Forex - European Highlights - 11 January 2019

 11:12 (GMT) 11 Jan

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European Highlights

European Highlights - 11 January 2019 (0101-HKCF-C01)

11 January 2019

Asia FX and News -

+ Fed's Clarida said Fed can Afford to be Patient, Willing to Alter Balance Sheet Run-Off if Necessary
+ Australia Nov. Retail Sales Rise 0.4% M/M; Est. 0.3% Gain

+ Japan's Nov. Household Spending -0.6% Y/y; Est. -0.1%

+ Japan FinMin Aso said Highly Likely to Revise FY19/20 Budget due to Wage Data Flaw

+ China Liu to Visit U.S. for Trade Talks on Jan 30-31 ~ WSJ

+ Weakness in USD resurfaces in Asia. Fed's Clarida reinforced the dovish communications we have seen this week from his colleagues, US yields dipped. USD/JPY tracked US10s lower, though ranges are tight. EUR and GBP rose against the USD but both are haven't recovered to the opening levels in Europe on Thursday. EUR/CHF extends the steep rise into 100dma. Commodities currencies outperformed, with NZD at the top. AUD/USD hesitated to push above 0.72 on better retail sales data initially before broad dollar weakness lifted offers there. NZD/USD shot above 200dma at 0.68 strongly. USD/CAD erased gains from Thursday with 1.32 threatened to break.

Nikkei and JGBs -

+ Nikkei +0.97%, JGB 10yr yield at 0.015%

Europe FX and news -

+ UK monthly GDP was stronger than expected in November, rising by 0.2%, but this relied on strength in services with manufacturing falling 0.3%. Both services strength and the rise in EU imports which worsened the trade deficit may be related to pre-Brexit inventory building. GBP was initially little changed after the data, but subsequently rallied after selling off earlier in the session, helped by a BBC report of a Tusk/Juncker letter setting out reassurances on the backstop. But increasing talk that a "no deal" Brexit was being ruled out has had no discernible positive impact on GBP.

+ Oil prices continued to edge higher through the European morning, supporting further gains in the NOK and CAD.

+ The Swedish newspaper Aftonbladet reported that Swedish Centre and Liberal parties would agree to back Social Democrat leader Lofven for a second term, potentially ending months without a government. EUR/SEK unmoved.

+ EUR/USD quiet in tight range around 1.1525

Equities and bonds

+ Repeat of Thur, with better Asia buying of USTs on the dovish Fed providing a firm backdrop to the EGB open. Bunds nose below 0.19%. BTPs trade well through supply and come out tighter, IT10s -4bp, catching up strength elsewhere. Gilts track bunds, if off the morning's bests out of GDP data.


AU: AIG Construction PMI (Dec) 46.2 (Mkt: Prev: 44.5)

NZ: Building Permits (Nov) -2.0% m/m (Mkt: Prev: 1.4R)

AU: Retail Trade (Nov) 0.4% m/m (Mkt: 0.3 Prev: 0.3)

JP: Economy Watchers Survey (Dec) 48.0 (Mkt: 50.7 Prev: 51)

07:30 GMT - FR: BoF Business Sentiment (Dec) (Mkt: 100 Prev: 101)

09:00 GMT - IT: Industrial Production (sa) (Nov) % m/m (Mkt: -0.3 Prev: 0.1)

09:00 GMT - IT: Industrial Production (wda) (Nov) % y/y (Mkt: 0.4 Prev: 1)

09:30 GMT - UK: Construction Output (sa) (Nov) % m/m (Mkt: 0.3 Prev: -0.2)

09:30 GMT - UK: Construction Output (sa) (Nov) % y/y (Mkt: 2.7 Prev: 3.8)

09:30 GMT - UK: GDP (Nov) 4cast: 0.0% m/m (Mkt: 0.1 Prev: 0.1)

09:30 GMT - UK: Industrial Production (Nov) 4cast:0.0% m/m (Mkt: 0.2 Prev: -0.6)

09:30 GMT - UK: Industrial Production (Nov) % y/y (Mkt: -0.7 Prev: -0.8)

09:30 GMT - UK: Manufacturing Production (Nov) 4cast: 0.2% m/m (Mkt: 0.4 Prev: -0.9)

09:30 GMT - UK: Manufacturing Production (Nov) % y/y (Mkt: -0.7 Prev: -1)

09:30 GMT - UK: Trade Balance (Non-EU) (Nov) GBP bn (Mkt: -3.775 Prev: -4.251)

09:30 GMT - UK: Visible Trade Balance (Nov) GBP bn (Mkt: -11.4 Prev: -11.873)

10:00 GMT - GR: CPI (Dec) % y/y (Mkt: Prev: 1)

10:00 GMT - GR: HICP (Dec) % y/y (Mkt: Prev: 1.1)

Still to Be Released:

13:30 GMT - US: CPI (Dec) 4cast: -0.2% m/m (Mkt: -0.1 Prev: 0)

13:30 GMT - US: CPI (ex Food & Energy) (Dec) 4cast: 0.16% m/m (Mkt: 0.2 Prev: 0.2)

19:00 GMT - US: Monthly Budget Statement (Dec) (Mkt: Prev: -204.9)

Events & Auctions:

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

EU: ECB's Mersch and Nowotny Speak in Bratislava

03:30 GMT - JP: 3mth Bills Auction

10:00 GMT - IT: Tap of BTP 2.3 10/15/21 (EUR 3bn)

10:00 GMT - IT: Tap of BTP 2.5 11/15/25 (EUR 2.25bn)

10:00 GMT - IT: Tap of BTP 3.45 3/1/48 (EUR 1.25bn)

11:00 GMT - UK: 182-Day Bills Auction (GBP 1.5bn)

11:00 GMT - UK: 28-Day Bills Auction (GBP 0.5bn)

11:00 GMT - UK: 91-Day Bills Auction (GBP 2bn)

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