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The pound and the euro fought it out for the top spot, with the euro eventually coming out on top. The Greenback and the yen, meanwhile, were in a race to the bottom.

  • Spanish PPI y/y: 2.9% vs. 1.9% previous
  • German IFO business climate: 101.8 as expected vs. 102.2 previous
  • German IFO current conditions: 105.1 vs. 105.7 expected, 106.0 previous

Major Events/Reports:

ECB’s Vasiliauskas speaks

ECB Member Vitas Vasiliauskas was interviewed by the Wall Street Journal earlier.

And with regard to monetary policy, he had this to say:

“I think from the current perspective, maybe we can think about the possibility to discuss further steps in autumn [next year], but as I said, discuss.”

Vasiliauskas was also asked to clarify the ECB’s forward guidance during the June 14 ECB statement wherein the ECBc communicated that rates won’t be moving “at least through the summer of 2019.”

And Vasiliauskas simply stated that:

“In this part of the world, summer means until the end of September.”

Overall, Vasiliauskas’ comments heavily imply that the ECB won’t be making a move before the October 2019 ECB meeting while also implying that a rate hike will likely come after the October 2019 ECB meeting, which is a rather dovish message.

Some trade-related updates

Earlier today, officials from China and the E.U. delivered a joint statement after trade talks ended.

Chinese Vice Premier Liu He got some press time first and he said that:

“Both sides believe that we must resolutely oppose unilateralism and trade protectionism and prevent such behavior from causing volatility and recession in the global economy”

His European counterpart, E.U. Commission Vice President Jyrki Katainen, had this to say:

“It is essential that we work together to tackle overcapacity in sectors such as steel and aluminum.”

In other news, an unnamed Chinese official announced that China and France have hammered out a deal on French beef imports. No additional details were provided but Chinese Premier Li Keqiang said that “China was willing to further open its market and buy more French agriculture products,” according to a Reuters report.

Downbeat start in Europe

The major European equity indices are opening the new trading week on a sour note it seems, since they were broadly in negative territory for the day.

And according to market analysts, the intense risk-off vibes in Europe were due to trade-related news and rumors from last week and over the weekend, which took their toll on European car makers and banks and then poisoned overall risk sentiment.

  • The pan-European FTSEurofirst 300 was down by 1.12% to 1,489.29
  • Germany’s DAX was down by 1.31% to 12,414.42
  • The blue-chip Euro Stoxx 50 was down by 0.93% to 3,405.35

U.S. equity futures also got dragged down, hinting that the risk-off vibes may carry over into the upcoming U.S. session.

  • S&P 500 futures were down by 0.53% to 2,744.75
  • Nasdaq futures were down by 0.88% to 7,159.00

Global bond yields recover

The risk-off vibes also stoked safe-haven demand for bonds, sending global bond yields lower at the start of the session. However, global bond yields eventually came off their lows and some were even in positive territory again for the day.

  • German 10-year bond yield already up by 0.30% to 0.334%
  • French 10-year bond yield already up by 2.11% to 0.721%
  • U.K. 10-year bond yield still down by 0.76% to 1.310% but off the day’s low at 1.268%
  • U.S. 10-year bond yield still down by 0.43% to 2.888% but off the day’s low at 2.866%

Major Market Mover(s):


The euro got a bullish boost when the London session rolled around and then got another bullish boost near the end. It’s not really clear what pushed the euro broadly higher, though.

Sure, there was that positive trade-related update for the Euro Zone –  the one where China  and the E.U. announced that they’ll fight protectionism. However, the euro barely reacted to that.

Moreover, the second wave of euro bulls attacked after Vasiliauskas’ comments which reinforced the idea that the ECB won’t be hiking rates anytime soon. But then again, that news about China and France reaching a deal on importing French beef began to make the rounds at the time.

Also, the euro got bullish injections at around the same time that the Greenback was getting kicked lower, so the euro may have been feeding off the Greenback’s weakness.

EUR/AUD was up by 53 pips (+0.34%) to 1.5733, EUR/NZD was up by 67 pips (+0.40%) to 1.6940, EUR/GBP was up by 14 pips (+0.16%) to 0.8799


The pound was the second top-performing currency of the session after the euro. And like the euro, there were no clear catalysts for the pound’s price action.

One thing worth noting, however, is that the pound got bid higher at around the same time the euro got bid higher and the Greenback got slapped lower, so the pound may have also been feeding off the Greenback’s weakness as well.

GBP/USD was up by 43 pips (+0.33%) to 1.3283, GBP/AUD was up by 33 pips (+0.19%) to 1.7881, GBP/CAD was up by 37 pips (+0.21%) to 1.7655


The Greenback was the second worst-performing currency of the session, even though there weren’t any apparent catalysts. Perhaps trade-related worries are weighing on the Greenback?

EUR/USD was up by 56 pips (+0.49%) to 1.1687, AUD/USD was up by 11 pips (+0.15%) to 0.7428, NZD/USD was up by 7 pips (+0.10%) to 0.6899


The yen was the weakest currency of the session, even though risk aversion clearly dominated. And we can probably blame that on the broad-based recovery in bond yields.

USD/JPY was up by 15 pips (+0.14%) to 109.58, EUR/JPY was up by 80 pips (+0.63%) to 128.08, GBP/JPY was up by 68 pips (+0.47%) to 145.56

Watch Out For:

  • 2:00 pm GMT: U.S. new home sales (667K expected 662K previous)