Market Roundup
- Fed set to raise interest rates, give detail on bal sheet winddown
- U.S. Treasury unveils financial reforms, critics attack
- North Korea 'most urgent' threat to security -Mattis
- Slowdown in BOJ's bond buying a result of stable yields - official
- BOJ: Less pressure from US rates allowing BoJ to slow JGB buys
- BOJ to keep pursuing steps for price stability
- China regulators release draft rules on planned 'Bond Connect'
- Australia May business confidence, 7 vs last 13 -NAB
- Australia May business conditions, 12 vs last 14 -NAB
Economic Data Ahead
- (0300 ET/0700 GMT) Spain May HICP, +2.0% y/y, +0.0% m/m eyed; last +2.0%, +0.9%
- (0300 ET/0700 GMT) Spain May CPI, -0.1% m/m, +1.9% y/y eyed; last +1.0%, +2.6%
- (0430 ET/0830 GMT) Great Britain May Core CPI, +0.1% m/m, +2.4% y/y eyed; last +0.5%, +2.4%
- (0430 ET/0830 GMT) Great Britain May CPI, +0.2% m/m, +2.7% y/y eyed; last +0.5%, +2.7%
- (0500 ET/0900 GMT) Germany Jun ZEW Economic Sentiment, 21.5 eyed; last 20.6
Key Events Ahead
- N/A German finmin Wolfgang Schaeuble speaks on global economy
- N/A Bundesbank President Weidmann speaks in Berlin
- N/A Riksbank's Ingves participates in an open hearing on financial stability
- 10:00 ECB's Lautenschlager participates in a conference
- (0400 ET/0800 GMT) Netherlands 10Y E2.500 bln auction
- (0500 ET/0900 GMT) Italy 3Y E2.500 bln auction
- (0500 ET/0900 GMT) Italy 7Y E3.000 bln auction
- (1020 ET/1420 GMT) BoE's Cleland participates in the ATM & Cash Innovation Europe 2017
- (1050 ET/1450 GMT) BoE's Gerken speaks at Operational Risk Europe 2017
FX Beat
DXY: The dollar gained versus most of its major peers as investors focus shifted on the U.S. Federal Reserve's two-day policy meeting. The greenback against a basket of currencies traded 0.1 percent up at 97.27, having touched a high of 97.50 on Friday, it’s highest since May 31. FxWirePro's Hourly Dollar Strength Index stood at 11.70 (Neutral) by 0500 GMT.
EUR/USD: The euro declined, extending losses for the sixth consecutive session, as the greenback steadied ahead of a two-day U.S. Federal Reserve meeting that is likely to provide hints on the central bank's interest rate policy for the remainder of the year. The European currency traded 0.1 percent down at 1.1192, having touched a low of 1.1166 last week, its lowest since May 31. FxWirePro's Hourly Euro Strength Index stood at -110.52 (Highly Bearish) by 0400 GMT. Investors’ attention will remain on ZEW Survey – Eurozone Economic Sentiment, ahead of the U.S. producer price index for further clues on the major. Immediate resistance is located at 1.1229 (5-DMA), a break above targets 1.1300. On the downside, support is seen at 1.1166 (June 9 Low), a break below could drag it near 1.1100.
USD/JPY: The dollar edged up, reversing some of its previous session losses, as investors' focus shifted on Federal Reserve meeting, where the central bank is widely expected to raise interest rates and provide fresh hints on the pace of further tightening in the months to come. The major traded flat at 109.98, having touched a high of 110.80 on Friday, its highest since Jun. 2. FxWirePro's Hourly Yen Strength Index stood at 66.42 (Bullish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. producer price index due later in the day. Immediate resistance is located at 110.25 (61.8% retracement of 112.12 and 109.11), a break above targets 110.96 (38.2% retrace). On the downside, support is seen at 109.63 (Previous Session Low), a break below could take it near 109.38 (June 8 Low).
GBP/USD: Sterling declined, extending losses for the fourth straight session, as investors worried a period of political uncertainty would further weaken the economy before the launch of talks on leaving the European Union next week. Sterling traded down at 1.2656, having hit a low of on Friday, its weakest since Apr 18. FxWirePro's Hourly Sterling Strength Index stood at -104.73 (Highly Bearish) by 0400 GMT. Investors’ focus now shifts on UK consumer price index and core inflation figures, ahead of the FOMC and BoE monetary policy decisions scheduled later this week. Immediate resistance is located at 1.2709 (78.6% retrace of 1.2977 and 1.2365), a break above could take it near 1.2766 (61.8% retrace). On the downside, support is seen at 1.2635, a break below targets 1.2600. Against the euro, the pound traded up at 88.43 pence, having hit a 7-month low of 88.66 on Monday.
AUD/USD: The Australian dollar rose towards multi-week highs after National Australia Bank data showed the economy's business conditions eased just a touch from decade highs in May with growth reported across all sectors. The Aussie trades 0.2 percent up at 0.7554, hovering towards a high of 0.7566 hit on Wednesday, it’s strongest since Apr 25. FxWirePro's Hourly Aussie Strength Index stood at 36.09 (Neutral) by 0500 GMT. Investors will continue to digest domestic data, ahead of U.S. economic releases. Immediate support is seen at 0.7521 (Previous Session Low), a break below targets 0.7499 (June 7 Low). On the upside, resistance is located at 0.7570, a break above could take it near 0.7586 (Apr 24 High).
NZD/USD: The New Zealand dollar rallied to a 3-1/2 month high as investors awaited for New Zealand's current account balance on Wednesday and first-quarter gross domestic product data on Thursday. The Kiwi trades 0.4 percent up at 0.7225, having touched a peak of 0.7227 earlier, its strongest level since Feb. 28. FxWirePro's Hourly Kiwi Strength Index was at 47.07 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7250, a break above could take it near 0.7300. On the downside, support is seen at 0.7175 (78.6% retracements of 0.6988 and 0.7227), a break below could drag it till 0.7135 (61.8 retrace).
Equities Recap
Asian shares rebounded despite a further slide in U.S. technology stocks, while the greenback steadied ahead of this week's Federal Reserve policy meeting that could provide further clues on the U.S. monetary outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent.
Tokyo's Nikkei declined 0.03 percent to 19,903.90 points, Australia's S&P/ASX 200 index surged 1.4 percent to 5,759.00 points and South Korea's KOSPI gained 0.5 percent to 2,371.06 points.
Shanghai composite index rose 0.3 percent to 3,148.49 points, while CSI300 index was trading 0.04 percent up at 3,575.68 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 25,790.35 points. Taiwan shares added 0.2 percent to 10,128.15 points.
Commodities Recap
Crude oil prices edged up, strengthened by statements that Saudi Arabia was making significant supply cuts to customers, however, rising U.S. output meant that markets still remained oversupplied. International benchmark Brent crude was trading 0.5 percent up at $48.48 per barrel by 0413 GMT, having hit a low of $47.41 on Monday, its weakest since May 5. U.S. West Texas Intermediate traded 0.6 percent up at $46.24 a barrel, after falling as low as $45.19 on Thursday, its lowest since May 5.
Gold prices nudged up after falling to an over 1-week low earlier as investors awaited a two-day Federal Reserve meeting that is likely to provide hints on the U.S. central bank's interest rate policy for the remainder of the year. Spot gold was trading 0.1 percent at $1,266.31 per ounce at 0417 GMT, having hit a low of $1,262.61 an ounce, its lowest since Jun. 2. U.S. gold futures for August delivery fell 0.2 percent to $1,266.9 per ounce
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.144 percent higher by 0.001 bps, while 5-year yield was 0.001 bps up at 1.778 percent.
The Australian bonds gained tracking firmness in the U.S. Treasuries and as investors wait to watch the country’s employment report for the month of May, scheduled to be released on June 15. The yield on the benchmark 10-year Treasury note fell 1 basis point to 2.40 percent, the yield on 15-year note slumped 1-1/2 basis points to 2.78 percent while the yield on short-term 2-year traded flat at 1.62 percent.
The New Zealand bonds ended on a mixed tone in a silent trading session that witnessed no data of economic significance. Also, investors are eyeing the country’s first-quarter gross domestic product (GDP), scheduled to be released on June 15. At the time of closing, the yield on the benchmark 10-year bond jumped 2 basis points to 2.80 percent, the yield on 7-year note slipped 1 basis point to 2.69 percent while the yield on short-term 2-year note ended 1 basis point higher at 1.96 percent.
The Canadian government bond prices fell across the yield curve, with the two-year down 19.5 Canadian cents to yield 0.844 percent, and the 10-year falling 57 Canadian cents to yield 1.488 percent. The yield on the 2-year hit its highest since March while the 10-year touched a more than two-week high.
