RANsquawk EU Open Rundown 21.07.17
21 Jul 2017, 06:59
RBA speakers temper AUD appreciationAsian bourses somewhat directionless to close the weekLooking ahead, highlights include Canadian CPIASIAAsia equity markets traded marginally in the red, following the lacklustre close on Wall St. amid a slew of earnings releases which were ultimately mixed. ASX 200 (-0.8%) underperformed, led by the soft resources, metals and energy sectors, whilst Nikkei 225 (-0.3%) also traded in the red to conform to the tone in the region, as JPY’s indecision during the session offered no direction for the currency. Elsewhere, Shanghai Comp. (-0.1%) and Hang Seng (-0.1%) both traded subdued, with the PBoC’s increased open market operations of CNY 140bln failing to lift the Chinese bourses.Finally, 10yr JGBs trade marginally higher amid the cautiousness in the region, with the curve steepening as the super-long end underperforms. Participants also await the auction for 10yr, 20yr and 30yr government paper.PBoC injected CNY 100bln via 7-day reverse repos and CNY 40bln in 14-day reverse reposPBoC set CNY mid-point at 6.7415 (Prev. 6.7464)EUROPE/UKNews flow remained light FXFX markets have been muted so far, as the ECB and BoJ-driven moves faded. Comments from New Zealand Finance Minister Joyce stating that New Zealand firms are coping well with current NZD levels boosted the currency to push AUD/NZD below 1.0700, while NZD/USD found support at 0.7400. Elsewhere, a firmer fix by the PBoC is unable to offer much of a boost for CNH, as USDCNH traded flat for the session.RBA Deputy Governor Debelle stated no automatic reason to conform to recent hikes abroad.New Zealand Finance Minister Joyce stated NZ firms are coping well with NZD at current levels, added NZD reflects strong NZ economy.COMMODITIESThe commodities complex remained flat during Asia hours as news flows remained quiet tspanoughout the session, with gold (Unch.), copper and WTI crude futures all remaining unchanged.USUS Treasuries were relatively flat, initially trading higher amid more Trump fears after reports that special investigator Mueller was investigating Trump’s business practices. Prices were hugging higher levels into the 10y TIPS auction. The line was poorly received with a 6bps tail and cover ratio of just 1.98x, the lowest for 10y TIPS auction since July 2008. Sep’17 10y T-note futures settled at 126.02, up half a tick.