EU MID-SESSION UPDATE: SNB tweaks view on CHF. Next up the BoE; will we see any further dissent on the MPC?
European equities (Eurostoxx 50 -0.3%) have largely followed on from the mildly negative tone seen during Asia-Pacific trade as markets eye upcoming key risk events including the BoE rate decision and US inflation report. In terms of a sector breakdown, material names are the notable laggards amid downbeat industrial production and retail sales figures from China overnight, while energy names have been supported from the recent gains in WTI and Brent. Elsewhere, UK retail names have been dealt a helping hand after Next (+10%) upgraded their guidance, which has also provided support to some of their domestic competitors including Marks & Spencer (+4.5%).
From a fixed income perspective, paper has traded in a particularly tight range throughout the session after yesterday’s digestion of supply with just Ireland stepping up to the plate today. Note, tomorrow sees notable redemptions which some have suggested could guide price action later in the session (EUR 15.5bln IT principals, EUR 13bln GE, EUR 6bln FI, EUR 8bln AT, EUR 6bln EFSF, EUR 2bln coupons).
In FX markets, as has been in the case in other markets, price action has been on the light side ahead of key risk events. A bulk of the focus in the FX space thus far has been on CHF after the SNB kept rates unchanged as expected while tweaking their rhetoric on the CHF from ‘significantly overvalued’ to ‘highly valued’, however, the SNB also stated that they will remain active in the FX markets, subsequently leading to some choppy price action in the safe-haven. Elsewhere, NZD took a tumble in early trade after the latest News1 poll for the upcoming election put the Labour party in the lead; a result which was at odds with the NewsHub poll from earlier in the week. Finally, focus for FX markets will likely centre around GBP with markets looking to see whether or not the 2.9% Y/Y inflation rate in the UK will lead to any further dissents on the MPC.
In energy markets, WTI crude futures continue to hold onto yesterday’s gains after the Nigerian energy minister stated that the nation would be willing to impose an output cap for six months if they were able to hit production levels of 1.8mln bpd. Elsewhere, gold has seen little in the way of price action while copper prices were sideways overnight amid a subdued risk tone which somewhat provided the metals complex mild respite from the prior day’s selling.
14 Sep 2017 - 09:42- Important- Source: RANsquawk
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