European Session June 23
- Trading Tip: Don't add to losing trades
- Trading tip: If in doubt, don't
- US MBA mortgage applications w.e. 18 June 2.1% vs 4.2% prior
- German Foreign Minister Mass On Iranian nuclear talks
- Gold ETF's fairly firm despite Fed's dot plot shift
- Bitcoin put in a classic technical reversal yesterday
- ECB's VP De Guindos on banks dividend cap
- Eurozone June flash services PMI 58.0 vs 58.0 expected
- Germany June flash manufacturing PMI 64.9 vs 63.0 expected
- France June flash services PMI 57.4 vs 59.5 expected
- Delta variant a problem for low vaccinated countries
- Oil at $100?
- USD strong as European trading gets underway
- Risk is constructive, but FX space mixed
- Are these markets the 'biggest U.S fantasy trip ever'?
- Some used vehicles in the US now costing more than new ones
- USD unlikely to fall too far this week due to PCE data on Friday
Other markets
- FTSE +0.30%
- Euro Stoxx -0.72%
- Italian FTSE -0.66%
- Dax -0.67%
- Gold+0.27%
- BTC +4.42%
Oil remains supported on a variety of different factors and calls are growing for higher oil prices. It remains a buy on the dips. There are rumours circulating that a deal is getting closer between Iran and the US, but no confirmation yet. However, even though a deal should send oil lower in the immediacy, this dip should find buyers as the fundamental outlook is strong.
The USD started the session strong and any dips lower in the USD can find buyers ahead of the strong PCE deflator data expected on Friday.
The flurry of European PMI's were broadly encouraging. France's PMI were a miss, but Germany's came in strong with manufacturing at 64.9 vs 63.0 expected and services stronger too at 58.1 vs 55.7. IHS made some encouraging noises saying. 'Overall inflows of new business showed the steepest rise since January 2011. Although manufacturing continued to lead the way on the order book front, helped by a sustained strong upturn in goods export sales, the improvement in growth in June was mainly driven by the service sector'
TheEuropean readings were higher than expected as you would anticipate from strong German readings. This gave some immediate EURUSD upside but unlikely to last as the ECB still sound pretty dovish compared to the Fed.
UK PMI's came in below last month's readings and IHS said, '"There are some signs that the rate of expansion appears to have peaked, as both output and new order growth cooled slightly from May's record performances, but full order books and a further loosening of virus-fighting restrictions should nevertheless help ensure growth remains strong as we head through the summer.However, inflation worries have continued to intensify'. GBP unfazed as all eyes on the BoE tomorrow and I have been shorting the EURGBP from last week convinced of a hawkish tilt from the BoE tomorrow. See here.
Aside from that markets were fairly quiet waiting for this afternoon's fed speakers. Base case remains interest rate hike in 2023 and bond tapering at some point between now and then, possibly as early as this summer. In terms of speakers for this afternoon look for any hawkish shifts from Bowman (Permanent member, neutral) or Rosengren (non-voter, neutral).
