Headlines:
- Risk tones stay more cautious in European morning trade
- ECB's Vujčić: Core inflation pressures remain in the euro area
- Germany May PPI -1.4% vs -0.7% m/m expected
- Eurozone April current account balance €4.0 billion vs €31.2 billion prior
- HSBC slashes China 2023 GDP forecast to 5.3% from 6.3% previously
- Citi cuts its China GDP forecast for 2023 to 5.5%, from 6.1%
- ForexLive Asia-Pacific FX news wrap: The PBOC cut rates, as expected
Markets:
- JPY leads, AUD lags on the day
- European equities mostly lower; S&P 500 futures down 0.4%
- US 10-year yields down 0.4 bps to 3.765%
- Gold flat at $1,950.43
- WTI crude flat at $71.75
- Bitcoin up 0.3% to $26,795
It looks like European traders are waiting on Wall Street before firming up any market moves but it was a session where risk tones remained on the defensive.
China's rate cuts were greeted with disappointment in Europe, as equities are looking fairly sluggish and kept that way throughout the session. That is pinning the antipodeans lower, with the aussie leading losses in the major currencies space.
AUD/USD was already down to 0.6800 in Asia before extending that drop to 0.6785 - now down 0.9% on the day. The aussie's plight is not helped by the softer risk mood, a weaker yuan, and some mixed language in the RBA minutes earlier.
The US dollar traded more mixed, keeping relatively steady against the euro while holding a light advance against the pound. But the yen is recovering from last week's plunge a little, with USD/JPY falling today from 142.00 to 141.40 as Treasury yields also retreat after an early advance.
That might be a sign that we are seeing some risk aversion and perhaps some rotation from stocks to bonds ahead of month-end and quarter-end.