16 Jun 2014
European open: Risk aversion on Iraq tensions
FXStreet (London) - Escalating tensions in Iraq helped to drive a flight to safety overnight with the yen climbing to a four-month high against the euro, while most Asian equity markets declined overnight.
Iraq: Sunni in the north, Shi’ite in the south
Iraq government military spokesman Qassim Ata announced yesterday that the army had killed 279 insurgents in addition to destroying 50 of the opposition’s vehicles. The announcement came on the same day that Sunni insurgents seized Turkmen in northwestern Iraq following heavy fighting. The advance sees Sunni opposition solidify their hold of northern Iraq with the country teetering on the edge of ethnic and sectarian civil war.
The Nikkei fell 0.9 percent overnight, while haven demand helped to lift gold prices to their highest level in three weeks.
Crude futures for July delivery have advanced a further 0.51 percent to USD107.46/bl on supply concerns.
Higher-yielding AUD and NZD currencies continued to perform over the session, despite the climate of risk aversion. The New Zealand REINZ report showed a cooling of the housing market, now down 6.5 percent year-on-year. Following last week’s Monetary Policy statement from the Reserve Bank of New Zealand, the central bank continues to be seen as the most hawkish in the G8 and is expected to continue with its schedule of rate hikes.
Quiet European session
Europe sees another very quiet day of data announcements, with only the final reading of may CPI, expected to remain at 0.5 percent year-on-year.
In the US, focus is going to be on industrial production figures, where it is expected that we will see further firming of US macro data, continuing the rebound from weaker data in the first quarter of this year. Industrial production is expected to rise 0.5 percent after a decline of 0.6 percent in April.
Iraq: Sunni in the north, Shi’ite in the south
Iraq government military spokesman Qassim Ata announced yesterday that the army had killed 279 insurgents in addition to destroying 50 of the opposition’s vehicles. The announcement came on the same day that Sunni insurgents seized Turkmen in northwestern Iraq following heavy fighting. The advance sees Sunni opposition solidify their hold of northern Iraq with the country teetering on the edge of ethnic and sectarian civil war.
The Nikkei fell 0.9 percent overnight, while haven demand helped to lift gold prices to their highest level in three weeks.
Crude futures for July delivery have advanced a further 0.51 percent to USD107.46/bl on supply concerns.
Higher-yielding AUD and NZD currencies continued to perform over the session, despite the climate of risk aversion. The New Zealand REINZ report showed a cooling of the housing market, now down 6.5 percent year-on-year. Following last week’s Monetary Policy statement from the Reserve Bank of New Zealand, the central bank continues to be seen as the most hawkish in the G8 and is expected to continue with its schedule of rate hikes.
Quiet European session
Europe sees another very quiet day of data announcements, with only the final reading of may CPI, expected to remain at 0.5 percent year-on-year.
In the US, focus is going to be on industrial production figures, where it is expected that we will see further firming of US macro data, continuing the rebound from weaker data in the first quarter of this year. Industrial production is expected to rise 0.5 percent after a decline of 0.6 percent in April.