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A very quiet European trading session due to the fallout from the July 4th holiday, which has sapped liquidity from the market in general and making traders cautious.
In terms of market moves the Eurostoxx 600 edged higher by around 0.85 percent while the EURUSD pair failed to make any major ground above the 1.0900 handle.
The FTSE100 is largely treading water today and the GBPUSD pair is still struggling to gain meaningful traction above the 1.2700 handle in sluggish FX volumes.
On the data front, Germany’s trade surplus narrowed to EUR 14.4 billion in May 2023, compared to a downwardly revised EUR 16.5 billion in the previous month and lower than market expectations of EUR 17.5 billion.
This was the smallest trade surplus since last December, as exports fell while imports rose for the first time in three months. Exports unexpectedly edged down 0.1 percent month-on-month to EUR 130.5 billion, missing the market consensus of a 0.3 percent rise.
Sales dropped by 1.5% to the EU while to countries outside the EU rose by 1.5%, namely China (1.6%) and the UK (5.8%). However, they fell to the US by 3.6%. Meanwhile, imports grew by 1.7% to a three-month high of EUR 116.1 billion, compared with the market forecasts of a 3.1% growth.
Purchases from EU countries increased by 3.5% while those from non-EU countries shrank 0.3%, namely the US (-5.7%), and Russia (-17.3%). By contrast, they increased from China (2.7%) and the UK (15.3%).
On the news from Pan Gongsheng was appointed as party secretary for the PBOC This puts him in line as the next PBOC governor and is likely a directive for Yi Gang to step down from the post. Yi has been in charge of China’s central bank since 2018.
The reshuffle comes amid a time where the post-Covid recovery in China has pretty much come to a complete halt. It also comes as the yuan exchange rate is coming under pressure and also as Beijing are introducing a host of measures to try and tighten its grip on the financial sector.
According to Reuters sources, Pan’s appointment points to growing concerns within the country’s leadership over systemic risks in the financial sector.
