FX Brief: Calls grow for more ECB stimulus

A summary of news and snapshot of moves ahead of the US session.

  • As we head towards the latter end of the European session, the GBP was the strongest and AUD and EUR among the weakest.
  • GBP continues to shine on short-covering after the expected announcement of Boris Johnson as the new Tory leader and PM yesterday. EUR undermined by Eurozone’s latest manufacturing PMIs, which were recessionary. They have come a day before the ECB makes its interest rate decision. Calls have grown louder for the ECB to introduce more stimulus, or at least promise to do so. The probability of a 10 basis point cut in the deposit rate tomorrow rising to just under 50% from around 40% before.
  • Greek debt crisis? What crisis? The 10Y GGB yield has plunged below 2% for first time ever.
  • Thanks to falling bond yields across the developed economies, sentiment towards stocks and precious metals continue to remain favourable.
    • Gold is up after staging a corrective pullback over the past few days; silver has hit a new 2019 high!
    • Stocks are not as eye-catching as the day before, but sentiment still positive after Mnuchin said he expects his trip on Monday to China trip will be followed by Washington meetings. Company earnings coming in thick and fast: Facebook and tesla among companies reporting after the bell. It may be worth keeping an eye on tech names after the US government announced last night that it was investigating Google, Amazon, Apple and Facebook for anticompetitive practices.
  • No major data expected today


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.