Market roundup
• US May Markit Mfg PMI flash 50.5 vs 51 forecast, 50.8 previous.
• EZ May consumer confidence -7 vs -9 forecast, -9.3 previous.; 2nd consecutive rise.
• Fed’s Williams: good markets reacted to FOMC mins; Brexit a factor in Jun decision can always hold off until July.
• USD gains against EUR on Fed comments, slips against yen.
• Japan economy remains in moderate recovery despite quake damage-govt.
• Brazil's Meirelles: gov't to unveil measures to curb spending Tuesday; measures to have permanent impact.
• Copper market in 24,000 tonnes surplus in Feb 2016 – ICSG.
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1178 levels and currently trading at 1.1219 levels. The pair has made session high at 1.1231 and hit lows at 1.1185 levels. The U.S. dollar inched higher against the euro on Monday after Federal Reserve officials made hawkish remarks on monetary policy. Feds St. Louis Fed President James Bullard said keeping U.S. interest rates too low for too long could cause financial instability and that stronger market expectations for a rate rise were probably good. Topping the agenda this week is whether U.S. data adds to the likelihood of a June or July rate increase, with a handful of appearances by Fed policymakers expected to back the case for a move within months. The euro was last down 0.29 percent against the dollar at $1.1206. Meanwhile, San Francisco Fed President John Williams said on Monday that the central bank would probably tighten policy a bit quicker in 2017 than this year, by perhaps one or two more interest rate hikes.
GBP/USD is supported in the range of 1.4410 currently trading at 1.4482 levels. It reached session high at 1.4491 and hit low at 1.4443 levels. British pound gave back some of last week's gain against the dollar as investors were still worried that a looming June 23 referendum could see Britons vote to leave the European Union. The British pound was also weighed down by warnings from Prime Minister David Cameron and finance minister George Osborne that a vote to leave the EU could push Britain into a year-long recession and cost at least half a million jobs. The cable initially traded as high as $1.4550, sterling slipped back to $1.4475, a 0.2 percent decline on the day. Sterling tends to underperform during times of risk aversion because of the huge investment flows Britain relies on to balance its more than 5-percent current account deficit. The dollar index, which measures the greenback against a basket of six major rivals, was last down 0.12 percent at 95.223.
USD/CAD is supported at 1.3051 levels and is trading at 1.3149 levels. It has made session high at 1.3171 and lows at 1.3116 levels. The Canadian declined against US dollar on Monday as comments by U.S. Federal Reserve's official’s fueled optimism for further interest rate hikes in June. St. Louis Fed President James Bullard said on Monday that higher expectations on a rate increase is probably good, while San Francisco Fed chief John Williams said a forecast for two to three rate hikes in the rest of 2016 is about right. Also a decline in crude oil prices weighted on Canadian dollar, oil prices fell and were on track for a fourth session of losses as investors worried about global supply, while copper fell toward three-month lows hit last week. Brent crude prices were down 1 percent, on pace for a four-day losing streak and matching a similar run in mid-April, as investor focus returned to global supply, with Iran insisting on a rise in oil exports and U.S. drillers slowing the reduction in rigs. U.S. crude was down 1 percent at $47.90 a barrel.
USD/JPY is supported around 108.71 levels and currently trading at 109.21 levels. It peaked to hit session high at 109.47 and made session lows at 109.10 levels. The U.S. dollar declined almost 1 percent against the Japanese yen on Monday on Japanese trade data and Washington's resistance to currency intervention by Tokyo, but was little changed against the euro as investor’s awaited fresh U.S. economic data. Besides the trade data, a Group of Seven finance ministers' meeting concluded on Saturday with the United States warning Japan against intervening to weaken the yen, a rift that is perceived as preventing Tokyo from acting. The dollar was last down 0.86 percent at 109.19 yen, near a session low, after data showing Japan logged a trade surplus for the third consecutive month. The dollar was set for its biggest daily percentage decline against the yen in more than three weeks.
Equities Recap
European stocks ended lower on Monday as investors digested the outlook for global growth and speculation that US Federal Reserve could hike interest rates in June.
Britain's blue-chip FTSE 100 index closed down by 0.2 percent, France's benchmark CAC-40 index closed down by 0.5 percent, Germany's DAX ended down 0.6 percent, meanwhile the pan-European Eurofirst 300 index was down by 0.39 percent.
Wall Street ended lower on Monday as a bounce in Apple failed to offset concerns that the U.S. Federal Reserve could raise interest rates sooner than later.
Dow Jones closed down by 0.07 percent, S&P 500 ended down by 0.19 percent, Nasdaq finished the day down by 0.03 percent.
Treasuries Recap
Short-dated U.S. Treasury yields rose on Monday, with the two-year yield hovering at its highest in two months, as traders bet the Federal Reserve may raise interest rates as early as June if the economy shows further improvement.
Benchmark 10-year Treasury notes were up 4/32 in price with a yield of 1.835 percent, down 1 basis point from Friday.
Commodities Recap
Gold dipped to a 3-1/2-week low on Monday as expectations rose that the U.S. Federal Reserve will hike interest rates as early as June, but prices came off their lows as late-day short-covering entered the market.
Spot gold fell to $1,242.63 an ounce, the lowest since April 28, in earlier trade, and was down 0.1 percent at $1,250.96 an ounce at 3:25 p.m. EDT (1925 GMT). U.S. gold futures for June delivery settled down 0.1 percent at $1,251.50 an ounce.
Oil prices eased again on Monday after Iran vowed to ramp up output and as the number of rigs drilling for crude in the United States held steady after declining for eight straight weeks.
At the settlement, WTI's front-month was down 33 cents at $48.08 a barrel, after plumbing a session low at $47.40.
Brent's front-month settled down 37 cents at $48.35, off the day's low of $47.58.
