Market Roundup
- Trump defends Mexico migration deal and pledges more detail
- Japan Q1 GDP Revised QQ, 0.6%, 0.5% f'cast, 0.5% prev
- Japan Q1 GDP Revised QQ Annualised, 2.2%, 2.1% f'cast, 2.1% prev
- China May Exports YY, 1.1%, -3.8% f'cast, -2.7% prev
- China May Imports YY, -8.5%, -3.8% f'cast, 4.0% prev
- China's May trade surplus with U.S. rises to $26.89 bln
- China's May forex reserves rise unexpectedly to $3.101 trln
- China's rare earth exports fall 15.9 percent from April
- G20 finance chiefs express concern over risks from 'intensified' trade conflict
- ECB policymakers open to cut rates if growth weakens: sources
- UK leadership hopefuls launch campaigns to take control of Brexit
- Hong Kong vows to press ahead with extradition bill despite huge protest
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Apr Industrial Output YY WDA, -0.2% f'cast, -1.4% prev
- (0430 ET/0830 GMT) Great Britain Apr GDP Estimate YY, 1.7% f'cast, 1.9% prev
- (0430 ET/0830 GMT) Great Britain Apr GDP Est 3M/3M, 0.4% f'cast, 0.5% prev
- (0430 ET/0830 GMT) Great Britain Apr Industrial Output YY, 1.0% f'cast, 1.3% prev
- (0430 ET/0830 GMT) Great Britain Apr Manufacturing Output YY, 2.1% f'cast, 2.6% prev
- (0430 ET/0830 GMT) Great Britain Apr Goods Trade Balance (GBP), -12.96 bln f'cast, -13.65 bln prev
Key Events Ahead
- (0530 ET/0930 GMT) BoE's Andy Haldane speaks at CogX 2019 "The Festival of Artificial Intelligence and Emerging Technology" in London
- (0700 ET/1100 GMT) Riksbank executive board meeting in Stockholm
- (0815 ET/1215 GMT) Remarks by ECB's Luis de Guindos at IE Business Leadership Forum in Madrid
- (1300 ET/1700 GMT) Member of the Monetary Policy Committee Michael Saunders speaks during regional visit at Southampton Solent University in London
FX Beat
DXY: The dollar index rebounded after falling to a 6-week low in the prior session on data that showed nonfarm payrolls increased by 75,000 jobs in May, much smaller than the 185,000 additions estimated, highlighting the loss of momentum in economic activity was spreading to the labour market. The greenback against a basket of currencies traded 0.2 percent up at 96.77, having touched a low of 96.46 on Friday, its lowest since Mar. 26. FxWirePro's Hourly Dollar Strength Index stood at 12.86 (Neutral) by 0400 GMT.
EUR/USD: The euro eased from a 2-1/2month peak on news that European Central Bank policymakers are open to cutting the ECB's policy rate again if economic growth weakens in the rest of the year. The European currency traded 0.3 percent down at 1.1302, having touched a high of 1.1347 on Friday, its highest since Mar. 22. FxWirePro's Hourly Euro Strength Index stood at 95.74 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on data out of Eurozone economies, ahead of the U.S. JOLTS Job Opening. Immediate resistance is located at 1.1359 (Mar. 18 High), a break above targets 1.1402 (Feb. 16 High). On the downside, support is seen at 1.1263 (Mar. 26 Low), a break below could drag it below 1.1201 (May 14 Low).
USD/JPY: The dollar rallied to a 10-day peak, as risk sentiment improved across the board after the United States and Mexico struck a migration deal late last week to avert a tariff war. The major was trading 0.5 percent up at 108.64, having hit a high of 108.67 on Wednesday, its highest since May 31. FxWirePro's Hourly Yen Strength Index stood at -130.08 (Highly Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S.JOLTS Job Opening. Immediate resistance is located at 108.87 (50.0% retracement of 109.92 and 107.81), a break above targets 109.47 (78.6% retracement). On the downside, support is seen at 107.88 (June 3 Low), a break below could take it lower at 107.51 (Jan. 4 Low).
GBP/USD: Sterling eased after rising to a 2-1/2 week peak in the previous session on weak U.S. jobs data that bolstered the case for a Federal Reserve interest rate cut. The major traded 0.2 percent down at 1.2704, having hit a high of 1.2763 on Friday; it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at -43.66 (Neutral) 0400 GMT. Investors’ attention will remain on UK manufacturing prod., industrial production, trade balance, NIESR GDP estimate and BOE Saunders' speech ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2763 (June 7 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2647 (May 24 Low), a break below targets 1.2580 (May 30 Low). Against the euro, the pound was trading 0.1 percent down at 88.98 pence, having hit a low of 89.02 last week, it’s lowest since Jan. 15.
AUD/USD: The Australian dollar plunged below the 0.7000 handle, after data showed China's imports fell the most in nearly three years in a further sign of weak domestic demand that could prompt Beijing to step up stimulus measures. The Aussie trades 0.4 percent down at 0.6970, having hit a high of 0.7022 on Friday, it’s highest since May 8. FxWirePro's Hourly Aussie Strength Index stood at -129.30 (Highly Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6935 (May 14 Low), a break below targets 0.6881 (May 24 Low). On the upside, resistance is located at 0.7029 (May 2 High), a break above could take it near 0.7061 (May 1 High).
NZD/USD: The New Zealand dollar declined after rising for six straight sessions, weighed down by disappointing monthly import figures from China. Data released earlier in the day showed Chinese imports declined 8.5 percent in May from a year earlier, the most in nearly three years. The Kiwi trades 0.5 percent lower at 0.6631, having touched a high of 0.6681 on Friday, its highest level April 30. FxWirePro's Hourly Kiwi Strength Index was at -47.13 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6694 (Apr. 19 High), a break above could take it near 0.6729 (Apr. 18 High). On the downside, support is seen at 0.6588 (May 7 Low), a break below could drag it below 0.6513 (May 17 Low).
Equities Recap
Asian shares surged after the United States dropped its threat to impose tariffs on Mexico in a deal to combat illegal migration from Central America.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 percent.
Tokyo's Nikkei rallied 1.2 percent to 21,134.42 points, and South Korea's KOSPI rose 1.3 percent to 2,099.49 points.
Shanghai composite index rose 0.9 percent to 2,852.06 points, while CSI 300 index traded 1.3 percent up at 3,610.74 points.
Hong Kong’s Hang Seng traded 2.4 percent higher at 27,546.74 points. Taiwan shares added 1.5 percent to 10,566.47 points
Commodities Recap
Crude oil prices surged after Saudi Arabia said producer cartel OPEC and Russia should keep supplies restricted at current levels. International benchmark Brent crude was trading 0.5 percent higher at $63.67 per barrel by 0509 GMT, having hit a low of $59.42 on Wednesday, its lowest since Jan. 28. U.S. West Texas Intermediate was trading 0.5 percent up at $54.30 a barrel, after falling as low as $50.59 on Wednesday, its lowest since the Feb. 12.
Gold prices retreated from a 14-month peak after an agreement between the United States and Mexico to avert a tariff war dented safe-haven demand. Spot gold was 0.9 percent down at $1,327.86 per ounce by 0534 GMT, having touched a high of $1,348.13 on Friday, its highest since April 19. U.S. gold futures fell 0.9 percent to $1333.70 an ounce.
Treasuries Recap
The Japanese government bond prices rose, with 40-year bond yields falling to their lowest since mid-2016. The benchmark 10-year JGB yield shed one basis point to minus 0.130 percent. The 20-year yield dropped two basis points to 0.24 percent, while the 40-year yield dipped 2.5 basis points to 0.415 percent. The five-year yield dropped 0.5 basis point to minus 0.235 percent.
