Tuesday12th May: European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei fell 0.40 %, Shanghai composite gained 0.65 %, Hang Seng declined 0.35 %, ASX rose 0.75 %
  • Commodities: Gold at $1183 (unch), Silver at $16.25 (-0.45 %), WTI Oil at $59.25 (unch), Brent Oil at $65.56 (-0.10 %)
  • Rates: US 10 year yield at 2.282, UK 10 year yield at 1.96, German 10 year yield at 0.61

News & Data:

  • Australia Home Loans 1.6 %, Expected: 1.0 %, Previous: 1.1 %
  • UK BRC Retail Sales -2.4 %, Previous: 3.2 %
  • Japan Leading Index 105.5, Expected: 105.5, Previous: 104.8
  • Japan Coincident Indicator -1.2 %, Previous: -2.8 %
  • Fitch: Australia’s AAA Rating Not At Risk — SMH
  • UK PM Cameron May Bring EU Referendum Forward To 2016 — Guardian
  • Moody’s: Currency Shifts To Widen Gap Between Global Economies
  • Australian Treasurer Hockey: Budget To Beat Market Deficit Forecast Of AUD 40-41 Billion

Markets Update:

The US Dollar weakened against most currencies overnight and USD sentiment remains mixed after the latest employment data. While the NFP figure came in line with expectations, there was a downward revision for the March number and wage growth remains rather slow. Meanwhile, the Pound continues to strengthen after the election risk are gone and the market is looking forward to the Bank of England inflation report tomorrow. Judging by price action, traders are betting on a slightly more hawkish report from the BoE. Before we get the IR however, there is Manufacturing & Industrial Production data today and the latest employment figures tomorrow at 09:30 UK time.

EUR/USD is moving higher ahead of the London open, reaching an intraday high of 1.1188 so far. Offers reported in front of the 1.12 level, but unlikely to be a major obstacle. A clear break above the big figure paves the way for a 1.1280 test. USD/JPY remains quiet and the pair was caught within a 30 pips range in the APAC session. While it is staying relatively bid, decent offers reported in front of 120.50 and 120.80, which might slow it down a bit.

Upcoming Events:

  • 08:30 BST – Swedish CPI
  • 09:30 BST – UK Industrial Production
  • 09:30 BST – UK Manufacturing Production
  • 15:00 BST – UK NIESR GDP Estimate
  • 15:00 BST – US JOLTs Job Openings
  • 17:45 BST – FOMC Member Williams speaks
  • 19:00 BST – US Federal Budget Balance
  • 22:05 BST – RBNZ Governor Wheeler speaks

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