Summary:
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Antipodean currencies underperform against other majors
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Riskier assets benefit from Trump-Juncker meeting outcome
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Investors await post-meeting ECB press conference (1:30 pm BST)
Gains can be seen on the most of the European blue chip indices thanks to Trump and Juncker working out a trade deal. However, Belgian shares can be named as the biggest underperformers as the BEL20 index is trading over 0.7% lower at press time. JPY and CAD are the strongest currencies in the G10 basket today while Antipodean currencies (AUD and NZD) are trading lower against all the other majors. Taking a look at the commodity market we can see industrial metals, grains and oil trading generally higher. On the other hand, precious metals trade mixed as palladium and platinum advance while gold and silver pull back. ECB decision is the event of the day but no fireworks are expected as the Bank is widely anticipated to leave monetary settings unchanged. However, additional volatility may spur at 1:30 pm BST as Mario Draghi will held a post-meeting press conference.
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The British lawmakers has been concerned over how to deliver a Brexit that would cut the ties with the EU while avoiding the hard border on the island of Ireland. The latest leaks suggest that in case no better deal is worked out the option of the last resort would be to leave the Northern Ireland… under the EU market regulations.
On Wednesday Donald Trump and Jean-Claude Juncker hammered out an agreement on trade saying that a meeting was a "new phase" in relations between the two economies and adding it was a "very big day for free and fair trade". The leaders agreed to work together toward "zero tariffs" on industrial goods excluding cars though.
Despite the announcement of the end of the QE programme the common currency did not benefit from the latest ECB meeting. This is because the Bank stated that the rates will remain unchanged until at least summer next year. The latest remarks from ECB members suggest that any rate hike will be data-dependant.
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