European Morning Briefing 13.06

European Morning Briefing 13.06

• Asian equities managed to avoid further losses despite a continuation of tech-related selling pressure seen on Wall Street

• In FX, USD/JPY nursed yesterday’s losses to test 110.00 to the upside, while EUR/USD languished after relinquishing the 1.1200 handle

• Looking ahead, highlights include UK CPI, German ZEW, US PPI and API Inventories

ASIA

Asia shrugged off the negative lead from US where the tech sector once again underperformed and posted its worst 2-day period YTD. Nonetheless, the tone in Asia improved throughout the session with ASX 200 (+1.2%) underpinned by financials after gains in the big 4 banks, while Nikkei 225 (Unch.) recovered from early losses alongside a rebound in USD/JPY. Elsewhere, Shanghai Comp. (+0.4%) was indecisive with early weakness observed alongside speculation the PBoC may raise rates in response to a US Fed hike and after another lacklustre liquidity operation, although Chinese stocks then recovered to conform to the overall improvement of risk sentiment in the region.

PBoC injected CNY 10bln in 7-day reverse repos and CNY 40bln in 28-day reverse repos. (Newswires)
PBoC set CNY mid-point at 6.7954 (Prev. 6.7948)

EUROPE/UK

There were press reports that the Conservative Party and Labour Party held secret talks on a soft Brexit. (Telegraph)

UK lawmaker said that PM May has recognised that a broader consensus is needed for Brexit. (Newswires)

EU said no agreement reached with UK on start of Brexit negotiations. (Newswires)

FX

In FX markets, commodity linked currencies outperformed with AUD supported as AUD/JPY reclaimed the 83.00 level, while USD/CAD slipped below 1.3300 after hawkish comments from BoC’s Wilkins who stated the BoC is to assess if less stimulus is needed as growth continues. Elsewhere, USD/JPY nursed yesterday’s losses to test 110.00 to the upside, while EUR/USD languished after relinquishing the 1.1200 handle.

BoC’s Wilkins said the BoC is to assess if less stimulus is needed as growth continues and commented that Q1 growth figures are “pretty impressive”.
(Newswires)

COMMODITIES

The commodities complex saw quiet trade overnight, although WTI crude futures were marginally higher as support held at USD 46/bbl. Elsewhere, Gold (Unch.) prices held near yesterday’s lows amid a lack of drivers and copper was also rangebound amid an indecisive risk tone in its top consumer China.

US

US Republican Senator John Cornyn stated that a vote on the Obamacare replacement in Senate is unlikely the month. (Newswires)

 

 

(tfx)

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