EQUITIES: EU Cash Opening Calls

BNP (17th Oct) 80p vs (21st Nov) 76p, bought the Oct for 1.55 in 1.25k.

Of note:

EURUSD 2.2bn at 1.1650/1.1665 (could act as magnet).

EURUSD 1.07bn at 1.1700 (wed).

EURUSD 5.76bn between 1.1600/1.1700 (fri).

• EURUSD: 1.1650 (1.83bn), 1.1665 (406mln), 1.1700 (220mln), 1.1705 (382mln), 1.1710 (282mln), 1.1750 (1.27bn).
• USDJPY: 150.00 (79mln), 150.60 (525mln), 151.00 (676mln).
• NZDUSD: 0.5810 (276mln), 0.5820 (305mln).

The French trade deficit was E5.53bln in August, down from E5.74bln in July (revised from E5.56bln initial) and a year-to-date high of E7.42bln in February. Assuming unchanged nominal GDP growth of ~0.5% Q/Q in Q3, this implies a steady goods trade deficit of around 2.7% GDP.

• Imports fell 0.4% M/M for the second consecutive month, a sign of continued weakness in domestic demand against a backdrop of ongoing political/fiscal/economic uncertainty. However, Y/Y import growth continues to slowly recover from the 2023 lows, trending back toward pre-covid growth rates.
• Total exports fell 0.1% M/M in August, after two solid months of 3.5% and 1.7% growth in June and July. Like imports, a recovery in annual export growth from the 2023 lows is intact, though momentum is lacking. This may reflect the direct impact of US tariffs, even with trade policy uncertainty having declined since the EU-US trade agreement was struck in August. Although exports to the US rose 4.9% M/M in August, 3m/3m and Y/Y 3mma growth remains negative.
• September’s PMI round was in fitting with this theme:
  • Manufacturing PMI: “Exports were also a drag on overall orders during the latest survey period, with companies mentioning US tariffs and generally sluggish market conditions as reasons for lower overseas demand.”
  • Services PMI: “French service providers closed out the third quarter with another decline in new business from abroad. Albeit softer than August's year-to-date record, the contraction remained solid”.