Article / 31 May 2016 at 11:31 GMT

Mid-session Europe: Bonds and equities soggy as FX treads water

Saxo Markets


Foreign exchange

Markets opened on Tuesday with the prospect of a US interest rate rise getting ever closer. Bonds fell, equities fell and oil continued its longest run of monthly gains in 5 years.
Gold was higher by $0.5 after sliding 6% over the last couple of weeks, also driven by the idea of higher US rates.
FX was relatively subdued with the dollar index unchanged on the day and JPY flat around 111.05


  • Canada quarterly GDP annualised (12:30)
  • US Chicago purchasing manager index May (14:45) 
  • US consumer confidence (14:00)


FX Options volatilities
EURUSD: Vols are trading a touch lower; most interesting is the Thursday European Central Bank event which has been marked down today. Friday NFP event still attractive.
USDJPY: RR trading closer to par, but still favouring USD puts.
GBPUSD: Forward vol for the Brexit event is still coming off. The o/n from 23 to 24 July down from 80 vols last week to 72 vols today.

Fixed income


Small drops across European fixed income markets in both corporate and government bond markets. Bunds future currently at session lows with a 0.18% 10-year yield while XOVER credit spreads are a few bps wider on the day. CPI numbers were in line and failed to move the market, so the next catalyst will likely be the European Central Bank meeting and the US job numbers towards the end of the week.


European markets are lower this morning with Euro STOXX 600 down 0.25% on light volume. ECB and Opec meetings on Thursday and nonfarm payrolls on Friday, will be on the minds of investors. Energy names are underperforming today whilst the Technology sector is marginally outperforming.
Volkswagen’s first quarter earnings missed estimates, sending the stock 3% lower as the emissions scandal hits profits.
IG Group is up this morning after reporting solid numbers and forecasting its full year earnings being slightly ahead of market expectations.

Join our Weekly OptionsLab on Wednesday  to find out more on covered call strategy.

Read more

Mid-session Europe is part of TradingFloor's stable of commentary running through from the US close, through Asia to the European session. Click below to keep abreast of all the developments as they happen.

US:        US Market Wrap: FX majors drift sideways on US holiday

Europe: Morning Markets:  Stocks healthy ahead of US data

 Markets looked promising before the opening bell but soon turned soggy. Pic: iStock

— Edited by Clare MacCarthy

The Global sales Trading desk is a multi-asset team providing customised trading solutions


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail