London Open: Texas Instruments the compelling signal across EU equities

Markets

European equities opened lower with Brexit and some disappointing numbers overnight from bellwethers like Texas Instruments (TI) Facebook and Netflix weighing on risk appetite. This is following on Asia, which traded lower weighted down by Asia tech.

It looks like the TI numbers are the compelling signal across Europe this morning as the earnings miss, and dreary forward guidance is throwing a warning shot across the bow of the heavy weighted and heavily owned US tech stocks.

More good news on the " other " US trade war front, in an interview with the FT US Commerce Secretary Ross, has floated new talks with the EU as an alternative to imposing tariffs on auto imports next month. Indeed, it looks like the push is on to get the US consumer in the right frame of mind as the election 2020 process builds.

There is a whole lot of " feel good " priced into the curve as no-deal Brexit and a messy escalation in the US-China trade war tail risks have diminished. The troubling part now is the waiting gaming process to gauge if the Global PMI’s turn and consumer confidence bounces, if not maybe the deals could be viewed as a day late and a dollar short.

Australia and New Zealand Dollar

AUD and NZD are finally showing a bit of a wobble after an extended relief rally. But both pairs have been riding the coattails of improving US-China trade negotiations so positioning could be prone for a correction on any signs of a risk wobble.  A big test for the Aussie will come from tomorrows PMI data, so at least the waiting game will be short for the Aussie traders.

Asia Currency Recap

USDCNH continues to scrape higher in concert with the broad US dollar moves amid very light activity. USDCNY was also bid, possibly on gold-related dollar buying as there was strong Gold demand out of China today as risk turned a bit shaky on the mainland.

 I still expect offshore spot to hold the 7.05-7.10 range into the APEC meeting.

The People's Bank of China injected CNY200 billion liquidity via open market operation, but the market was disappointed due to the absence of a targeted medium-term lending facility.