DAILY US OPENING NEWS: European equities enter the North America crossover amid yesterday’s terror incident and further turmoil in Washington

 

ASIA-PACIFIC

All major Asia-Pac indices traded in negative territory as the risk averse tone triggered by terror incidents in Spain and resignation rumours related to Trump’s chief economic advisor Cohn, rolled over to the region. ASX 200 (-0.56%) dampened from the open with the largest weighted financials sector leading the declines as all big 4 banks traded with firm losses, while Nikkei 225 (-1.18%) exporters felt the brunt of the safe-haven flows into JPY. Hang Seng (-1.08%) and Shanghai Comp. (+0.01%) also mirrored the global risk averse tone, although downside was stemmed in the mainland after the PBoC switched to net weekly injection in its operations vs. last week’s drain and as participants mulled over the latest property price data which suggested the effectiveness of curbs to cool the over rampant sector. 10yr JGBs were marginally higher with mild support seen amid the negative backdrop in global equities, while the BoJ were also in the market for JPY 1.05tln of JGBs with maturities of up to 10yrs.

Chinese House Prices YY (Jul) 9.7% (Prev. 10.2%). (Newswires)

Chinese House prices increased M/M in 56 out of 70 cities (Prev. 60) and increased Y/Y in 70 out of 70 cities (Prev. 70).

PBoC injected CNY 70bln via 7-day reverse repos and CNY 50bln in 14-day reverse repos, for a net weekly injection of CNY 110bln vs. last week's CNY 30bln net drain. (Newswires)

PBoC set CNY mid-point at 6.6744 (Prev. 6.6709)

EQUITIES

Sentiment soured in Europe with the Eurostoxx falling over 1%, sector wise the losses are broad based with travel stocks among the worst performers following yesterday’s terror attacks in Barcelona. Financials also taking a hit this morning after reports that banks are being sued by the FDIC over the Libor-rigging scandal.

FIXED INCOME

Flight to quality flow keeping EGBs afloat, the German curve is slightly bull flattening while the 10Y yield is approaching 0.4%. Peripheral debt spreads wider with the Italian 10Y yield edging higher.

FX

JPY firmer across the board amid the fall seen across equity markets and as such USD/JPY is eying 109.00 to the downside, while support in the short term is situated at 108.70-80.

USD softer against its major counterparts, EUR and GBP higher by 0.25% with the later making a move to breach 1.29. However, the backdrop of Brexit continues to weigh on GBP/USD and curb the upside.

CAD: Today will see the release of the Canadian CPI figures where expectations are for a slight pick-up in inflation. Although, a miss on this could see USD/CAD make a push through 1.27.

COMMODITIES

Safe-haven commodities supported with gold prices moving to intra-day highs. Elsewhere, the softer USD also sees crude prices ticking up as Brent crude breaches USD 51. Another day of gains for base metals, Zinc rising near 2%.

 

18 Aug 2017 - 10:44- ForexData- Source: RANsquawk

Subscribe Now to RANsquawk

Click here for a 1 week free trial

RANsquawk provides audio news and commentary for over 15,000professional traders and brokers worldwide. Services include: