ECB VIEW: J.P.Morgan Push Back Timing Of Final Hike Call To October
Aug-23 11:43
J.P.Morgan note that Eurozone “PMIs drop to a level consistent with a stall in growth”
- They now “expect the ECB to pause in September to see more data,” and push back the timing of their call for what they believe will be the final hike in the current cycle to October (prev. September).
- They caveat that with “the September decision can still be affected by ECB commentary and next week’s flash HICP, but a postponement feels more likely right now than another 25bp hike.”
- They conclude by noting that “the ECB’s objective in pausing would be to see more data to better assess the near-term outlook. Hence, unless we make a bigger reassessment of the expansion, a final hike would still be likely in October given current labour market signals. So, today, we are only postponing a September hike to October.”
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USD: Currency Markets Catch Up With Bond Yields as Greenback Fades Into NY Hours
Jul-24 11:40
- Greenback fading off the intraday highs headed into NY hours, with EUR/USD and GBP/USD recovering off the PMI-inspired lows. Currency markets playing catch up with bonds, as the US 10y yield retreats to the lowest levels of the session so far and looks comfortably through the Friday lows.
- Unsurprisingly EUR futures volumes sit well ahead of average for this time of day, with cumulative activity 50% ahead. Similar story for JPY futures, however GBP markets are more muted despite the softer-than-expected PMI data this morning.
- Larger options rolling off at the cut today include: EUR/USD: $1.1130(E512mln), USD/JPY: Y140.00($1.7bln), Y140.25($500mln), Y142.00-15($810mln), EUR/GBP: Gbp0.8600(E600mln), AUD/USD: $0.6780-00(A$1.5bln)
US TSY FUTURES: UXY Blocked
Jul-24 11:40
Latest block trade lodged at 12:21:16 London/07:21:16 NY:
- UXYU3 1.75K lots blocked at 118-16+, looks like a buyer.
SPAIN: Catalan Separatist ERC Leader Warns Against Repeat Elections
Jul-24 11:37
Oriol Junqueras, President of the Catalan Separatist party the Republican Left of Catalonia, has warned Prime Minister Pedro Sanchez against gambling on a second snap election and called on Sanchez's center-left PSOE to build a coalition with Catalan parties.
- According to Reuters, Junqueras said: "He wants to reach agreement to build an alternative to prevent a PP-Vox government and defend Catalonia’s interests."
- Junqueras says, "socialists should not be tempted to repeat elections, we should not give another opportunity to a conservative government."
- Junqueras says, "socialists will have to respect Catalonia if they want ERCs support to a potential investiture."
- The surprise underperformance from the right at yesterday's election has opened to the door to Catalan political parties to leverage their strength as a potential coalition partner to the center left PSOE.
- More from MNI's political risk team here: MNI POLITICAL RISK ANALYSIS-Underperformance Of The Right Raises Risk Of Paralysis, Snap Election
