EU MID-SESSION UPDATE: Summer lull continues, while EU bourses are led lower by financials

Equities: EU bourses trading with minor losses this morning with the Euro Stoxx 50 slipping 0.6%. All sectors trading in the red with financials the notable laggard this morning, BNP shares trading lower by 1.6% amid reports that Belgium could place more shares in the bank. Elsewhere, Fiat Chrysler shares are outperforming after Great Wall Motor announced that they are engaged with talks over a possible offer.

FX

USD: Calm start to the week given the quiet newsflow thus far, the greenback up marginally by 0.1% to remain within close proximity to  93.50. USD also unfazed by North Korean anger at South Korean and US forces beginning military exercises.

EUR slightly offered this morning ahead of the main risk event in which Draghi is set to speak at the Jackson Hole Symposium later this week, as such positioning for this could see EUR longs reduced. As a reminder, source reports last week indicated that Draghi was set to stick to his dovish stance, which could weigh on EUR/USD. Influence of today’s option expiries could grow with 720mln and 918mln set to roll off at 1.1700 and 1.1795-118.00.

JPY firmer across the board with equities taking a slight dip this morning, USD/JPY now tripping below 109.00 to hover around intra-day lows. More US political concerns with regards Trump’s administration could continue to send USD/JPY lower with a possible move towards the YTD low at 108.11.

Fixed Income: Investors paying a close eye on Greek bonds this morning with yields initially edging lower after Fitch became the second rating agency to upgrade it to single B status. Peripheral debt slightly outperforming with Portuguese 10Y spreads tightest within a month against the bund.

Commodities: Oil prices slightly softer this morning, however do remain at elevated levels following a fall in the Baker Hughes rig count on Friday. Focus will shift towards the joint OPEC-Non-OPEC technical committee which is set to convene today.

21 Aug 2017 - 09:53- - Source: Newswires

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