European Morning Briefing 21.04

European Morning Briefing 21.04

• Asian equities traded mostly higher in the final trading session of the week amid the positive healthcare reform-inspired gains on Wall Street
• FX markets traded quiet amid a lack of tier 1 data releases, which saw the USD-Index hold below 100.00
• Looking ahead, highlights include UK retail sales, Canadian CPI, US mfg PMI, Existing Home Sales, BoE’s Saunders and ECB’s Praet


Asia equity markets traded higher across the board as the region took the impetus from the upbeat US close where stocks benefitted from optimism regarding tax and healthcare reforms. ASX 200 (+0.6%) was underpinned by outperformance in miners after increases in copper and iron ore prices as Dalian iron ore futures surged by 7% in early trade. Nikkei 225 (+0.8%) was benefitted from a weaker currency in which USD/JPY reclaimed 109.00, while Hang Seng (+0.1%) and Shanghai Comp. (+0.1%) gained after the PBoC continued to inject funds into the interbank market which resulted to a net weekly injection of CNY 170bln vs. Prev. CNY 70bln injection last week.

PBoC injected CNY 60bln in 7-day reverse repos, CNY 20bln in 14-day reverse repos and CNY 20bln in 28-day reverse repos, for a net weekly injection of CNY 170bln vs. last week's CNY 70bln net injection. (Newswires)

PBoC set CNY mid-point at 6.8823 (Prev. 6.8792)


Latest Elabe French Election poll showed 1st Round with Macron 24% (Unch), Le Pen 21.5% (-1.5pts), Fillon 21.5% (+0.5pts) and Melenchon 19.5% (+1.5pts). 2nd Round with Macron 65% vs. Le Pen 35%, Macron 65% vs. Fillon 35% and Macron 59% vs. Melenchon 41%. (Newswires)

Latest French Election Harris poll showed 2nd Round Poll with Macron 67% vs. Le Pen 33% and Melenchon 61% vs. Le Pen 39%. (Newswires)

A lone gunman armed with an automatic weapon opened fire on police in Paris which killed a police officer, before the gunman was killed in turn. Furthermore, some Twitter reports suggested that the attacker had been flagged as a serious threat to national security, while IS later claimed responsibility for the attack. (Le Parisien) As a result, French Presidential candidate Fillon has called for the presidential election to be postponed. (Newswires)

Brussels is reportedly demanding lifelong rights for EU citizens and their families in a move that would overturn PM May’s pledge to end the power of the European Court of Justice (ECJ) in Britain. (The Times)


FX markets traded quiet amid a lack of tier 1 data releases, which saw the USD-Index hold below 100.00. EUR/USD languished following a shooting attack in Paris that IS claimed responsibility for and which comes ahead of this weekend’s first round Presidential election. Elsewhere, JPY-crosses mildly pulled back after yesterday’s gains, with NZD/JPY leading the reversal on the back of weaker ANZ Consumer Confidence data.


The commodities complex remained mostly quiet overnight aside from Dalian iron ore prices which surged 7% in early trade. Gold held steady overnight as the greenback kept to a tight range, while copper prices marginally benefitted from the increased risk appetite. Elsewhere, oil prices traded sideways amid a lack of drivers which saw WTI crude futures languished below USD 51/bbl, with Goldman Sachs attributing the recent pressure to technical selling rather than fundamentals.


Fed is said to have intensified its balance sheet discussions with market participants as it seeks to gauge impact of balance sheet changes. (Newswires)

There were initial reports that Republicans are said to target a healthcare vote on Wednesday. However, a House Congressional source later commented that there will not be a vote on health care bill next Wednesday. (Newswires)

US Treasury Secretary Mnuchin stated that 'we are close to bring forward major tax reform'. (Newswires)

US President Trump is to sign 2 'financial-related' executive orders this Friday. (Newswires)

US Office of Management and Budget Director Mulvaney said the budget will include USD 200bln for infrastructure spending. (Newswires)



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