MNI China Daily Summary: Tuesday, July 9

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Relief for Gas Futures Underpins Brighter Risk Backdrop

FOREX
  • Antipodean currencies outperform in early Tuesday trade, with AUD and NZD among the strongest FX in G10. Commodity- and growth-tied currencies are re-coupling with equities, which also sit stronger ahead of the NY crossover. The somewhat more buoyant risk backdrop stems from the EU's pledge to get energy costs under control on the continent, with an EU ministers meeting slated for September 9th.
  • Measures are speculated to include a market infrastructure overhaul, and potentially measures including price caps for energy. The pledges have knocked benchmark European gas futures lower by ~10%, helping relieve some of the recent market stress.
  • CHF and USD are among the poorest performers on the day, with EUR/CHF printing a higher high for a sixth consecutive session and putting the cross on track to test the 0.9819 50-dma.
  • USD/JPY has been unable to maintain the strength seen across the Monday session, with yesterday's Y139.00 still in tact. This represents a key upside level going forward, and a break above here would open July's Y139.39 and beyond.
  • Looking ahead, focus turns to the national German inflation print, with the regional releases so far supporting the consensus view of an uptick for the Y/Y release, and a slowing in the M/M figure. The central bank speakers slate will likely take more focus, with ECB's Vasle, Holzmann, Stournaras, Wunsch and Muller all set to appear. Fed's Barkin and Williams are also on the docket.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Energy BulletsCommodities
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Energy BulletsCommodities

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