Allan von Mehren
Danske Bank A/S
Market movers today
-
The development in Turkey will continue to drive financial markets today, see more below and Flash Comment - Turkey: Erdogan chooses the confrontation path - TRY collapses, 10 August 2018.
-
It will be quiet on the data front today with no big releases. Key global releases this week are US retail sales and Chinese data for industrial production, investments and retail sales. Later this week, Brexit will also be in focus again, as talks between the EU and the UK resume in Brussels. For more on upcoming releases see the market movers section in Weekly Focus .
-
In Sweden, housing price data is due today (see next page). The key event in the Scandies this week is the Norges Bank meeting on Thursday.
Selected market news
Stock markets and bond yields have continued to trend lower as the Turkish lira saw a savage opening in the Asian session last night. The USD/TRY crossed the 7.23 level before the TRY rebounded back to below 7.00 against the USD in a thin market. On Sunday, President Erdogan urged Turkish businesses to stay away from FX purchases and to support the TRY. The massive sell-off in the TRY started last Friday, when in his speech Erdogan spooked investors by choosing to continue his path of confrontation with the US and calling for Turks to hand in their US dollar, EUR and gold holdings. Shortly after, TRY's turmoil deepened on President Trump's tweet, which mentioned a doubling of tariffs on metals, citing bad relations with Turkey.
EUR/USD moved lower as well in Asian trading, hovering just below the 1.14 level this morning. Markets are concerned over the potential impact of Turkey on what is already a fragile environment in the euro area. The stronger USD has also pushed USD/CNY up to the highest level since May 2017. Chinese money market rates continue to decline in a sign that China is keeping the foot on the accelerator to counteract negative effects of the trade war. Chinese three-month money market rates are now back at previous lows of 2.79%, last seen in 2016 when China was hit by outflows and financial turmoil.
For those of you returning from holiday, here is a quick wrap-up of the main themes over the past three weeks: Vacation Wrap-Up: Market themes over the past three weeks , 12 August 2018.
Download The Full Daily FX Market Commentary
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.