European Morning Briefing 08.06

European Morning Briefing 08.06

• Asian equities saw an indecisive session ahead of key risk events with notable data releases including Japanese GDP and Chinese Trade
• USD held onto the gains seen after Former FBI Director Comey’s prepared statement was deemed less detrimental than some had feared
• Looking ahead, highlights include ECB rate decision, UK election and Former FBI Director Comey’s testimony

ASIA
Asia equity markets were choppy amid a cautious tone ahead of today’s trifecta of key risk events including the UK election, ECB policy meeting and to a lesser extent, former FBI Director Comey’s testimony after the pre-released statement didn’t appear to be too damaging for President Trump. Indecisive trade was seen in ASX 200 (+0.1%) and Nikkei 225 (-0.1%), with Australia stocks initially led lower by weakness in energy after a surprise DoE build. However, a mild improvement in tone was observed amid encouraging Chinese Exports and Imports figures, while Japanese stocks were driven by a temperamental JPY. Elsewhere, Shanghai Comp. (+0.1%) and Hang Seng (+0.2%) were underpinned by the Chinese trade data and after the PBoC conducted another respectable liquidity injection.

Chinese Trade Balance (CNY)(May) M/M 281.6bln vs. Exp. 324.1bln (Prev. 262.3bln). (Newswires)
Chinese Exports (CNY)(May) Y/Y 15.5% vs. Exp. 13.5% (Prev. 14.3%)
Chinese Imports (CNY)(May) Y/Y 22.1% vs. Exp. 8.3% (Prev. 18.6%)

Chinese Trade Balance (USD)(May) 40.8bln vs. Exp. 47.8bln (Prev. 38.1bln). (Newswires)
Chinese Exports (USD)(May) Y/Y 8.7% vs. Exp. 7.2% (Prev. 8.0%)
Chinese Imports (USD)(May) Y/Y 14.8% vs. Exp. 8.3% (Prev. 11.9%)

PBoC injected CNY 30bln in 7-day reverse repos, CNY 50bln in 14-day reverse repos and CNY 70bln in 28-day reverse repos.
PBoC set CNY mid-point at 6.7930 (Prev. 6.7858)

Japanese GDP Growth Rate Final (Q1) Q/Q 0.3% vs. Exp. 0.6% (Prev. 0.5%). (Newswires)
Japanese GDP Growth Annualized Final (Q1) Y/Y 1.0% vs. Exp. 2.4% (Prev. 2.2%)

EUROPE/UK

UK RICS House Price Balance (May) M/M 17% vs. Exp. 20% (Prev. 22%). (Newswires)

YouGov UK Election Poll showed Conservatives 42% (Prev. 42%) vs. Labour 35% (Prev. 38%). (Newswires)
Survation UK Election Poll showed Conservatives 41% (Prev. 40%) vs. Labour 40% (Prev. 39%)
Kantar UK Election Poll showed Conservatives 43% (Prev. 43%) vs. Labour 38% (Prev. 33%)
Comres UK Election Poll showed Conservatives 44% (Prev. 47%) vs. Labour 34% (Prev. 35%)
ICM UK Election Poll showed Conservatives 46% (Prev. 45%) vs. Labour 34% (Prev. 34%)
PanelBase UK Election Poll showed Conservatives 44% (Prev. 44%) vs. Labour 36% (Prev. 36%)
BMG UK Election Poll showed Conservatives at 46% vs. Labour at 33%.

FX

FX markets were relatively quiet during Asia hours with the USD holding onto the gains seen after Former FBI Director Comey’s prepared statement was deemed less detrimental than some had feared. The mild relief rally in the greenback buoyed USD/JPY to test 110.00 to the upside, although USD/JPY then retreated heading into the European morning as the 10yr yield surged. AUD was choppy with weak Australian trade data counterbalanced by their Chinese counterparts, while GBP/USD was flat but remained near yesterday’s best levels, as the pair exhibited calmness before a possible thunderstorm from today’s general election in which polls suggest the Conservative party winning in a tighter contested race.

Australian Trade Balance (AUD)(Apr) M/M 555mln vs. Exp. 1.95bln (Prev. 3.11bln, Rev. 3.17bln). (Newswires)
Australian Exports (Apr) M/M -8% (Prev. 2%)
Australian Imports (Apr) M/M -1% (Prev. 5%)

COMMODITIES

WTI held near yesterday’s lows and failed to make any significant recovery from the DoE-triggered losses, in which an unexpected build pushed prices lower by around 5% to beneath USD 46/bbl. Elsewhere, gold prices slipped slightly alongside the mildly firmer greenback, whilst copper gained amid the better than expected Chinese Exports and Imports data.

China May YTD Iron Ore Imports rose 11.3% Y/Y to 91.5mln tons. (Newswires)

GEOPOLITICAL

North Korea is confirmed to have fired several ground-to-ship missiles. (Newswires)

Qatar's military was placed on a high state of alert and issued warnings on maritime borders. (Twitter)

US

Former-FBI Director Comey’s prepared remarks were released ahead of his testimony tomorrow, which didn’t appear to contain any smoking guns that suggest Trump asked Comey to 'drop' his investigations into Russian links/Flynn, while it confirmed that Comey informed Trump he wasn't under FBI investigation. (Newswires)


(tfx)

About Author

Our research team will provide all technical and fundamental news as well as all inside information coming from London's City desks to help investors trade fx and stock markets. Be sure that you already follow our twitter account @XMarketsuk in order to be up to date with all latest analysis, news and inside information.

Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. X Markets and XSpot. do not take into account your personal investment objectives or financial situation. X Markets and XSpot. make no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any member of X Markets Websites’ team, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of X Markets and XSpot. This communication must not be reproduced or further distributed without prior permission.

Risk Warning: Forex (FX) and Contracts for Difference (’CFDs’) are complex financial products that are traded on margin. Trading FX and CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, FX and CFDs may not be suitable for all investors because you may lose all your invested capital. You should not risk more than you are prepared to lose. Before deciding to trade, you need to ensure that you understand the risks involved taking into account your investment objectives and level of experience. Past performance of FX and CFDs is not a reliable indicator of future results. Most FX and CFDs have no set maturity date. Hence, a CFD position matures on the date you choose to close an existing open position. Seek independent advice.