Forex news from the European morning session - 14 June 2019
Headlines:
- For how much longer can the ECB continue to ignore this chart?
- IEA says that global oil supplies will increase far more than demand next year
- China May retail sales +8.6% vs +8.1% y/y expected
- China May industrial production +5.0% vs +5.4% y/y expected
- Gold surges to its highest levels since April 2018
- China president Xi: China will maintain ties with Iran no matter how the situation changes
- Japan April final industrial production +0.6% vs +0.6% m/m prelim
Markets:
- JPY leads, NZD lags on the day
- European equities lower; E-minis down 0.3%
- US 10-year yields down 2.8 bps to 2.067%
- Gold up 0.9% to $1,354.01
- WTI down 0.3% to $52.12
- Bitcoin up 0.4% to $8,291
Markets were generally quiet during the session but there is a hint of a softer risk mood with equities holding lower alongside Treasury yields, while gold surged to its highest levels since April 2018 in early trades.
There wasn't much fresh headlines driving the moves apart from global trade and Middle East tensions but softer Chinese data earlier didn't really help whereby industrial activity in May showed the slowest annual growth pace since February 2002.
Gold made a quick surge to rise above $1,350 and is holding above there as risk sentiment remains softer ahead of key US data later today. Meanwhile, the yen leads the currencies space with USD/JPY lower at around 108.20 currently.
The dollar is mostly firmer as it gained some ground as traders wait on US retail sales data. EUR/USD moved lower from 1.1270-80 to a low of 1.1252 before trading around 1.1260 levels currently. The pound remains pressured for the most part as the Tory leadership race heats up, with cable slipping from 1.2670 to lows of 1.2627 during the session.
The aussie and kiwi remain softer with the latter in particular being beaten down since Asia Pacific trading due to a weaker manufacturing PMI reading. NZD/USD hovered around 0.6530-50 levels during the session but is closer to the lows at the moment.
Looking ahead, markets will be keenly watching the release of the US retail sales data for May later; hoping for clues about the US economy in general as well as the Fed rate outlook. As mentioned earlier, the worst thing for traders is that the data offers little of anything new and that means we may just sit in limbo until the FOMC meeting next week.
