Danske Research Team
Danske Bank A/S
Market movers today
-
We start the week quiet on the data front with no key releases scheduled for today. Later in the week PMI figures and the ECB meeting will set the tone for financial markets. We expect the ECB to tweak the forward guidance at the July meeting, setting the scene for a comprehensive easing package to be unveiled in September, see our ECB Preview: Warming up for Draghi's Grande Finale , 22 July 2019.
-
After a month of heated debates, the race to replace Theresa May as Britain's new prime minister will culminate today. Opinion polls continue to point to Brexit hardliner Boris Johnson as the frontrunner. While the vote counting starts today, the new prime minister will be announced tomorrow. Over the weekend, UK Chancellor of the Exchequer Philip Hammond has already threatened to resign should Johnson win the leadership in opposition to his no-deal Brexit strategy.
-
Later in the day, Bank of Japan Governor Haruhiko Kuroda will speak at the IMF in Washington.
Selected market news
Japanese stocks fell back this morning after Shinzo Abe's LDP party fell short of a two-thirds super majority in upper house elections. Oil prices rose by 1% after renewed tensions in the Strait of Hormuz and Iran's seizure of a British oil tanker. The earnings season continues this week with just under a third of S&P 500 companies reporting.
Italian yields stalled their rally on Friday, after reports surfaced about Deputy Prime Minister Salvini preparing for a meeting with President Mattarella to call for snap elections. The governing coalition between Five Star and League has come under further strain after the recent corruption scandal involving Salvini and Five Star voting in favour of Ursula von der Leyen as Commission President. The Deputy prime ministers will meet Tuesday in an attempt to avoid a collapse of the government. If a new vote is called, this is likely to be in September as President Mattarella is keen to avoid interference with the 2020 budget, due to be submitted to Brussels by 15 October.
At her traditional summer press conference, Chancellor Angela Merkel stood firm on Germany's balanced budget policy despite the cooling economic momentum and negative yields. Merkel also left the door open for another Brexit postponement, saying, 'If the UK needs more time, we want to provide it'. The chancellor again stressed that the withdrawal agreement could not be reopened, but that a technical solution on the Irish border would make the backstop obsolete. In an interview with Welt am Sonntag , German Economy Minister Altmaier indicated that the EU is ready to scrap duties on key US industrial exports to prevent more taxes on its car sales.
Spanish politics is closing in on an agreement between PSOE and Podemos to get Pedro Sanchez reappointed as prime minister, after Podemos leader, Pablo Iglesias, said he would no longer demand a ministerial post. Parliament will have a first vote on Tuesday and if unsuccessful, a simple majority vote follows Thursday.
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
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.