Forex news from the European morning session - 16 July 2019
Headlines:
- China premier Li says that downwards pressure on the economy has increased
- Cable triggers stops in move to fresh 2019 lows
- Germany July ZEW survey current situation -1.1 vs 5.0 expected
- Eurozone May trade balance €20.2 billion vs €17.8 billion prior
- If something can't rally on good news...
- UK May average weekly earnings +3.4% vs +3.1% 3m/y expected
- Where do we stand now on the Brexit equation?
- China says that it is misleading to suggest that it needs a trade deal with the US
- ECB's Villeroy says that monetary policy cannot perform miracles
- ICYMI - US, China may have another trade call this week
Markets:
- NZD leads, GBP lags on the day
- European equities a little higher; E-minis flat
- US 10-year yields up 0.5 bps to 2.094%
- Gold flat at $1,414.60
- WTI down 0.1% to $59.53
- Bitcoin down 0.5% to $10,768
The pound is the major talking point in markets today amid subdued conditions elsewhere across other asset classes. The currency felt to its lowest level since April 2017 against the dollar as sentiment continued to sour with market participants getting a bit nervy about the prospects of a no-deal Brexit.
The latest development in the saga saw Johnson and Hunt both declaring the Irish backstop "dead" and saying that they would exclude them in future negotiations with the EU, prompting worries that things will turn for the worse if they pursue that path.
Cable fell from 1.2510 at the start of the session to 1.2460 before the move lower was stalled only by a more solid labour market report release. But if something can't really on good news, well we all know that story don't we? Cable then extended its drop to a low of 1.2408 before settling near 1.2430 currently.
At the same time, EUR/GBP posted fresh six-month highs as price looks to secure a break above 0.9000. That said, the euro itself isn't faring too well with slight weakness in the single currency seeing EUR/USD fall from 1.1250 to a low of 1.1218 on the session.
The dollar held firm for the most part as it gained against the likes of the swissie, aussie and yen while also paring earlier losses against the kiwi. NZD/USD fell from 0.6735 to 0.6719 before settling around 0.6720-25 currently.
Markets elsewhere remained more subdued with summer time trading starting to kick in. E-minis held flat throughout the session and there wasn't much movement in European equities or Treasuries either so far on the day.
Looking ahead, we'll have US retail sales data and industrial production data to contend with so let's see if that will add some spice into markets today.
