Stocks struggle for direction, SEK surges on GDP report

Summary:

• SEK surges as GDP report provides a strong beat

• European equities are trading slightly lower

• Investors are preparing for meetings of crucial central banks

Major European stock indices struggled for traction in the morning after opening slightly lower. Similar situation could be observed throughout the Asian session therefore one may assume that investors are taking it easy at the beginning of the week focused on the monetary policy. Our weekly calendar review can be found here. Taking a look at the FX market one can see SEK outperforming other majors on the back of stellar GDP report. On the other hand, USD along with the JPY are taking the biggest step back ahead of BoJ and FOMC meetings. Commodities are trading mostly higher on the day with the biggest gains being seen on the oil and wheat market. However, zinc and copper are taking quite a noticeable step back.

The end of the previous week did not bring any fireworks when it comes to the cryptocurrency market. Over the weekend major cryptocurrencies were trading rather flat. At the beginning of Monday’s trading we are observing a continuation of this trend. Today’s major topics concern the Google’s crypto-related ban as well as one, particular football club from Gibraltar.

Soybean prices have clearly underperformed lately on the back of trade frictions between the US and China - the two world’s largest economies. While China declared to buy almost all US grains available for exports some time ago, new tariffs being implemented by the US changed this view quite perceptibly.

The Swedish economy expanded at a much quicker pace than anticipated in three months through June. Robust growth underpins the likelihood of a monetary tightening by the year end. Having said that, domestic inflationary pressures remain fairly contained looking at GDP deflator.

Trump-Juncker meeting may have put the trade dispute between US and EU on hold but one should remember that the US-China trade war is still on the roll. BMW is another company after Daimler and Tesla that has decided to lift car prices in China. BMW announced that it will raise suggested retail prices for its X5 and X6 models produced in its US factory in South California.

Most of Asian indices have moved lower as investors are gearing up for crucial monetary policy meetings this week with the first one as soon as tomorrow morning (BoJ, then FOMC and BoE). Notice that the BoJ’s meeting seems to be one of the most important events for Asian investors for this week.