Forex - European Highlights - 10 July 2019

 10:18 (GMT) 10 Jul

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European Highlights

European Highlights - 10 July 2019 (0101-MSKZ-C01)

10 July 2019

Asia FX and News -

+ Trump threatens veto of House defense bill over spending levels, wall

+ New Zealand June Food Prices Fall 0.7% M/m

+ Australia July Consumer Confidence Falls 4.1% M/m

+ China June Consumer Prices +2.7% Y/y; Matching Estimate, Producer Prices Unch. Y/y; -0.3% M/m

+ Major FX fairly steady in Asia as markets await Powell's testimony to validate the fully priced in July cut, with interest on whether he will frame this as a one-off precaution or the start of an easing cycle. NZD/USD weakens with a decline in food prices in June setting the softer tone for the Kiwi. The pair suffered a flash drop to 0.6568 from 0.6597, reportedly on huge orders, but quickly recovered to just beneath 0.66. AUD/USD glided lower as consumer confidence fell but still supported by Tues's lows around 0.6923. USD/JPY rose towards 109 around the Tokyo fix, likely on importers' demand, before easing back to around 108.90. EUR/GBP retested 0.90.

Nikkei and JGBs -

+ Nikkei -0.15%, JGB 10yr yield at -0.124%

Europe FX and news

+ The USD was weaker through the European morning session, with stronger than expected French and Italian production numbers helping to extend the EUR/USD recovery above 1.12. French industrial production rose 2.1% in May, against a 0.3% rise expected, while Italian production rose 0.9%, against 0.1% expected.

+ GBP initially weakened against the EUR, with EUR/GBP pushing to new 6 month highs above 0.90, but eased back later in the morning after the UK GDP data. This rose 0.3% as expected in May, but the upward revision to the March data meant the 3m/3m rate was stronger than expected at 0.3%, also improving prospects for Q2 GDP.

+ Norwegian CPI was weaker than expected at 1.9% y/y in June, against market expectations of a 2.1% rise. EUR/NOK moved a couple of figures higher in response, though in practice we doubt this affects Norges Bank policy.

Bonds and equities

+ Core bonds under pressure through supply and into Powell, with big upside surprise on French IP also adding to the bund corrective bear steepening action and future pullback, DE30s +7.5bp. Upward back revisions to UK GDP keep gilts tagging along, GB10s +6.5bp. Block trades noted on USTs pressing the steepening there. US10s above 2.1% bounce resistance. BTPs outperform after 50yr syndication met with good overseas buying (80%) led by Germany yesterday.


JP: PPI (Jun) -0.5% m/m (Mkt: -0.1 Prev: -0.1)

JP: PPI (Jun) -0.1% y/y (Mkt: 0.4 Prev: 0.6R)

NL: Manufacturing Production (May) -0.5% m/m (Prev: 0.6)

NL: Manufacturing Production (May): -1.8%y/y (Prev: -1.2)

NO: CPI (Jun) % m/m (Mkt: 0.2 Prev: -0.3)

NO: CPI (Jun) % y/y (Mkt: 2.1 Prev: 2.5)

NO: CPI Core (Jun) % m/m (Mkt: 0.5 Prev: -0.2)

NO: CPI Core (Jun) % y/y (Mkt: 2.4 Prev: 2.3)

FR: Industrial Production (May) % m/m (Mkt: 0.3 Prev: 0.4)

FR: Industrial Production (May) % y/y (Mkt: 1.6 Prev: 0.4)

FR: Manufacturing Production (May) % m/m (Mkt: 0.3 Prev: 0)

FR: Manufacturing Production (May): % y/y (Prev: 0.5)

IT: Industrial Production (sa) (May) % m/m (Mkt: 0.2 Prev: -0.7)

IT: Industrial Production (wda) (May) % y/y (Mkt: -1.5 Prev: -1.5)

UK: Construction Output (sa) (May) 4cast: -0.5% m/m (Mkt: 0.1 Prev: -0.4)

UK: Construction Output (sa) (May) 4cast: -0.1% y/y (Mkt: 0.9 Prev: 2.4)

UK: GDP (May) 4cast: 0.25% m/m (Mkt: 0.3 Prev: -0.4)

UK: Index of Services (May) 4cast: 0% 3m/3m (Mkt: 0.1 Prev: 0.2)

UK: Index of Services (May) 4cast: -0.1% m/m (Mkt: 0.1 Prev: 0)

UK: Industrial Production (May) 4cast: 2.2% m/m (Mkt: 1.5 Prev: -2.7)

UK: Industrial Production (May) 4cast: 1.8% y/y (Mkt: 1.2 Prev: -1)

UK: Manufacturing Production (May) 4cast: 3% m/m (Mkt: 2.2 Prev: -3.9)

UK: Manufacturing Production (May) 4cast: 1.8% y/y (Mkt: 1.1 Prev: -0.8)

UK: Trade Balance (Non-EU) (May) GBP bn (Mkt: -4.8 Prev: -4.595)

UK: Visible Trade Balance (May) GBP bn (Mkt: -12.55 Prev: -12.113)

GR: HICP (Jun) % y/y (Prev: 0.2)

PT: HICP (Jun F) % m/m (Prev: 0.4)

PT: HICP (Jun F) % y/y (Prev: 0.7)

Still to Be Released


14:00 GMT - CA: BoC Rate (10 Jul) 4cast: 1.75 (Mkt: 1.75 Prev: 1.75)

14:00 GMT - US: Wholesale Inventories (May F) % m/m (Mkt: 0.4 Prev: 0.4)

23:01 GMT - UK: RICS Housing Survey (Jun) % (Mkt: -12 Prev: -10)

Events & Auctions:

GMT - NZ: RBNZ's Orr Scheduled to Speak on Phase 2 Review

05:50 GMT - US: Fed's George speaks in Helsinki

09:00 GMT - GR: 91 days Bills Auction (EUR 0.625bn)

09:00 GMT - IT: 12mth Bills Auction

09:00 GMT - IT: 368 days Bills Auction (EUR 6.5bn)

09:30 GMT - DE: New Bund 08/29 (EUR 4bn)

09:30 GMT - PT: Tap of OT 1.75% 06/29 (EUR 0.75bn)

09:30 GMT - PT: Tap of OT 4.1% 02/45 (EUR 0.5bn)

14:00 GMT - CA: Bank of Canada Monetary Policy Report

14:00 GMT - US: Fed's Powell Testifies to House Financial Services Panel

17:00 GMT - US: 10yr Notes Auction (USD 24bn)

17:10 GMT - UK: BoE's Tenreyro Speaks in London

17:30 GMT - US: Fed's Bullard to speak at Washington University

18:00 GMT - US: FOMC Minutes

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