EU Morning Update - Equities struggle as the risk-off mode kicks in

  • Risk-off overnight as equities trade softer.
  • AUD is the main laggard in FX.
  • Nat Gas continues to fall overnight
  • Trump is due to speak at Davos.

Equities and Macro

Clear risk-off mode overnight as the Nikkei 225 fell -0.91%, ASX -0.19% and the Shanghai Composite dropped -1.41%. These moves come after the US was closed yesterday due to MLK day and China is having issues with a Sars like outbreak where 4 people have been confirmed dead.
At the start of the EU session, its much of the same as the FTSE 100 has fallen -1.03% and the DAX (-1.26%) struggles too.
Yesterday US President Trump and France's Macron agreed on a trade truce deal after issues with a digital tax. 

BoJ also kept monetary policy unchanged overnight. USD/JPY trades 0.20% lower at the start of the EU session but strength in the JPY can be attributed to the risk tone.
AUD is one of the worst performers in the major currency pairs as rate cut fears still linger but the underperformance of copper (1.65%) has not helped.

In commodities markets, natural gas (-4.29%) continues to fall as warmer than expected weather conditions hit the sector. 
Gold has pulled away from its overnight highs despite the poor risk sentiment. The precious metal trades at $1559.16/oz around 0.11% lower. 

Day Ahead
Looking ahead to the rest of the session, we will be looking out for UK earnings data, German ZEW, Canadian manufacturing sales, and the GDT price index.
US President Donald Trump will also be speaking at Davos.