European Morning Briefing - 11.07

European Morning Briefing - 11.07

• Asian equities traded with little in the way of firm direction with newsflow once again on the light side overnight
• FX markets saw USD/JPY continue its ascent, reaching 4-month highs while NZD underperformed
• Looking ahead, highlights include US JOLTS, APIs, BoE’s Haldane, Broadbent, ECB’s Coeure, Constancio, Fed’s Brainard and Kashkari


Asian equities saw a lack of firm direction overnight amid quiet newsflow. This was despite a resumption in the PBoC’s open market operations with a CNY 40bln injection for the first time in 13 days (however, was net neutral with CNY 40bln of prior injections maturing). The Nikkei 225 (+0.4%) failed to find any firm direction, while ASX 200 (-0.1%) was choppy and failed to hold on to the early material and energy led advances. Chinese bourses yet again traded in mixed fashion with broad based gains keeping the Hang Seng (+1.0%) afloat, while the Shanghai Comp (-0.2%) treaded water.

PBoC injected CNY 30bln and CNY 10bln through 7-day and 14-day reverse repos; first injection for 13 days. (Newswires)
PBoC set the CNY mid-point at 6.7983 vs. Prev. 6.7964


UK BRC Sales like-for-like (Jun) Y/Y 1.2% Exp. 0.5% (Prev. -0.4%); highest non-Easter reading since Oct'16. Rising food prices was the main driver of spending growth, consumers more cautious over non-food spending. (Newswires)


NZD was the notable underperformer as selling renewed after tripping stops through 0.7250, which also coincided with the drop in short-end NZ yields. Alongside this, AUD/NZD made a breach through 1.0500 which came in light of upbeat NAB surveys. Elsewhere, USD/JPY saw mild upside after finding support at the 114.00 level and amid a mostly positive risk tone in the region, which saw the pair print its highest level in 4 months.


Quiet session overnight in the commodities complex, WTI and Brent crude prices rising 0.4% with the latter consolidating above USD 47/bbl, while in precious metals, gold had been 0.2% softer amid the modest risk on tone in Asia.
CME lowered August RBOB futures margin to USD 3000 from USD 3200 per contract and lowers Natgas futures margins to USD 1750 from USD 1900 per contract.


Fed's Williams (Soft Hawk, Non-Voter) said if US inflation does not pick up then this would argue for slower policy tightening. Added that its reasonable to expect one more rate hike this year, while his own view is to start adjustment of balance sheet in the next few months. (Newswires)

President Trump plans to nominate former treasury official Randal Quarles to be the first Federal Reserve Vice Chairman of Supervision. (WSJ) This had been touted in April.


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.