European Morning Briefing 13.06

European Morning Briefing 13.06

• Asian equities managed to avoid further losses despite a continuation of tech-related selling pressure seen on Wall Street

• In FX, USD/JPY nursed yesterday’s losses to test 110.00 to the upside, while EUR/USD languished after relinquishing the 1.1200 handle

• Looking ahead, highlights include UK CPI, German ZEW, US PPI and API Inventories


Asia shrugged off the negative lead from US where the tech sector once again underperformed and posted its worst 2-day period YTD. Nonetheless, the tone in Asia improved throughout the session with ASX 200 (+1.2%) underpinned by financials after gains in the big 4 banks, while Nikkei 225 (Unch.) recovered from early losses alongside a rebound in USD/JPY. Elsewhere, Shanghai Comp. (+0.4%) was indecisive with early weakness observed alongside speculation the PBoC may raise rates in response to a US Fed hike and after another lacklustre liquidity operation, although Chinese stocks then recovered to conform to the overall improvement of risk sentiment in the region.

PBoC injected CNY 10bln in 7-day reverse repos and CNY 40bln in 28-day reverse repos. (Newswires)
PBoC set CNY mid-point at 6.7954 (Prev. 6.7948)


There were press reports that the Conservative Party and Labour Party held secret talks on a soft Brexit. (Telegraph)

UK lawmaker said that PM May has recognised that a broader consensus is needed for Brexit. (Newswires)

EU said no agreement reached with UK on start of Brexit negotiations. (Newswires)


In FX markets, commodity linked currencies outperformed with AUD supported as AUD/JPY reclaimed the 83.00 level, while USD/CAD slipped below 1.3300 after hawkish comments from BoC’s Wilkins who stated the BoC is to assess if less stimulus is needed as growth continues. Elsewhere, USD/JPY nursed yesterday’s losses to test 110.00 to the upside, while EUR/USD languished after relinquishing the 1.1200 handle.

BoC’s Wilkins said the BoC is to assess if less stimulus is needed as growth continues and commented that Q1 growth figures are “pretty impressive”.


The commodities complex saw quiet trade overnight, although WTI crude futures were marginally higher as support held at USD 46/bbl. Elsewhere, Gold (Unch.) prices held near yesterday’s lows amid a lack of drivers and copper was also rangebound amid an indecisive risk tone in its top consumer China.


US Republican Senator John Cornyn stated that a vote on the Obamacare replacement in Senate is unlikely the month. (Newswires)




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.