FX markets have been choppy although they have been generally in consolidative mode while awaiting the start of the G20 summit in Osaka, later on today, where the main focus will be on the meeting between Presidents Trump and Xi. Hopes are high for some form of agreement to stop further escalation the in trade war, and the South China Morning Post is reporting that a “truce” will be announced but there will be no major breakthrough in the negotiations. Ahead of that, expect the markets to engage in some position squaring ahead of the end of the end of Q2, H1 2019.
The major moves in the currency markets were in the Jpy, which saw US$Jpy shoot above 108 in early Europe before spending the rest of the day in slow decline, back to where it had started, while Cable had a similar move, in breaking above 1.27 but unable to stay there, and is now back in familiar territory, near 1.2650. The commodity currencies remain well bid despite the possibility of no breakthrough in the trade negotiations, with the Aud$ now back above 0.7. The Euro is unchanged.
In other markets, stocks were mixed and the metals and WTI both slightly higher, but the main interest was in Bitcoin which, having climbed sharply on Wednesday to an 18 month high of 13880, has now lost 25% of that rally to currently sit at 10600!!
Friday will be all about any headlines coming from the G20, which will then stretch into the weekend. Ahead of that the main points of interest will be in the EU Preliminary June CPI (CPI, exp 1.0%yy; Core, exp 1.2%yy) and the US Personal Income (exp +0.3%mm)/Expenditure (exp 0.4%mm) for May. Have a good weekend.
Economic data highlights will include:
Fri: G20, Australian Private Sector Credit, Japan Tokyo CPI, Housing Starts, Construction Orders, German Import/Export Index, EU CPI, US Preliminary GDP, US Personal Consumption/Expenditure, Speeches ECB’s Lautenschlager , Fed’s Daly.
Market moves, in brief:
FX: DXY 96.21 (+0.04%)
Bonds: US10Y; 2.014% (-1.77%), German 10Y; -0.319% (-5.15%), UK 10Y; 0.826% (-0.23%), Australian 10Y; 1.359% (+5.23%), NZ 10Y; 1.598% (+3.06 %), China 10Y; 3.235% (-0.47%)
Stock Indices: DJI; -0.04%, S+P; +0.38%, NASDAQ; +0.73%, EUStoxx50; -0.02%, FTSE100; -0.19%, Shanghai Composite; +0.69%,
Metals: Gold $1408 oz (-0.04%), Silver $15.23 oz (-0.10%), Copper $2.7125 lb (-0.04%), Iron Ore $111.50 per tonne (NYMEX) (+1.35%),
Oil: WTI $ 59.31 pb (+0.14%)
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