Market Roundup
- BOJ PB June 15-16 min -Optimistic on econ but CPI lagging, even-keel good
- Premature to talk about exit at this time
- Japan May CSPI -0.1% m/m, +0.7% y/y to 103.7
- Takata files for bankruptcy, Toshiba demoted to TSE 2nd section
- Some UK ministers want Hammond as caretaker PM -Sunday Times
- UK's Davis "pretty sure" he'll get good deal to leave EU
- Italy winds up Veneto banks at cost of up to 17 bln euros
- EZ lenders dampen global banking recovery decade after crisis -BIS
- Central banks should begin process of normalisation -BIS
- CFTC data -Specs up USD long bets latest week
- New Zealand construction boom 13% of economy in Q1 2017
Economic Data Ahead
- (0400 ET/0800 GMT) Germany Jun Ifo Business Climate, 114.40 eyed, last 114.60
- (0400 ET/0800 GMT) Germany Jun Ifo Current Conditions, 123.30 eyed, last 123.20
- (0400 ET/0800 GMT) Germany Jun Ifo Expectations, 106.40 eyed, last 106.50
Key Events Ahead
- (1630 ET/2030 GMT) Head of Communications, Board Sec. Mike Hannah speaks in Wellington
- N/A ECB Draghi speaks in Lisbon and Sintra
FX Beat
DXY: The dollar declined versus most of its major peers as U.S. Treasury yields stayed low amid easing expectations that the U.S. central bank will hike interest rates again later this year. The greenback against a basket of currencies traded down at 97.27, having touched a high of 97.87 last week, it’s highest since May 19. FxWirePro's Hourly Dollar Strength Index stood at 5.90 (Neutral) by 0500 GMT.
EUR/USD: The euro consolidated within a narrow range after rising to a 4-day high in the previous session, as investors refrained from taking big positions ahead of the German IFO data. The European currency traded flat at 1.1192, having touched a high of 1.1208 on Friday, its highest since June 19. FxWirePro's Hourly Euro Strength Index stood at -3.75 (Neutral) by 0400 GMT. Investors’ attention will remain on German IFO data, ahead of crucial U.S. durable goods orders and Chicago Fed National Activity index for further clues on the pair. Immediate resistance is located at 1.1208 (Previous Session High), a break above targets 1.1228 (June 15 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 rebounded after tumbling for four consecutive sessions amid improvement in overall market risk-sentiment. However, fading expectations that the Federal Reserve will hike interest rates again later this year limited upside. The major traded up at 111.31, having hit a low of 110.95 last week, its lowest since June 19. FxWirePro's Hourly Yen Strength Index stood at -50.82 (Bearish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. durable goods orders, Dallas Fed manufacturing Business Index and Chicago Fed National Activity index. Immediate resistance is located at 111.50, a break above targets 111.95 (May 25 High). On the downside, support is seen at 110.82 (10-DMA), a break below could take it near 110.67 (21-DMA).
GBP/USD: Sterling advanced, extending gains for the fourth straight session, benefiting from a survey conducted by Lloyds, which indicated that Business confidence in the UK rose to an 18-month high of 24 percent, while comments by the UK’s Brexit Minister Davis also supported to the ongoing strength in major. Sterling traded 0.2 percent up at 1.2740, having hit a high of 1.2754 earlier, its highest since June 20. FxWirePro's Hourly Sterling Strength Index stood at 4.30 (Neutral) by 0400 GMT. Investors’ focus will remain on developments surrounding Brexit negotiations, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.2785 (50.0% retrace of 1.2978 and 1.2589), a break above could take it near 1.2830 (38.2% retrace). On the downside, support is seen at 1.2712 (10-DMA), a break below targets 1.2687 (5-DMA). Against the euro, the pound traded 0.2 percent up at 87.83 pence, having hit a 1-week low of 88.45 last week.
AUD/USD: The Australian dollar rebounded from recent lows as the U.S. dollar eased versus most of its major peers in early Asia trade. The Aussie trades 0.1 percent up at 0.7577, having hit a low of 0.7535 on Thursday, it’s weakest since June 14. FxWirePro's Hourly Aussie Strength Index stood at -107.00 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7535 (June 22 Low), a break below targets 0.7519 (June 9). On the upside, resistance is located at 0.7600, a break above could take it near 0.7635 (June 14 High).
NZD/USD: The New Zealand dollar hovered near recent highs, after RBNZ held official cash rates at record lows last week but sounded less dovish than many investors had initially expected. The Kiwi trades 0.01 percent up at 0.7280, 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 123.35 (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 0.7300, a break above could take it near 0.7350. On the downside, support is seen at 0.7246 (5-DMA), a break below could drag it till 0.7171 (June 12 Low).
Equities Recap
Asian shares gained on growing optimism about global growth, while the dollar eased as a subdued U.S. inflation outlook raised doubts about the Federal Reserve's plans to tighten policy.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent.
Tokyo's Nikkei edged up 0.1 percent to 20,155.15 points, Australia's S&P/ASX 200 index gained 0.05 percent to 5,718.70 points and South Korea's KOSPI climbed 0.5 percent to 2,389.86 points.
Shanghai composite index rose 0.8 percent to 3,183.11 points, while CSI300 index was trading 1.2 percent up at 3,666.38 points.
Hong Kong’s Hang Seng was trading 0.5 percent higher at 25,805.17 points. Taiwan shares added 1.3 percent to 10,513.96 points.
Commodities Recap
Crude oil prices rose, extending gains for the third straight session, however, another rise in U.S. drilling activity fuelled worries that a global supply glut will persist despite an OPEC-led effort to reduce output. International benchmark Brent crude was trading 0.8 percent up at $46.06 per barrel by 0437 GMT, having hit a low of $44.34 on Wednesday, its weakest since Nov. 14. U.S. West Texas Intermediate traded 0.8 percent up at $43.49 a barrel, after falling as low as $42.03 on Wednesday, its lowest since Nov 8.
Gold prices eased, halting its 4-day winning streak, as the market waited for a series of key U.S. economic data this week. Spot gold was trading 0.2 percent down at $1,254.12 per ounce at 0440 GMT, but within the reach of a one-week high of $1258.73 hit on Friday. U.S. gold futures for August delivery rose 0.04 percent to $1,256.80 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.152 percent higher by 0.009 bps, while 5-year yield was 0.011 up at 1.768 percent.
The Australian bonds remained flat at the start of the week as investors remain sidelined in any major trading activity amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note hovered around 2.38 percent, the yield on 15-year note traded flat at 2.74 percent and the yield on short-term 2-year traded 1 basis point also remained steady at 1.67 percent.
The New Zealand bonds closed Monday’s session on a tad higher note as investors wait to watch the country’s trade balance data, for the month of May, scheduled to be released on June 27. 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.
