Tuesday 18th July: European Open Briefing

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Tuesday 18th July: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei down 0.75 %, Shanghai Composite fell 0.60 %, Hang Seng declined 0.10 %, ASX 200 lost 1.15 %
  • Commodities: Gold at $1237 (+0.30 %), Silver at $16.17 (+0.40 %), WTI Oil at $46.10 (+0.20 %), Brent Oil at $48.50 (+0.20 %)
  • Rates: US 10-year yield at 2.30, UK 10-year yield at 1.28, German 10-year yield at 0.58

News & Data:

  • New Zealand CPI q/q 0.0 % vs 0.2 % expected
  • New Zealand CPI y/y 1.7 % vs 1.9 % expected
  • China House Prices y/y 10.2 % vs 10.4 % previous
  • Australia Roy Morgan Weekly Consumer Confidence Index 112.5 (prev 113.0)
  • PBoC Sets Yuan Mid-Point At 6.7611
  • Oil prices stable as strong demand meets ongoing supply glut – RTRS

Markets Update:

The US Dollar came under renewed pressure after it became clear that US President Trump’s healthcare reform is dead. This makes it unlikely that his economic reforms will pass either. EUR/USD rallied above 1.15 and there is little resistance now until 1.16. GBP/USD however, is struggling with resistance at 1.31. The pair might remain quiet ahead of today’s inflation release, which could determine its short-term direction.

USD/JPY tested 112 and bounced off it. Support is also seen at the 200 DMA at 111.80. A dovish Bank of Japan and risk-on sentiment in markets have kept the USD/JPY supported so far. However, a daily close below the 200 DMA would signal that further losses are ahead.

AUD/USD has reached fresh highs and is likely to test 0.80 soon. Commodity prices have bounced and recent Chinese econ data has been strong – two factors which have kept the AUD bid. Meanwhile, NZD/USD came under pressure after weak inflation data, but managed to retrace the losses amid broad USD selling.

Upcoming Events:

  • 09:30 BST – UK CPI
  • 10:00 BST – German ZEW Economic Sentiment
  • 10:00 BST – Euro Zone ZEW Economic Sentiment
  • 14:30 BST – Bank of England Governor Carney speaks

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