Market Roundup
- China May industrial profits rise 16.7% to 625.99 bln yuan
- Free trade curbs could lead to unfair trade practices -China's Li
- Trump urges Modi to fix deficit but stresses strong ties
- U.S. Supreme Court revives parts of Trump travel ban
- U.S. healthcare bill imperiled with 22 mln seen losing insurance
- Carney in driving seat in BoE rate tussle
- Brazil's President Michel Temer charged with taking bribes
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Jun Mfg Business Confidence, 106.70 eyed, last 106.90
- (0400 ET/0800 GMT) Italy Jun Consumer Confidence, 106.20 eyed, last 105.40
- (0600 ET/1000 GMT) Great Britain Jun CBI distributive trades, 2 eyed, last 2
Key Events Ahead
- (0300 ET/0700 GMT) Meeting of the executive board of the Riksbank
- (0500 ET/0900 GMT) Speech by Draghi on central banking in Portugal
- (0500 ET/0900 GMT) Italy E2.5/0.5/0.5 bln 2/5/15 YI auctions
- (0530 ET/0930 GMT) Germany 2Y 4.0 bln auction
- (0530 ET/0930 GMT) UK 9YI 1.0 bln auction
- (0530 ET/0930 GMT) ECB's Benoit Coeure chairing a Session in Portugal
- (1300 ET/1700 GMT) Yellen participates in "Global Economic Issues" conversation
- N/A ECB's Peter Praet chairing a panel in Portugal
- N/A Bank of England to publish financial stability report
FX Beat
DXY: The dollar rose to a 1-month high versus the Japanese yen, as investors expect comments from Federal Reserve Chair Janet Yellen to support the Fed's forecast for one more interest rate hike this year. The greenback against a basket of currencies traded down at 97.36, having touched a low of 97.11 the day before, it’s lowest since June 19. FxWirePro's Hourly Dollar Strength Index stood at -57.99 (Bearish) by 0500 GMT.
EUR/USD: The euro gained after tumbling in the previous session as European Central Bank President Draghi slashed expectations of QE taper. The European currency traded 0.2 percent up at 1.1201, having touched a high of 1.1219 on Monday, its highest since June 15. FxWirePro's Hourly Euro Strength Index stood at 58.16 (Bullish) by 0400 GMT. Investors’ attention will remain on ECB President Draghi's speech, ahead of highly influential Federal Reserve Chair Janet Yellen's speech for further clues on the pair. Immediate resistance is located at 1.1219 (Previous Session High), a break above targets 1.1236 (June 9 High). On the downside, support is seen at 1.1176 (10-DMA), a break below could drag it near 1.1132 (June 15 Low).
USD/JPY: The dollar rallied to a 1-month high as investors waited to see if Federal Reserve Chair Janet Yellen would reiterate her hawkish stance. The major traded flat at 111.84, having hit a high of 112.07 earlier, its highest since May 24. FxWirePro's Hourly Yen Strength Index stood at -120.70 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of Fed Chair Yellen's speech. Immediate resistance is located at 112.50, a break above targets 113.00. On the downside, support is seen at 111.44 (5-DMA), a break below could take it near 111.01 (10-DMA).
GBP/USD: Sterling rose after declining from a 1-week high in the previous session as investors remain wary over the outcome of the BoE FSR report on the financial markets due to release later in the day. The major rallied on Monday after the UK May’s Conservatives Party struck a deal with the DUP to form a minority government. Sterling traded 0.1 percent up at 1.2737, having hit a high of 1.2759 the day before, its highest since June 19. FxWirePro's Hourly Sterling Strength Index stood at 82.60 (Slightly Bullish) by 0400 GMT. Investors’ focus will remain on the BoE FSR and Carney’s speech, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.2764 (23.6% retrace of 1.2817 and 1.2589), a break above could take it near 1.2818 (June 14 High). On the downside, support is seen at 1.2684 (5-DMA), a break below targets 1.2654 (June 22 Low). Against the euro, the pound traded flat at 87.90 pence, having hit a 1-week low of 88.45 last week.
AUD/USD: The Australian dollar rallied to a 1-week high as a steady recovery in oil prices and broad-based U.S. dollar softness supported the upside in the major. The Aussie trades 0.2 percent up at 0.7599, having hit a high of 0.7603 earlier, it’s strongest since June 20. FxWirePro's Hourly Aussie Strength Index stood at 72.37 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7564 (-DMA), a break below targets 0.7535 (June 22 Low). On the upside, resistance is located at 0.7620, a break above could take it near 0.7635 (June 14 High).
NZD/USD: The New Zealand dollar rose, extending gains for the fourth consecutive session, as New Zealand posted a monthly trade surplus of NZ$103.00 million in May, while the annual deficit was NZ$3.75 billion. The Kiwi trades 0.2 percent up at 0.7300, having touched a peak of 0.7319 earlier in the month, its strongest level since Feb. 8. FxWirePro's Hourly Kiwi Strength Index was at 151.84 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7320, a break above could take it near 0.7350. On the downside, support is seen at 0.7258 (5-DMA), a break below could drag it till 0.7171 (June 12 Low).
Equities Recap
Asian shares traded flat, while the dollar strengthened ahead of Federal Reserve Chair Janet Yellen and a number of other Fed officials' speeches due later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed.
Tokyo's Nikkei edged up 0.4 percent to 20,229.95 points, Australia's S&P/ASX 200 index eased 0.08 percent to 5,715.40 points and South Korea's KOSPI climbed 0.2 percent to 2,392.55 points.
Shanghai composite index fell 0.2 percent to 3,179.10 points, while CSI300 index was trading 0.3 percent down at 3,656.50 points.
Hong Kong’s Hang Seng was trading 0.2 percent lower at 25,819.70 points. Taiwan shares shed 0.02 percent to 10,512.06 points.
Commodities Recap
Crude oil prices rose for a fourth straight session as investors covered short positions, however, concerns over a supply glut capped the upside. International benchmark Brent crude was trading 0.1 percent up at $45.95 per barrel by 0425 GMT, having hit a low of $44.34 on Wednesday, its weakest since Nov. 14. U.S. West Texas Intermediate traded 0.1 percent up at $43.47 a barrel, after falling as low as $42.03 on Wednesday, its lowest since Nov 8.
Gold edged up after tumbling to a near 6-week low in the previous session on a firmer dollar ahead of a speech by Federal Reserve Chair Janet Yellen, which may give clues on the pace of possible U.S. interest rate hikes. Spot gold rose 0.1 percent to $1,244.81 per ounce by 0428 GMT, having hit a low of $1,235.26 on Monday, its lowest since May 16. U.S. gold futures for August delivery dropped 0.3 percent to $1,241.90 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.135 percent lower by 0.002 bps, while 5-year yield was 0.002 down at 1.756 percent.
The Australian bonds remained upbeat in a thin trading activity that witnessed data of little economic significance and as the country’s weekly consumer confidence edged slightly lower for the second straight week in a row. The yield on the benchmark 10-year Treasury note plunged nearly 2 basis points to 2.37 percent, the yield on 15-year note slumped close to 3 basis points to 2.72 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.66 percent.
The New Zealand bonds closed slightly on the upside after witnessing a softer trade surplus for the month of May, undershooting market expectations, released earlier today. At the time of closing, the yield on the benchmark 10-year bond slumped 1-1/2 basis points to 2.78 percent, the yield on 7-year note also slipped 1-1/2 basis points to 2.69 percent and the yield on short-term 2-year note traded flat at 1.99 percent.
The Canadian government bond prices were mixed across the yield curve in sympathy with U.S. Treasuries. The two-year was down 1 Canadian cent to yield 0.903 percent and the 10-year rose 12 Canadian cents to yield 1.463 percent.
