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RANsquawk EU Open Rundown 20.03.17

  • Quiet start to the week as Asian equities traded mixed amid a lack of key drivers while Japanese trade was closed for the Spring Equinox holiday.
  • FX markets saw the USD-index continue to pull back with the greenback now hovering around the 100 level.
  • Highlights include, Chicago Fed National Activity Index, Bundesbank Report and comments from Fed’s Evans.ASIA

    Asia equity markets traded mixed amid a lack of key drivers and with Japanese trade closed for the Spring Equinox public holiday, while ASX 200 (-0.5%) was led lower by telecoms and profit-taking in gold related stocks. China was positive with Hang Seng (+0.6%) the outperformer after a firm liquidity injection of CNY 100bln by the PBoC and as participants digested earnings releases, while Shanghai Comp. (-0.2%) lagged after Chinese property prices continued to surge with Bejing prices up over 20% Y/Y, which could essentially attract funds away from stocks. Elsewhere, US equity futures were pressured and broke below Friday’s lows, while Nikkei 225 remained shut due to the public holiday.

    Chinese Property Prices (Feb) Y/Y 11.8% (Prev. 12.2%). (Newswires)

    PBoC injected CNY 60bln in 7-day reverse repos, CNY 20bln in 14-day reverse repos and CNY 20bln in 28-day reverse repos.

    PBoC set CNY mid-point at 6.8998 (Prev. 6.8873). (Newswires)

    EUROPE

    Macron would beat Le Pen in French election run-off with 64% to 36%, according to an Odoxa poll. (Newswires)

    ECB's Visco (Dove) said that deflation risk seems to have passed and that the ECB could shorten the time gap between exit from QE and first rate hike. (Newswires)

    S&P affirmed Finland at AA+ with a stable outlook, affirmed Denmark at AAA with a stable outlook, affirmed Austria at AA+ with a stable outlook, affirmed Portugal at BB+ with a stable outlook and raised Cyprus's sovereign rating to BB+ from BB with outlook revised to stable from positive. (Newswires)

    UK

    UK Rightmove House Price Index (Feb) M/M 1.3% (Prev. 2.0%). (Newswires)

    UK Rightmove House Price Index (Feb) Y/Y 2.3% (Prev. 2.3%)

    UK trade officials said to consider proposing a traditional decade-long deal with EU under WTO clause, if a trade deal is not reached tspanough Brexit negotiations. (Newswires)

    FX

    In FX markets, USD remained weak with the USD-index languishing near the 100.00 level following the post-FOMC pullback in the greenback. This supported its major counterparts with EUR/USD and NZD/USD the notable beneficiaries, while AUD/USD edged back above the 0.7700 level and GBP/USD kept in proximity to retest the 1.2400 handle to the upside. Elsewhere, USD/JPY extended on last week’s declines with demand lacking amid the absence of Tokyo trade and CNY was marginally pressured after the PBoC weakened the reference rate.

    The G20 statement reiterated the group’s long-standing warnings against competitive devaluations and disorderly FX markets. However, G20 finance leaders caved into pressure from the US and scrapped a commitment to reject all forms of trade protectionism. (Newswires/AFR)

    SNB's Jordan stated SNB is attempting to limit the strength of its currency, not push it to artificially weak levels. (Newswires)

    S&P affirmed Russia at BB+, outlook revised to positive from stable. (Newswires)

    Moody's revised Turkey's sovereign credit outlook to negative from stable. (Newswires)

    COMMODITIES

    Commodities mimicked the indecisive trade seen across riskier assets due to a lack of drivers. Copper traded lower overnight, although losses were stemmed amid continued strength in Chinese house prices. Elsewhere, gold (+0.4%) printed fresh 2-week highs, while WTI crude futures fell following news of increased US drilling activity with US drillers adding 14 oil rigs last week.

    The labour at Chile’s Escondida mine has slammed new offer from management. (Newswires)

    Libya's NOC chairman says he expects to regain the Es Sider and Ras Lanuf oil ports, (Newswires)

    An international coalition of aluminium trade associations has called for a global forum to be created to tackle China’s growing output. (FT)

    Rio Tinto CEO stated high quality ore demand will be boosted by Chinese reforms. (Newswires)

    US

    US Treasuries firmed on Friday on lower than usual volumes with only a couple of data points for traders to get their teeth into. Although the University of Michigan sentiment looked good on the surface, consumer inflation expectations declined from the previous month which saw US yields moving to session lows. Finally, Jun’17 10y T-note futures settled at 124.12+, up 5 ticks.

    White House Secretary Spicer stated that the Trump administration may begin to revamp the tax code as soon as early spring. (Newswires)

    US President Trump tweeted that "Germany owes vast sums of money to NATO and the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!". (Twitter)

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