MXN notably softer this morning following comments from President Trump who stated that the US would probably scrap NAFTA at some point (Mexico are to hold 2nd round of talks in September). Additionally, Trump also promised a government shutdown in order to build Mexico border wall, subsequently pushing USD/MXN higher by 0.5%.

EUR: No fireworks from Draghi at the Lindau meeting as the President does address future policy or economic outlook in his speech. EUR edging higher this morning amid firm PMI readings from the Eurozone’s two largest economies, Germany and France.

GBP slightly lower today, although much of the focus is on the GBP TWI, which is now at a fresh 2017 low at 74.90. Subsequently, suggesting that the outlook for import prices could be back on the rise. Today will set to soften its stance today on new legal laws, requesting to only end ‘direct jurisdiction’ of the ECJ after Brexit.

NZD is the worst performer, slipping by 0.8% after the NZ governments pre-election fiscal update, in which they cut their GDP forecast, while cross related buying seen through AUD/NZD had also kept NZD pressured as the cross breached 1.09.

Fixed Income

Bund yield ticking higher this morning following the aforementioned better than expected German PMI readings, while slight outperformance has been seen in the short run end of the curve. Peripheral debt continues to underperform its German counterpart with Italian spreads wider by 3.9 bps.


WTI & Brent crude futures are marginally lower this mornings, despite the headline drawdown in the API Crude report, however there had been a sizeable build in Gasoline and Distillate inventories. Gold prices tracking higher by around 0.1% given the slight softness observed in equity markets.


On a broad basis EU Bourses are trading slightly lower across the board, Eurostoxx50 (-0.1%) following President Trump’s stormy speech in which he stated he would shut down Government in order to build a wall in-between USA and Mexico, while also commenting he could get rid of NAFTA. In stock specific news WPP shares are on course for its worst trading session in 19 years, falling 10% after the company cut its year outlook.

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