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RANsquawk EU Open Rundown 23.03.17

  • Asian equities traded higher in line with their US counterparts, with newsflow overnight relatively light
  • USD has held on to yesterday’s rebound, while NZD sspanugged off the latest RBNZ rate decision which shed little new information.
  • Highlights include UK Retail Sales, US weekly jobless data and a host of speakers including BoE’s Broadbent, ECB’s Lautenschlager and Fed’s Yellen, Kashkari and Kaplan

ASIA

Asian equities traded mostly higher after the positive Wall St. close where tech names outperformed and US markets found reprieve from Tuesday’s worst performance YTD. ASX 200 (+0.4%) was underpinned by strength in the utilities and energy sectors, while Nikkei 225 (+0.2%) was kept afloat as USD/JPY recouped losses. Elsewhere, earnings were in focus in China with financials supported after Ping An Insurance reported its FY net rose by 15% Y/Y. However, the Hang Seng (+0.1%) and Shanghai Comp. (-0.4%) pared gains amid weakness in telecoms and after a lacklustre liquidity operation by the PBoC. Finally, 10yr JGBs edged marginally higher despite the recovery of sentiment in Japan, with prices supported amid the BoJ presence in the market under its bond buying programme.

PBoC injected CNY 10bln in 7-day reverse repos, CNY 10bln in 14-day reverse repos and CNY 10bln in 28-day reverse repos.

PBoC set CNY mid-point at 6.8856 (Prev. 6.8889). (Newswires)

EUROPE

Harris French election poll showed Macron with 26% and Le Pen at 25% for the 1st round and Macron at 65% vs. Le Pen at 35% for the 2nd round. (Newswires)

German Finance Ministry stated that economic data points to a continued economic upswing. (Newswires)

Italy plan to raise its 2017 GDP growth forecast, according to sources close to the matter. (Newswires)

UK

YouGov/CEBR UK Consumer Confidence (Mar) M/M 109.3 (Prev. 109.6). (Newswires)

UK Feb car manufacturing rose 8% Y/Y to 153,000 units, according to SMMT. (Newswires)

UK PM May stated UK terrorism tspaneat level will remain unchanged after the attack. (Newswires)

FX

A lack of data and key speakers kept FX price action uneventful, which saw the USD-index hold on to yesterday’s rebound and approach closer to the 100.00 level, while USD/JPY also nursed losses after briefly slumping below the 111.00 handle. NZD/USD traded indecisive following the RBNZ policy meeting in which they kept rates unchanged as unanimously expected. The central bank also commented that further depreciation of the currency is needed, but was optimistic on the domestic outlook which resulted in OIS pricing increased odds for a sooner hike, with a February 2018 move priced at 49% vs. Prev. 45%. (Newswires)

RBNZ Interest Rate Decision 1.75% vs. Exp. 1.75% (Prev. 1.75%)

RBNZ stated that further depreciation of NZD is needed and that the domestic outlook remains positive. (Newswires)

COMMODITIES

Oil prices rebounded overnight after WTI crude futures found support at the USD 47/bbl level to rise above USD 48/bbl. Elsewhere, gold (-0.2%) prices slightly pulled back with the precious metal weighed by a firmer greenback, while an improvement in risk sentiment also underpinned copper prices.

Sources report that Iran are to step up their support for Houthis in the Yemen War. (Newswires) In the past, the two year war has been a proxy for tensions between Iran and Saudi Arabia.

Barclays state iron ore will fall in Q2 as demand eases and note the downward correction risk in copper, with Chinese steel profitability a key metric to keep an eye on.

US

US Treasuries posted modest gains with volumes picking up compared to recent trading sessions. Informa noted that the long-end outperformed slightly amid good two-way real money flows. June 2017 10y T-notes settled at 124.17, up 8 ticks and head into European trade at 124.14.

US Freedom Caucas Chairman Meadows stated that President Trump called him during caucus meeting to discuss possible changes to the Obamacare replacement bill. Meadows added that a deal is not yet done, but they're working with House & Senate Republicans to secure an agreement that will pass both chambers. A Freedom Caucus source then later commented that the odds of the American Health Care Act passing have improved after GOP leaders offered to drop essential health benefits. (Newswires)

FBI is said to have information that associates of US President Trump communicated with Russian personnel during elections and may have exposed information that was damaging to Clinton's campaign. (CNN)

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