Morning Report APAC: Asia lower ahead of China data; GBP hit by poll
- NZD is the best-performing G10 currency yesterday, and for the month of May
- GBP tumbles after a UK poll puts the Conservatives at risk of losing their majority
- Oil and gold both trade lower
- Oil-related currencies underperform their G10 peers
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time)
0910 – NZ – RBNZ's Graeme Wheeler at Parliament Select Committee
1520 – EC – European Central Bank’s Benoit Coeuré speaks in Frankfurt
1630 – IT – Governor Ignazio Visco speaks at Bank of Italy holds annual meeting
2000 – US – Federal Reserve’s Robert Kaplan speaks in New York
2030 – EC – ECB’s Sabine Lautenschläger speaks in Berlin
US: Core PCE data came in line with expectations at 1.5% for the y/y with m/m number up 0.2%, slightly higher than the 0.1% expectation.
President Donald Trump tweeted, “We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. This will change.”
The US Federal Reserve’s Lael Brainard says the neutral rate for the economy is very low and may not move higher quickly. Brainard also said the time for a change to the balance sheet is coming soon.
US Commerce Secretary Wilbur Ross says he is open to resuming talks on a mega-trade deal with Europe. This must be conducted at an EU level and not with individual countries, according to Ross.
Europe: German CPI data missed expectations of 1.5%, printing 1.4%.
French GDP beat expectations, printing 1.0% y/y versus 0.8% expected. Consumer confidence data also beat expectations, however there was a decline in consumer spending of 0.5% y/y versus an expected increase of 0.6%.
Italian producer prices came in very strong, up from 3.4% last month to 4.4% this month.
UK: The latest YouGov poll by the Times showed that the Conservatives are set to lose their majority. Needing 326 seats for a majority and currently holding 330, the latest poll indicates that the Tories would only get 310 seats, leading to a hung parliament. The release of this saw GBP tumble 70 pips.
Foreign exchange movements
US stocks ended slightly lower, with activity relatively muted following the three-day weekend in observance of Memorial Day.
Amazon Inc. reached its $1,000 milestone, hitting an intraday high of $1,001.20, highlighting the growth of the technology behemoth run by CEO Jeff Bezos.
US-listed Ryanair Holdings rose 1.4% after sentiments for Europe’s largest carrier were boosted by passenger numbers that gave profit figures that were largely in line, and a stock buyback announcement.
European stocks dropped almost across the board, with banks leading the way lower and fears over a potential early election in Italy and the Greek bailout program.
The Stoxx Europe 600 Banks Index fell 1%, the worst performing group, after Deutsche Bank lowered banks to underweight from a benchmark rating, saying a slowdown in Eurozone growth is likely to weigh on the sector in coming months.
- IAG ended down 1.4%, but the stock managed to finish off its session lows after hundreds of BA flights were grounded due to a far-reaching failure of the carrier’s computer network.
– Edited by Susan McDonald
This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter
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