• Global equities trade higher amid easing trade tensions
  • EURUSD drops after dovish comments from ECB President Draghi
  • Markets will watch the US Fed meeting today at 19:00 BST

Global equities traded higher yesterday and overnight following dovish comments from ECB President Draghi and after Chinese President Xi and US President Trump agreed to meet at the G20 summit next week. Trump also said he would achieve a ‘fair deal’ or no deal with China (Bloomberg)
EURUSD moved sharply lower yesterday from c.1.1240 to c.1.1190 after ECB President Draghi indicated the potential for further stimulus. He said that the ECB could still cut rates, adjust its guidance and also had ‘considerable headroom’ for more asset purchases (Reuters)
Following the speech, European bonds rallied and yields fell to record lows across Europe
GBPUSD traded slightly higher yesterday ahead of the second Conservative leadership ballot, which took place in the evening. Former Foreign Secretary Johnson continued in the lead with 126 votes, whilst current Foreign Secretary Hunt came in second with 46 votes. Former Brexit Secretary Raab won just 30 votes and was eliminated
A third ballot will take place today between 15:00 and 17:00 BST, and a fourth tomorrow if required to find the final two candidates
Today’s focus is on the US Fed meeting at 19:00 BST. Whilst a rate cut is not expected, Barclays Research expects the committee to ‘adjust its statement to signal a move away from its current stance of “patience” to one of “flexibility” while assessing incoming information.’ This change is likely to be interpreted as a sign that rate cuts will follow, in response to further deterioration in data
Elsewhere, US President Trump is reportedly weighing sanctions on Turkey over its purchasing of Russian S-400 missile defence systems. USDTRY spiked to c.5.9170 following the headlines, before receding partially (Bloomberg)