EU Daily Market Wrap - 24th May 2019

EU Daily Market Wrap - 24th May 2019

Today's Highlights

  • UK Prime Minister May resigns opening the bid to Conservative leadership

  • UK Retails Sales growth contracts in May

  • Chinese officials "We are able to minimise impact of tariffs"

  • US Core Durable Goods tumble in April

Macro Review

The last trading session of the week was pretty much uneventful in terms of price action as traders look for fresh catalysts after a busy week of discounting Brexit risk and Trade tensions. The focus this morning switched on Downing Street where UK PM May officially resigned during an emotional speech to the Nation. Not a great deal of response overall in the market as this risk was mainly priced-in.The attention now will be on who will replace her with consequent market reaction linked to the political stance on Brexit of the next Tory leader. We also had a couple of tweets from China reiterating its recent hard stance and willingness to confront the US on tariffs. We also had unverified sources today suggesting China will impose quotas on rare earth elements as retaliatory measures against the US. Interesting week and month ahead on the geopolitical front.

US Equities paired back some of the losses from yesterday after China harder stance on tariffs. Wall street showed good signs of resilience despite the uncertainty over the duration of this trade war against the economic giants of the world.Though SP500 recovered off yesterday's low it struggled to push to new highs dragged by semi-conductors and basic materials. Nasdaq and Dow Jones are now poised to finish their third consecutive week in red. 

On the FX front, the USD Dollar was a touch softer today with the index trading still above the 97 level. EUR remained around its weekly highs amid dollar weakness also hindered by weakness in US data. The April Durable Goods growth contracted to -2.1% from 2.0% in March - notably revised lower to 1.7%. GBP traded sideways after PM May resignations and rumours regarding her successor with the bookies discounting Boris Johnson as the most likely to be the next Prime Minister. Watch today's market reaction HERE after the announcement in case you missed.  AUD finished in positive amid USD weakness whereas JPY was range bound as the market lacked clear direction. 

Crude Oil traded flat after an initial rebound showing signs of weakness after yesterday's 5% drop. Gold settled above the 1280 level after a rangebound session signed by lack of direction in the US Dollar and risk appetite.

EU Close

If you missed the morning briefing from the desk click HERE

Hope you enjoyed the session and I wish you all a lovely weekend

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