Tuesday 28th June: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei rose 0.60 %, Shanghai Composite fell 0.10 %, Hang Seng declined 0.90 %, ASX 200 lost 0.45 %
  • Commodities: Gold at $1318 (-0.45 %), Silver at $17.71 (-0.30 %), WTI Oil at $46.95 (+1.30 %), Brent Oil at $48.38 (+1.30 %)
  • Rates: US 10 year yield at 1.46, UK 10 year yield at 0.93, German 10 year yield at -0.12

News & Data:

  • Australia ANZ Roy Morgan Weekly Consumer Confidence Index 26-Jun: 116.8 (prev. 118.8)
  • S&P downgrades UK to AA/negative from AAA/negative
  • PBOC sets USD/CNY fix at 6.6528 (prev. fix 6.6375, prev. close 6.6585)
  • PBOC say CNY is stable against a basket of currencies after Brexit, to stick to current forming mechanism
  • Japan FinMin Aso: Watching FX markets with a sense of urgency, will take action if needed
  • BoJ's Kuroda declines to comment on any emergency BoJ meeting, says to continue monetary policy management as detailed before
  • Japan Chief Cabinet Sec. Suga: Will continue to closely monitor markets, important to respond to risks, haven't decided on size of stimulus
  • Japan Economy Minister Ishihara: No specific order on any economic stimulus from Abe

Markets Update:

Despite the many uncertainties that remain after the Brexit vote, risk appetite has improved slightly overnight. Asian stock markets are mostly lower, but in FX, risk currencies gained vs the US Dollar and Japanese Yen. GBP/USD bounced off the 1.32 level in the early Asian session and rose to a high of 1.3335 after the Tokyo open. USD/JPY was caught in a rather tight range overnight; it traded 101.55-102.20.

EUR/USD came under pressure yesterday, but managed to stay above the 1.0970 support level. In Asia, the Euro caught a bid and rose to 1.1065 against the Dollar. Strong flows were seen in EUR/GBP, which rose to a high of 0.8380 in yesterday's EU session.

The commodity currencies benefited from the change in risk sentiment. The Australian Dollar rose from 0.7320 in the early session to a high of 0.74. Resistance is seen at 0.7420 and yesterday's high at 0.7450. Similar price action was seen in NZD/USD, which rallied from 0.6980 to 0.7055.

Upcoming Events:

  • 13:30 BST – US GDP
  • 15:00 BST – US CB Consumer Confidence
  • 15:00 BST – US Richmond Manufacturing Index

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