Forex - US North American Summary and Highlights 13 Jun


 20:08 (GMT) 13 Jun

  [Forex Highlights]

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US North American Summary and Highlights 13 Jun (0101-LWPB-C01)

Overview

Geopolitical concerns continued to boost bonds, while higher oil on the tanker attack lifted equities along with easing expectations.

News highlights

- Pompeo - officials have determined Iran responsible for tanker attack

- Trump - neither US nor Iran ready to make a deal.

- US Jun-08 Initial Claims 222 k (Prev: 219 Mkt: 215), continued claims also tick up. Import prices -0.3%

Currencies:

- The SNB made no significant change to policy at today's Monetary Policy meeting, leaving the policy rate unchanged at -0.75%, and maintaining their preparedness to be active in the FX market while deeming the CHF to be "highly valued". The key rate focus has been shifted to the SNB policy rate rather than the 3m LIBOR rate to reflect the impending removal of LIBOR, but does not represent a substantive change in monetary approach. EUR/CHF fell after the meeting, testing but holding above 1.12, perhaps representing some disappointment at the lack of SNB easing, or testing the SNB willingness to prevent further strengthening of the currency.
- The USD was marginally stronger through the European morning, making modest gains against both the EUR and the JPY. GBP was weaker across the board reversing some of Wednesday's gains reflecting the failure of the opposition initiative to prevent a no deal Brexit.

- The first round of the UK Conservative Party leadership election produced a victory for Boris Johnson who garnered 114 votes, ahead of Jeremy Hunt with 43 votes in second place. There are more rounds to go to whittle the field down to 2, but this result makes Johnson overwhelmingly likely to be the next UK Prime Minister. GBP rallied slightly on the news, though the rationale is unclear, with EUR/GBP falling on the announcement, dragging EUR/USD down with it.

Bonds:

Geopolitical issues helped keep USTs firm. The 30yr auction met with strong demand to complete a good week of sales. Short end further lifted as US blames Iran.

2s -5.7bps @ 1.82%, 5s -4.8bps @ 1.82%, 10s -3.5bps @ 2.09%, 30s -2.0bps @ 2.60%

Agency Spreads: Freddie/Fannie 5s +0.1/-0.2 bps, 10s +0.2/-0.9 bps.

Swap Spreads: 2s -1.99bps, 5s -1.45bps, 10s -1.55bps.

Equities

Energy stocks bounce on the jump in oil prices, while big tech stocks also recovering from yesterday's decline. Easing expectations still bolstering the broader market.

Still to Be Released -

04:30 GMT - JP: Capacity Utilisation (Apr F) % m/m (Prev: -0.4)

04:30 GMT - JP: Industrial Production (Apr F) % m/m (Prev: 0.6)

04:30 GMT - JP: Industrial Production (Apr F) % y/y (Prev: -1.1)

04:30 GMT - NL: Retail Trade (Apr) % y/y (Prev: 1.1)

04:30 GMT - NL: Trade Balance (Apr) EUR bn (Mkt: 5.3 Prev: 5.3)

06:00 GMT - DE: Wholesale Price Index (May) % y/y (Prev: 2.1)

06:00 GMT - FI: CPI (May) % m/m (Prev: 0.6)

06:00 GMT - FI: CPI (May) % y/y (Prev: 1.5)

06:00 GMT - FI: GDP (Apr) % (Prev: 1.1)

06:45 GMT - FR: CPI (May F) % m/m (Mkt: 0.2 Prev: 0.2)

06:45 GMT - FR: CPI (May F) % y/y (Mkt: 1 Prev: 1)

06:45 GMT - FR: HICP (May F) % m/m (Mkt: 0.2 Prev: 0.2)

06:45 GMT - FR: HICP (May F) % y/y (Mkt: 1.1 Prev: 1.1)

07:30 GMT - SE: CPI (May) % y/y (Mkt: 2 Prev: 2.1)

07:30 GMT - SE: CPIF (Underlying) (May) % y/y (Mkt: 1.9 Prev: 2)

09:00 GMT - IT: HICP (May F) % y/y (Mkt: 0.9 Prev: 0.9)

10:00 GMT - PT: HICP (May F) % m/m (Prev: 0.3)

10:00 GMT - PT: HICP (May F) % y/y (Prev: 0.4)

12:30 GMT - US: Retail Sales (May) 4cast: 0.6% m/m (Mkt: 0.6 Prev: -0.2)

12:30 GMT - US: Retail Sales (ex Autos) (May) 4cast: 0.3% m/m (Mkt: 0.4 Prev: 0.1)

13:15 GMT - US: Capacity Utilization (May) 4cast: 78% (Mkt: 78 Prev: 77.9)

13:15 GMT - US: Industrial production (May) 4cast: 0.3% m/m (Mkt: 0.2 Prev: -0.5)

14:00 GMT - US: Business Inventories (Apr) 4cast: 0.5% m/m (Mkt: 0.4 Prev: 0)

14:00 GMT - US: Univ of Mich Sentiment (Jun P) (Mkt: 98 Prev: 100)

Events & Auctions:

EU: ECB's Enria and Bank of Italy's Panetta speak in Frankfurt

03:30 GMT - JP: 3mth Bills Auction

10:00 GMT - UK: 182-Day Bills Auction (GBP 2.5bn)

10:00 GMT - UK: 28-Day Bills Auction (GBP 0.5bn)

10:00 GMT - UK: 91-Day Bills Auction (GBP 2bn)

13:55 GMT - UK: BoE's Carney speaks in London


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