Wednesday 15th July: European Open Briefing

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Wednesday 15th July: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei up 0.30 %, Shanghai Composite lost 2.40 %, Hang Seng fell 0.45 %, ASX gained 0.95 %
  • Commodities: Gold at $1154 (+0.10 %), Silver at $15.32 (+0.05 %), WTI Oil at $53.30 (+0.50 %), Brent Oil at $58.90 (+0.35 %)
  • Rates: US 10 year yield at 2.40, UK 10 year yield at 2.13, German 10 year yield at 0.84

 

News & Data:

  • BoJ Keeps Monetary Policy Steady, Pledges To Increase Monetary Base At Annual Pace Of JPY 80 Trln
  • BoJ's Kiuchi Votes Against Policy Decision, Proposed Tapering Annual JGB Purchases To JPY 45 Trln, Which Was Turned Down By 8-1
  • China GDP 1.7 % q/q, Expected: 1.7 %, Previous: 1.3 %
  • China GDP 7.0 % q/q, Expected: 6.8 %; Previous: 7.0 %
  • CHina Industrial Production 6.8 %, Expected: 6.0 %, Previous: 6.1 %
  • China Retail Sales 10.6 %, Expected: 10.2 %, Previous: 10.1 %
  • China Fixed Asset Investment 11.4 % y/y, Expected: 11.2 %, Previous: 11.4 %
  • Australia Westpac Consumer Sentiment -3.2 %, Previous: -6.9 %
  • IMF say Greek public debt is highly unsustainable; debt-GDP to peak at 200% next two years
  • IMF says Greece needs EUR 85bln in funding through 2018 (EUR 25bln more than 2 months ago)
  • Asian shares pare gains as China markets slump – RTRS
  • China growth beats forecasts at 7 percent as activity picks up – RTRS

 

Markets Update:

A rather quiet overnight sesssion in FX, despite the decent amount of economic data. China released its GDP, Industrial Production and Retail Sales data and all of them beat expectations. The GDP number was expected to arrive at 6.8 %, but it came in at 7.0 %. The Australian Dollar rose after the data releases, while the reaction in the Asian stock markets was rather mixed.

The Bank of Japan left interest rates and the size of the QE progamme unchanged, as expected. One BoJ member wanted to decrease QE to 45 trillion, but this was turned down by a 8-1 vote. The central bank also downgraded some of ist economic forecasts, with the average GDP growth estimate for 2015 now at 1.7 % vs 2.0 % previously and the average CPI estimate at 0.7 % vs 0.8 % previously. There was not much of a reaction in USD/JPY and the JPY pairs, as traders are now waiting for the BoJ press conference, scheduled for 07:30 BST.
 

Upcoming Events:

  • 07:30 BST – Bank of Japan Press Conference
  • 07:45 BST – French CPI
  • 09:30 BST – UK Average Earnings
  • 09:30 BST – UK Unemployment Rate
  • 09:30 BST – UK Employment Change
  • 13:30 BST – US PPI
  • 13:30 BST – US NY Empire State Manufacturing Index
  • 15:00 BST – Fed Chair Yellen speaks
  • 15:00 BST – Bank of Canada Interest Rate Decision
  • 15:00 BST – Bank of Canada Monetary Policy Report
  • 16:15 BST – BoC Governor Poloz speaks
  • 19:00 BST – US Beige Book
  • 20:00 BST – FOMC Member Williams speaks
  • 23:45 BST – New Zealand CPI

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