Market Roundup
• NY Fed Mfg May -9.02 vs 6.50 forecast, 9.56 previous.
• US NAHB housing market Index May 58 vs 59 forecast, 58 previous.
• Fed’s Lacker: having delayed (hikes) in first part of year we need to be thinking about catching up.
• Treasury's Lew urges China to ensure fairness for U.S. exporters.
• Brexit Polls: ICM phone poll 47% Bremain/39% Brexit; Online poll: 47% Brexit/43% Bremain.
Looking Ahead - Economic Data (GMT)
• 04:30 Japan Industrial Output Rev Mar 3.6%-previous
• 04:30 Japan C
apacity Util Index chinasese MM Mar -5.4%- previous
Looking Ahead - Events, Other Releases (GMT)
• 01:30 Australia The Reserve Bank of Australia to publish the minutes of its May policy meeting
Currency Summaries
EUR/USD is likely to find support at 1.1280 levels and currently trading at 1.1318 levels. The pair has made session high at 1.1342 and hit lows at 1.1312 levels. The dollar initially eased against euro on Monday as big gains in oil prices rekindled demand for the euro and commodity-sensitive currencies, reducing concerns global growth. With no major U.S. data on the day, dollar was sold off early, but dollar rebounded back in mid-morning US session. On Tuesday investors will get readings on Aprils Building permits and CPI, FOMC meeting on Wednesday. All three metrics will be closely watched by investors as they could signal that inflation is rising faster than anticipated. A number of U.S. Federal Reserve policymakers are scheduled to speak this week, but analysts held out little hope that their comments would significantly revive expectations for interest rate in the near future.
GBP/USD is supported in the range of 1.4330 levels and currently trading at 1.4391 levels. It reached session high at 1.4413 and dropped to session low at 1.4366 levels. Sterling edged up from a three-week low against the dollar on Monday, as demand for GPB soared, amid a slew of warnings about the impact of a potential Brexit. Most recent polls ahead of Britain's June 23 referendum on European Union membership show the outcome is still too close to call. The latest telephone poll from ICM showed the Remain camp holding an eight-point lead over its leave rivals, while an online poll published at the same time put the leave camp four points ahead. Sterling fell to as low as $1.4333 after Osborne's comments, its weakest since April 22, before recovering to trade at $1.4408 after the latest polls. That left the pound up 0.3 percent on the day but around 2 percent down compared with two weeks ago.
USD/JPY is supported around 108.45 levels and currently trading at 108.96 levels. It peaked to hit session high at 109.09 and made session lows at 108.74 levels. The Japanese yen weakened on Monday as risk appetite improved with the rise in oil prices and Japan, set to host a G7 meeting later this week, again signaled its willingness to intervene in the market to weaken its currency.U.S. crude futures were up more than 3 percent on the day, driving a rally on Wall Street and pushing Treasury yields higher. Gains in these markets meant less flows for safe-haven currencies such as the yen. In late trading, the dollar rose 0.3 percent versus the yen to 108.97 yen . Since hitting an 18-month low versus the yen early this month, the dollar has rallied more than 3 percent. The dollar index fell 0.1 percent to 94.54, after two straight days of gains. The index edged lower after a weaker-than-expected reading of New York's Empire State survey.
USD/CAD is supported at 1.2867 levels and is trading at 1.2899levels. It has made session high at 1.2941 and lows at 1.2874 levels. The Canadian dollar made small gains against its U.S. counterpart on Monday as oil rallied to a six-month high and as Canadian home sales rose in April to their highest level ever. The commodity-linked currency had a subdued reaction to oil prices rising amid increasing output disruptions in Nigeria and after Goldman Sachs said a near-two-year glut in the market had ended and flipped to a deficit. Sales of existing homes in Canada rose in April from March, even as activity in the two largest markets, Toronto and Vancouver, appears to have peaked, a report from the Canadian Real Estate Association showed on Monday.
Equities Recap
European ended steady on Monday, having recouped early losses, as stronger mining stocks offset weakness elsewhere, with Telecom Italia a standout gainer on the back of its cost-cutting plans.
UK's benchmark FTSE 100 closed up 0.1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.36 percent, Germany's DAX ended up by 0.8 percent, France’s CAC finished the day up by 0.3 percent.
Wall Street rallied sharply on Monday, juiced by a jump in Apple shares and gains from energy stocks that were backed by stronger oil prices.
Dow Jones closed up by 0.10 percent, S&P 500 ended up by 0.97 percent, Nasdaq finished the day down by 1.22 rest.
Treasuries Recap
Short-dated U.S. Treasury yields rose to two-week highs on Monday as a surge in stocks and oil prices reduced demand for safe-haven U.S. government debt and U.S. economic data showed short-term inflation could be rising.
The two-year, 10-year yield curve hit its flattest since March 4 in early trading, at 93.7 basis points, compared with 95 basis points late on Friday.
The five-year, 30-year yield curve hit its lowest since April 27. Benchmark 10-year notes fell 13/32 in price to yield 1.75 percent, up from 1.71 percent on Friday. Yields for two-year Treasury notes rose as high as 0.79 percent.
Commodities Recap
Gold prices turned slightly negative on Monday, reversing gains of 1 percent on pressure from strong crude futures and U.S. equity markets.
Spot gold was down 0.05 percent at $1,272.50 an ounce at 2:07 p.m. EDT (1807 GMT), after rising as much as 1.2 percent to $1,288.20. U.S. gold futures for June delivery settled up 0.1 percent at $1,274.20 an ounce.
Oil prices hit six-month highs on Monday on worries about global supply outages and as long-time bear Goldman Sachs sounded more positive on the market, although a stockpile build at the U.S. storage hub for crude futures limited gains.
Brent crude futures settled up $1.14, or 2.4 percent, at $48.97 per barrel. It rallied to $49.47 earlier, its highest since early November, in a test towards $50.
U.S. crude's West Texas Intermediate (WTI) futures rose by $1.51, or 3.3 percent, to end at $47.72 after touching a six-month high at $47.85
