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RANsquawk EU Open Rundown 19.07.17

  • Asian equities traded with marginal gains overnight in what was a fairly quiet session
  • Slight profit taking observed in EUR while USD/JPY consolidates above 112.00
  • Looking ahead, highlights include US Building Permits, Housing Starts and DoE Crude Report

ASIA

Asia traded mixed, following a similar Wall St. lead, where Goldman Sachs’ quarterly revenue weighed on the DJIA, while Netflix led the NASDAQ 100 into positive territory following its beat on earnings. ASX 200 (+0.6%) finished positive, with the financial sector providing the support, whilst Nikkei 225 (+0.1%) was choppy amid a lack of news flow and tier-1 data releases to provide a catalyst. Elsewhere, Shanghai Comp. (+0.9%) and Hang Seng (+0.5%) traded in an upbeat fashion, gaining influence from the CNY 140bln liquidity injection by the PBoC. Finally, 10yr JGBs were flat with some underperformance seen in the long end, while the JGB auction for enhanced liquidity auction added no direction for the market.

PBoC set CNY mid-point at 6.7451 (Prev. 6.7611)

PBoC injected CNY 100bln via 7-day reverse repos and CNY 40bln in 14-day reverse repos. (Newswires)

EUROPE

News flow remained light overnight

UK

BoE Governor Carney said yesterday's inflation figures were consistent with BoE's forecasts that inflation will overshoot target for some time. (Sky News)

FX

FX markets were quiet due to a lack of drivers to spur price actrion, with the greenback making a minor attempt to pare its recent losses, with USD/JPY hovering around the 112.00 handle. JPY-crosses remained near their lows during the session, and AUD/USD has seen mild, pulling upwards away from the 0.7900 handle.

S&P upgraded Mexico sovereign outlook to stable from negative. (Newswires)

COMMODITIES

WTI experienced choppy trade overnight following the unexpected 1.6mln bbl build in API crude inventories, with the prices trending close to post-announcement levels. Gold (-0.1%) prices also saw choppy movement, whilst gold trades near its highest level in two weeks on the back of the weaker greenback. Elsewhere, copper traded sideways amid a lack of market news and data releases to spur demand.

US API Crude Oil Inventory Report (Jul 14) W/W 1628K (Prev. -8133K).

US

Treasuries were unreactive to any news flow today, although were subject to two notable buying programmes in early US trade, and never really looked like selling off afterwards. This also allowed the JPY to appreciate further. US 10 year T-notes settled up 11+ ticks at 126.03+.

US President Trump has invited all Senators to lunch on Wednesday to hold talks on healthcare and other areas of concern. (Newswires)

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EU Mid-Session Update: Attack sees crude prices pop as Saudi crude output drops https://t.co/IAoChFglPp