Europe

European equities open slightly higher

Light gains to begin the session, Eurostoxx +0.3 percent, Germany DAX +0.4 percent, France CAC 40 +0.4 percent & Spain IBEX +0.3 percent

This comes as US futures are also rising, with S& P 500 futures up 0.2 percent, Nasdaq futures up 0.3 percent, and Dow futures up 0.2 percent on the day.

Elsewhere, the dollar is falling across the board as a wave of selling hits it. The catalyst was higher Swiss inflation figures.

EUR/USD has also reached the day’s highs around 1.0680, while GBP/USD is currently up 0.4 percent to 1.2530.

China

Fitch affirms China ratings at ‘A+’ with stable outlook

Fitch released their latest ratings review on China and affirmed China’s ratings at ‘A+,’ citing factors such as the country’s strong external finances. They add that they expect activity to recover in 2H 2022 and China’s economy to grow by 5.2 percent next year, but they see increasing downside risks to their forecast for the Chinese economy to grow by 4.3 percent this year.

Dollar

• The greenback is lower across the board in light trading.
• The dollar is giving back some gains from yesterday in European morning trade, as selling in equities and bonds comes to a halt for the time being.
• Even though 10-year German bund yields are at their highest in eight years around 1.20 percent, 10-year Treasury yields are down 1.6 basis points on the day to 2.915 percent, keeping the dollar in check.
• As seen here, European equities and US futures are also holding slight gains, which is helping to keep investors more relaxed in trading during the London holiday.
• Both the EUR/USD and the GBP/USD are up 0.4 percent on the day, to 1.0690 and 1.2538, respectively, but they are essentially painting the same picture. They are simply recouping some of yesterday’s losses, but price action remains below the key hourly moving averages, indicating that sellers remain in control in the short term.
• As a result, the key hourly moving averages for both pairs, which are at 1.0706-23 (EUR/USD) and 1.2577-94 (GBP/USD), will be key resistance levels to watch if buyers try to recover more ground on the day.
• For EUR/USD, be wary of large option expiries above 1.0700, which could stifle any upside momentum today.

• In other news, the USD/CHF is down 0.4 percent to 0.9590 after hitting a low of 0.9575 earlier today, as previously reported. Meanwhile, the AUD/USD has recovered losses from earlier today, rising from 0.7150 to 0.7180, and the NZD/USD has risen from 0.6475 to near 0.6500.

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