Summary:

• British pound bounces back following a mixed bag from the industrial sector
• European stocks remain on the back foot while US futures point to a weaker open
• Bonds in a retreat across the world being the most support for GBP and USD

The European stock markets have gone off the boil as the week is slowly coming to  an end. The cause seemed to come from the US as the stalemate with regard to a tax reform appears to stay in place for a while. As a result the US indices ended the day lower which nevertheless had no an impact on the Asian markets. On the other hand the European equity markets haven’t been able to recoup their yesterday’s falls so far and right now they’re trading below the unchanged line. In this respect it’s worth paying closer attention to the German DE30 which is on the verge of a bear market.

On the FX front one may notice that the GBP is outperforming its peers following better than expected industrial readings, however gains aren’t particular. What’s more while economists surveyed by Bloomberg had looked for just a moderate increase in industrial output those who had paid attention to manufacturing PMI should not be caught off-guard. Besides, the FX session has been muffled thus far even as the bond yields are increasing. At the time of writing the US10Y yield is adding 3 bps, the German 10Y yield is rising 1.5 bps while the UK10Y yield is going up 4bps.

Over the course of the last days we wrote that while Bitcoin was gaining momentum its major peers lagged behind. However, it looks as things have changed since then as major virtual currencies have manged to almost catch up Bitcoin. Let’s remind that Bitcoin stopped rising after revelations that the SegWit2x had been called off. One may suspect that after a debacle related to the SegWit2x traders decided to step up their purchases of other cryptocurrencies and as a result Dash (DSHUSD), Ethereum (ETHUSD) and Litecoin (LTCUSD) experienced an increased demand.

This week has been relatively benign in terms of fresh macroeconomic data, however the last day will offer some insight into the US economy. Besides, we’ll get the data on a change in active oil rigs from the US which is anticipated to bring another decrease.