Batten down the hatches

10 June, 2016

Batten down the hatches

The single currency was feeling the pain yesterday on the back of comments from ECB President Draghi, who was again underlining the ability of the ECB to enact further policy measures if needed. In the wider picture, it was last year that I set-up my German 10 year yield below zero alert on my terminal. It’s not that far from being triggered, the yield moving below 0.03% yesterday and trading below that level this morning. This is indicative of a wider risk-aversion move, helped by the expectation of no near-term easing from the Fed and also the wider concerns on the EU referendum vote in the UK later this month. The UK 10 year has fallen by around 20bp so far this month, making another cycle low just above the 1.20% level. We’re getting a similar story from stocks and also gold, the latter having rallied by more than 5% so far this month. Stocks in Asia are trading to the downside, with a cautious start also being seen in Europe.

For today, we’re seeing some dollar weakness emerge in the early part of the European session, with cable reversing towards the 1.4410 area, whilst USDJPY has reverted back below the 107.00 level. The data calendar is on the light side, with jobs data in Canada the main standout, together with Michigan confidence data in the US later on. USDCAD has been forming a base since mid-week, so jobs data going to be pretty key in determining if this can be built upon or if fresh push towards 1.25 level is more likely. Overall, the outlook looks more consolidative vs. the moves we’ve seen through most of the year.


Source link  
German & New Zealand Elections

The results of the German Election have re-elected Chancellor Angela Merkel for a fourth term. Her CDU party won fewer votes than was expected and Chancellor Merkel...

Fed Holds Rates for Now But...

Unsurprisingly, the Federal Reserve kept rates on hold following the end of its 2-day meeting on Wednesday. They did, however, indicate that...

UK Unemployment at 42 Year Low

UK unemployment fell to its lowest level since 1975, data on Wednesday revealed. Unemployment fell by 75K, bringing the unemployment...


US Equities at Record Levels

US equities closed at record levels on Wednesday, as improved risk-on sentiment returned to the markets and news that the US economy...

USD Stabilizes

Hurricane Irma has, reportedly, inflicted less damage on the US mainland than was originally predicted, thereby reducing the economic impact of the devastation it was expected to...

Markets on Edge

With the markets risk appetite dampened after North Korea’s most powerful nuclear test to date, USD and Global equities fell whilst Gold, Yen and Sovereign Bonds all rose....


Risk Appetite Returns

North Korea official news agency reported on Monday that leader Kim Jong Un will watch the actions of the United States for a while longer before making a decision to fire missiles at Guam...

US-Korean Tensions Rattle Markets

Markets were cautious on Wednesday, as safe-haven assets pushed higher after tensions grew between the US and North Korea. Markets are concerned...

Global Manufacturing Grows

Recent data releases have shown that global manufacturing saw an increase in July, further confirming global economic momentum has carried into H2...

  


Share: