in the case of bunds. Little action elsewhere, BTPs still drifting slightly further off spread support.

Data:

US: Net Long-term TICS Flows (Oct) USD 32.5bn (Prev: 49.5)

NZ: ANZ Business Confidence (Dec) -13.2 (Prev: -26.4)

09:00 GMT - IT: Trade Balance - EU (Oct) EUR mn (Prev: 1255)

09:00 GMT - IT: Trade Balance - Total (Oct) EUR mn (Prev: 2779)

09:30 GMT - UK: ILO Unemployment Rate (Oct) 4cast: 3.9% (Mkt: 3.9 Prev: 3.8)

09:30 GMT - UK: Average Earnings (incl. bonus) (Oct) 4cast: 3.4% 3m y/y (Mkt: 3.4 Prev: 3.6)

10:00 GMT - EU: Trade Balance (sa) (Oct) EUR bn (Prev: 18.3)

Still To Be Released:

13:30 GMT - CA: Manufacturing sales (Oct) 4cast: 0% m/m (Mkt: 0.1 Prev: -0.2)

13:30 GMT - US: Housing Starts (Nov) 4cast: 1340k (Mkt: 1343 Prev: 1314)

13:30 GMT - US: Building Permits (Nov) 4cast: 1430k (Mkt: 1414 Prev: 1461)

14:15 GMT - US: Capacity Utilization (Nov) 4cast: 77.4% (Mkt: 77.4 Prev: 76.7)

14:15 GMT - US: Industrial production (Nov) 4cast: 1% m/m (Mkt: 0.8 Prev: -0.8)

23:30 GMT - AU: Westpac-MI Leading Index (Nov) % m/m (Prev: -0.07)

23:50 GMT - JP: Exports (Nov) 4cast: -8.4% y/y (Mkt: -8.8 Prev: -9.2)

23:50 GMT - JP: Imports (Nov) 4cast: -10% y/y (Mkt: -12.3 Prev: -14.8)

23:50 GMT - JP: Trade Balance (nsa) (Nov) 4cast: -554JPY bn (Mkt: -350 Prev: 15.7)

23:50 GMT - JP: Trade Balance (sa) (Nov) JPY bn (Mkt: -57 Prev: -34.7)

Events

13:00 GMT - US: Fed's Kaplan speaks in Minnesota

18:00 GMT - US: Fed's Rosengren speaks in New York

19:15 GMT - EU: BoE's Carney Speaks at ECB's Coeure's Farewell Dinner


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