Brent oil has climbed slightly higher

Danske Research Team Danske Bank A/S

Market movers today

Today is a very quiet one in terms of data releases.
In the US, we are set to receive core capex goods orders for May. The new orders component has levelled off recent ly, in line with the general cooling of the manufacturing sector. We est imate a slight increase of 0.2% m/m in goods orders in May.
In the euro area, the German ifo expectation is due for release today. The ifo expectation increased from 105.2 in April to 106.5 in May, which is its highest level since February 2014. We expect this figure to decline to 106.1 in June, as the German ZEW and Sent ix have both declined in June, and the weakening business cycle indicators in the US and China could still weigh on the German business expectat ion.

Selected market news

On Friday in the euro area, PMI figures were due out . The euro area manufacturing PMI cont inued higher in June to 57.3 from 57.0 in May despite the weakness seen in the US and China. In our view, weaker global growth will cont inue to weigh on the euro area and we look for weaker headline manufacturing PMI in coming months. The service PMI came out weak at 54.7 in June from 56.3 in May, which is the lowest level since January 2017. The lower service PMI figure could reflect slower real wage growth, which has followed as inflat ion has picked up without nominal wage growth following suit . Looking ahead, we cont inue to expect this to be a headwind for consumers.

On Friday, we also got US PMI manufacturing and services for June. Manufacturing PMI fell unexpectedly to 52.1 in June (market consensus and our expectat ion was for a slight increase to 53) from 52.7 in May. Service PMI also came out lower than expected at 53 in June (consensus was at 53.5) from 53.6 in May.

It has been a calm session in global financial markets this morning. Asian stock markets have mainly been moving sideways, though slight ly in the green and in fixed income markets, changes in the US 10-year government benchmark bond yield have been subdued since Friday. Brent oil has climbed slightly higher to around USD46/bbl at the t ime of writing.

Download The Full Daily FX Market Commentary

Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.