European Morning Briefing 12.05

European Morning Briefing 12.05

• Overnight trade saw an overall lack of pertinent macro newsflow with Asian equities subsequently trading with little in the way of firm direction

• Similar price action was also observed in FX markets with GBP/USD unable to recoup yesterday’s BoE-inspired losses

• Looking ahead, highlights include US CPI, Retail Sales, Uni. Of Michigan, Fed’s Evans, Harker and ECB’s Constancio


Asia equity markets traded mixed following the lacklustre lead from Wall St. where retailers were pressured amid soft earnings from Macy's, while a lack of tier-1 data or drivers added to the subdued tone heading into the weekend. ASX 200 (-0.8%) traded in the red as REIT and energy sectors underperformed, while Nikkei 225 (-0.5%) was also negative alongside a firmer currency after USD/JPY relinquished the 114.00 handle. Shanghai Comp. (+0.4%) and Hang Seng (+0.1%) were choppy, but still outperformed the region following a CNY 459bln Medium-term Lending Facility operation by the PBoC. 10yr JGBs tracked the gains in T-notes amid a risk averse tone in Japan, while the curve slightly steepened on mild underperformance in the super long end.

PBoC skipped open market operations, but injected CNY 459bln via its medium-term lending facility. (Newswires)
PBoC set CNY mid-point at 6.8948 (Prev. 6.9051).


ECB's Praet said `we are not yet there' on normalisation debate. (Newswires)


FX markets traded rangebound overnight with the USD index flat amid a lack of key data releases to spur price action. Elsewhere, GBP/USD failed to make any significant recovery from its BoE-triggered losses and remain below the 1.2900 level, while antipodeans were mixed with AUD initially outperforming its counterpart across the ditch as AUD/NZD tested the 1.0800 level to the upside.


Trade across the commodities complex was uneventful, with copper and gold (+0.2%) prices flat throughout the session amid a lack of drivers. Elsewhere, oil prices also traded sideways in which WTI crude futures sat on minimal gains and eyed the USD 48/bbl level to the upside.


US President Trump is said to still be weeks away from nominating anyone for the Fed, according to a White House official. (Newswires)


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