Market Roundup
• US NY Fed Manufacturing -1.0 vs 7.0 forecast, 5.20 previous.
• US NAHB Housing Market Index 70 vs 68 forecasts, 68 previous.
• Pimco reduces 2017 year-end core US inflation forecast to 2.0 pct from 2.3 pct following April CPI data.
• Oil prices surged after major producers Saudi Arabia and Russia said they would extend oil supply cuts into 2018.
• N.Korea vows missile tests "anytime, any place," says U.S. territory "within sighting range for strike".
• IMF: a sustained rise in German wage and price inflation is needed to help lift euro zone inflation and facilitate normalisation of monetary policy.
• Brazil economy shrinks in March, but returns to positive for Q1 -central bank.
• China's new Silk Road promises trade and riches, with President Xi at the helm.
• Macron: Europe should not be naive on free trade and protect its companies against social dumping.
• Cyber security experts said the spread of the WannaCry "ransomware" cyberattack had slowed but fears new versions of the worm will strike.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Machinery Orders MM Mar 2.1% forecast, 1.5% previous
• 23:50 Japan Machinery Orders YY Mar 0.6% forecast, 5.6% previous
• 01:30 Australia New Motor Vehicle Sales Apr 1.9% previous
Looking Ahead - Events, Other Releases (GMT)
• 01:30 Australia- RBS May Rate Meeting Minutes
Currency Summaries
EUR/USD is likely to find support at 1.0915 levels and currently trading at 1.0978 levels. The pair has made session high at 1.0988 and hit lows at 1.0963 levels. Euro rose against the dollar on Monday after a weak U.S. manufacturing report compounded a bounce in commodities prices that drove the greenback lower. The New York Federal Reserve's barometer on business activity in the state unexpectedly fell in May, sinking into negative territory for the first time since October. It came after weaker-than-expected U.S. consumer inflation data for April on Friday diminished the view that the Federal Reserve would raise interest rates more than once for the rest of the year. The Consumer Price Index grew 2.2 percent on a 12-month basis through April, slower than March's 2.4 percent gain. This raised concerns the core rate of personal consumption expenditure would take longer than previously thought for inflation to reach the Fed's 2-percent goal. The euro rose to a one-week high of $1.0989 against the dollar after the data, while the dollar index, tracking the currency against a basket of other major units, fell 0.34 percent.
GBP/USD is supported in the range of 1.2860 levels and currently trading at 1.2894 levels. It reached session high at 1.2921 and dropped to session low at 1.2879 levels. Sterling declined against the dollar on Monday as sterling as came under selling interest as investors were cautious about increasing bets on the sterling before getting fresh clues on Brexit negotiations. Also, threats of a ransomware attack that locked up more than 200,000 computers in more than 150 countries, and a missile test by North Korea kept the pound lower against the greenback in quiet trading on Monday. The dollar started the week on the defensive on Monday with the dollar index, which measures the greenback's value versus euro, yen and four other major currencies, easing about 0.2 percent. The overwhelmingly negative view on the pound dominating foreign exchange markets since the Brexit referendum in June last year has abated since British prime minister Theresa May called a snap general election a month ago. The latest poll on Monday from Survation showed that May's ruling Conservative Party is on course to win 48 percent of the vote on June 8, with labour a distant second on 30 percent.
USD/CAD is supported at 1.3594 levels and is trading at 1.3636 levels. It has made session high at 1.3667 and lows at 1.3600 levels. The Canadian dollar hit its highest level in over two weeks against its U.S. counterpart on Monday as oil rose and weaker dollar boosted commodity related Canadian dollar. Oil prices jumped around 2 percent, with Brent crude hitting $52 per barrel after Saudi Energy Minister Khalid al-Falih and his Russian counterpart Alexander Novak said a joint deal to cut crude supplies would be extended from the middle of this year until the end of March 2018. On the data front, Canadian home re-sales fell in April as a government move to cool the long housing boom sent buyers to the sidelines and sparked a spike of new listings, the Canadian Real Estate Association said on Monday. Sales dropped 1.7 percent in April from March's record level while listings rose 10 percent, the industry group said. Prices, which take longer to adjust, were up 19.8 percent from a year ago, according to the group's home price index. The Canadian dollar was trading at C$1.3635 to the greenback up 0.6 percent.
NZD/USD is supported around 0.6850 levels and currently trading at 0.6878 levels. It hit session high at 0.6916 and made session lows at 0.6871 levels. The New Zealand dollar got a bit of its mojo back against the dollar on Monday as some commodity prices firmed and upbeat retail sales data boosted kiwi, but some of early gains eased on profit-taking. Retail sales volumes rose a seasonally adjusted 1.5 percent in the three months to end-March, data from Statistics New Zealand showed, handily topping analysts' expectations of a 0.9 percent rise. The result gave some optimism to investors who are cautiously waiting for Reserve Bank of New Zealand (RBNZ) Governor John McDermott to give a speech at (0500 GMT) on its economic forecasts. The central bank surprised markets at its policy meeting last week, adopting a more dovish tone than expected and warning that New Zealand's strong economic indicators, particularly inflation, might not have as much momentum as economists and markets thought. The New Zealand dollar rose to $0.6916 from around $0.6853 before retreating towards 0.6870 on profit taking.
Equities Recap
European shares edged higher on Monday, helped by a bounce in oil prices and fresh deal making activity, while a global hacking attack boosted shares of software security firms.
UK's benchmark FTSE 100 closed up 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.01 percent, Germany's Dax ended up 0.2 percent, France’s CAC finished the day up by 0.1 percent.
The S&P 500 and Nasdaq hit records on Monday as technology stocks rallied after a global cyber-attack and strong corporate earnings.
Dow Jones closed up by 0.41 percent, S&P 500 ended up by 0.47 percent, Nasdaq finished the day up by 0.44 percent.
Treasuries Recap
U.S. Treasury yields drifted higher on Monday as investors evaluated how many times the Federal Reserve was likely to raise rates this year, with no large economic releases due this week to sway opinion.
The 10-year notes fell 3/32 in price to yield 2.34 percent, up from 2.33 percent late on Friday.
Commodities Recap
Oil jumped 2 percent to its highest in more than three weeks on Monday, topping $52 a barrel after Saudi Arabia and Russia said that supply cuts need to last into 2018, a step towards extending an OPEC-led deal to support prices for longer than first agreed.
Global benchmark Brent crude settled up 98 cents, or 1.9 percent, at $51.82 a barrel, having touched $52.63, the highest since April 21. U.S. crude ended $1.01 firmer at $48.85 a barrel, a 2.1 percent gain.
Gold rose as U.S. political turmoil, a missile test by North Korea and a worldwide cyber attack fueled demand for safe-haven assets, while weaker than expected U.S. data pushed the dollar lower, making gold cheaper for holders of other currencies.
Spot gold was up 0.2 percent at $1,230.15 an ounce by 2:11 p.m. EDT (1811 GMT), on track for a third day of gains after hitting an eight-week low of $1,213.81 last week. U.S. gold futures settled up 0.2 percent at $1,230.
