Forex - European Highlights - 18 July 2019


 11:36 (GMT) 18 Jul

  [Forex Highlights]

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European Highlights - 18 July 2019 (0101-MXJH-C01)

European Highlights

18 July 2019

European Highlights - 18 July 2019 (0101-MXJH-C01)

Asia FX and News

+ U.K. Ministers Mull Quitting to Block Parliament Suspension ~ BBC

+ Focus in Asia was on Australia June employment data, which was seen as decent enough to put some expectations of an August ease to bed, though not lifting many bets on a cut off by year end. Trend data was healthy, and SA full-time hiring was strong despite a miss on the headlines. Unemployment rate steady at 5.2%, though a shade higher before rounding and participation rate remains at 66.0%, slightly lower before rounding. Business confidence in Q2 improved. AUD/USD jumps higher though gains probably contained by some negatives in the labour report, weaker business conditions and generally softer risk appetite. Yen and CHF stood strong in Asia. Reuters Tankan underscored worsening sentiment among Japanese firms, further highlighted by weaker-than-expected exports and imports. After ending the NA session below 108, USD/JPY heads lower before stabilising around 107.70. Dollar resumes the softer tone from Thursday.

Nikkei and JGBs

+ Nikkei 1.97%, JGB 10yr yield at -0.135%

Europe FX and news

+ GBP was the big mover in the European morning. EUR/GBP fell from 0.9039 early on to hit a low at 0.9001. Almost all the decline came before the release of the much stronger than expected retail sales data for June. This showed a rise of 1.0% m/m against market expectations of a 0.3% decline, but EUR/GBP was already trading at 0.9007 ahead of the data, and barely moved lower after the numbers. There may have been some squaring of short GBP positions in anticipation of the Commons vote this afternoon which could effectively prevent the "proroguing" of parliament and thus reduce the risk of "no deal".

+ The BoE survey showed a significant increase in demand for mortgages in Q2 but a decline in credit card lending, though it said it expected mortgage demand to be unchanged in Q3 and credit card lending to pick up.

+ The USD was slightly weaker in aggregate as a result of the GBP recovery, but gained a little against the EUR through the morning in an otherwise largely newsless session.

Bonds and equities

+ Equity slippage on trade concerns and some negative earnings helps further core recovery, DE30s -2bp. Unexpected strong rebound in UK retail sales though helps cancel gilt's opening gains, GB10s back to around flat, also tempering broader bid. Periphery slightly tighter and Spain in particular firmer through supply.

Data:

JP: Exports (Jun) -6.7% y/y (Mkt: -5.4 Prev: -7.8)

JP: Imports (Jun) -5.2% y/y (Mkt: -0.2 Prev: -0.2)

JP: Trade Balance (nsa) (Jun) 589.5 JPY bn (Mkt: 403.5 Prev: -968.3)

JP: Trade Balance (sa) (Jun) -14.4JPY bn (Mkt: -153.2 Prev: -621.5)

AU: Employment (Jun) 0.5 chg k (Mkt: 9 Prev: 42.3)

AU: Unemployment (Jun) 5.2% (Mkt: 5.2 Prev: 5.2)

AU: NAB Business Confidence (Jul) (index) 6 (Prev: 2)

NL: Unemployment (sa) (Jun) % (Prev: 3.3)

UK: Retail Sales (ex Auto Fuel) (Jun) % m/m (Mkt: -0.2 Prev: -0.3)

UK: Retail Sales (ex Auto Fuel) (Jun) % y/y (Mkt: 2.6 Prev: 2.2)

UK: Retail Sales (inc Auto Fuel) (Jun) 4cast: -1% m/m (Mkt: -0.3 Prev: -0.5)

UK: Retail Sales (inc Auto Fuel) (Jun) 4cast: 1.8% y/y (Mkt: 2.6 Prev: 2.3)

Still to be released

12:30 GMT - US: Initial Claims (13 Jul) k (Mkt: 216 Prev: 209)

12:30 GMT - US: Philadelphia Fed Survey (Jul) index (Mkt: 5 Prev: 0.3)

14:00 GMT - US: Leading Indicator (Jun) % m/m (Mkt: 0.1 Prev: 0)

23:30 GMT - JP: Natl CPI (Jun) 4cast: 0.8% y/y (Mkt: 0.7 Prev: 0.8)

Events & Auctions:

08:45 GMT - ES: Tap of Bono 07/24 (EUR 1.5bn)

08:45 GMT - ES: Tap of Oblig. 10/21 (EUR 1.5bn)

08:45 GMT - ES: Tap of Oblig. 7/30 (EUR 1bn)

08:50 GMT - FR: Tap of OAT 02/22 (EUR 3bn)

08:50 GMT - FR: Tap of OAT 03/25 (EUR 3.5bn)

08:50 GMT - FR: Tap of OAT 2.25% 10/22 (EUR 2.25bn)

08:50 GMT - FR: Tap of OATi 3/29 (EUR 0.6bn)

09:50 GMT - FR: Tap of OATei 0.1% 3/28 (EUR 0.4bln)

09:50 GMT - FR: Tap of OATei 0.1% 7/36 (EUR 0.5bln)

10:30 GMT- UK: G7 Finance Officials meet in Chantilly

12:30 GMT - CA: ADP Canada Releases June Payroll Estimates

13:30 GMT - US: Fed's Bostic speaks in Clarksville

14:00 GMT - ES: Bank of Spain's de Cos speaks in Peru

15:30 GMT - US: 4 wk Bills Auction

15:30 GMT - US: 8 wk Bills Auction

17:00 GMT - US: 10 yr TIP Auction

18:15 GMT - US: Fed's Williams speaks on monetary policy


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