Market Roundup
- White House piles pressure on China after Trump tariff threat
- U.S. Senate backers of ZTE measure will battle Trump over Chinese firm
- Trump says would back both U.S House immigration bills as separation crisis grows
- Britain's May faces new battle in parliament over Brexit
- Merkel, Macron back euro zone budget in "new chapter" for bloc
- N.Korea, China discuss 'true peace', denuclearisation - KCNA
- China's Xi praises N.Korea's Kim for Trump summit, promises support
- Iran rules out OPEC deal as Russia, Saudi push for oil output hike
- BOJ minutes: One member says more easing needed but central bank seen on hold
- Japan's business mood mixed, underlines fragile recovery-Reuters Tankan
- New Zealand Q2 Westpac Consumer Survey, 108.6, last 111.2
- New Zealand Q1 Current Account-Annual, -7.91 bln, f'cast -8.07 bln, last -7.72 bln
- New Zealand Q1 Current account Balance to GDP, -2.8%, f'cast -2.8%, last -2.7%
Economic Data Ahead
- (0600 ET/1000 GMT) Great Britain Jun CBI Trends-Orders, f'cast 1, last -3
Key Events Ahead
- (0315 ET/0715 GMT) Bundesbank's Joachim Wuermeling speaks on "Financing the EU's Economy" - Frankfurt
- (0330 ET/0730 GMT) Bank of France's Francois Villeroy de Galhau presents annual report on French and eurozone economy - Paris
- (0400 ET/0800 GMT) BaFin President Felix Hufeld speaks at Future Europe conference - Frankfurt
- (0400 ET/0800 GMT) ECB's Sabine Lautenschlager chairs session on "Microeconomics of price and wage-setting" - Sintra
- (0400 ET/0800 GMT) ECB's Ewald Nowotny holds news conference about Austrian National Bank's report on state of country's financial sector - Vienna
- (0630 ET/1030 GMT) ECB's Benoit Coeure chairs panel on "Microeconomics of price and wage-setting" - Sintra
- (0930 ET/1330 GMT) Panel participation RBA's by Philip Lowe at Forum on Central Banking - Sintra, Portugal
- (0930 ET/1330 GMT) Fed's Jerome Powell participates in "Monetary Policy at a Time of Uncertainty and Tight Labor Markets" panel - Sintra
- (0930 ET/1330 GMT) ECB's Mario Draghi speaks at ECB Forum on Central Banking - Sintra
- (0930 ET/1330 GMT) Fed's James Bullard gives presentation on "Macroeconomics of Price and Wage Setting" - Sintra
- (1230 ET/1630 GMT) Deutsche Bundesbank's Joachim Wuermeling speaks on "Brexit means Brexit - But what does that mean for the financial center of Europe?" – Frankfurt N/A Bundesbank's Joachim Wuermeling, BaFin's Felix Hufeld, European Investment Bank's Werner Hoyer, Deutsche Bank's Christian Sewing speak at Maleki group conference - Multiple locations
- N/A Fed's Jerome Powell, ECB's Mario Draghi, BOJ's Haruhiko Kuroda and RBA's Philip Lowe speak at ECB conference on Central Banking - Sintra
- N/A ECB's Peter Praet, SocGen's Bini Smaghi, BaFin's Felix Hufeld, former ECB board members Andreas Dombret, French treasury chief Renaud Basso speak at conference - Paris
FX Beat
DXY: The dollar index touched a fresh 11-month peak after U.S. President Donald Trump threatened to impose more tariffs on China. The greenback against a basket of currencies trades 0.05 percent up at 95.07, having touched a high of 95.30, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at 112.64 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro declined, hovering towards a 3-week low hit in the previous session as European Central Bank President Mario Draghi called for a patient approach to European monetary policy at a forum in Portugal. The European currency traded 0.1 percent down at 1.1578, having touched a low of 1.1531 on Tuesday, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at 41.51 (Neutral) by 0500 GMT. Investors’ attention will remain on ECB Lautenschager, Coeure and Draghi's speech, ahead of U.S. current account and existing home sales. Immediate resistance is located at 1.1650, a break above targets 1.1699 (21-DMA). On the downside, support is seen at 1.1510 (May 29 Low), a break below could drag it till 1.1434 (July 2017 Low).
USD/JPY: The dollar rose above the 110.00 handle after falling to a 1-week low in the prior session on growing concerns over a worsening trade feud between Washington and Beijing. The major was trading 0.2 percent down at 110.21, having hit a low of 109.55 the day before, its lowest since June 11. FxWirePro's Hourly Yen Strength Index stood at 103.75 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. current account and existing home sales. Immediate resistance is located at 110.43 (5-DMA), a break above targets 110.90 (June 15 High). On the downside, support is seen at 109.55 (June 19 Low), a break below could take it lower 109.19 (June 8 Low).
GBP/USD: Sterling consolidated near 7-month lows on market expectations for a less than 40 percent likelihood of the Bank of England hiking interest rates by August and about an 80 percent probability of one more rate hike by the end of 2018. The major traded 0.1 percent down at 1.3168, having hit a low of 1.3151 on Tuesday; it’s lowest since Nov 16. FxWirePro's Hourly Sterling Strength Index stood at -52.35 (Bearish) 0500 GMT. Investors’ attention will remain on the UK CBI Industrial Trends Survey - Orders, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3265 (5-DMA), a break above could take it near 1.3331 (10-DMA). On the downside, support is seen at 1.3130 (Nov.15 Low), a break below targets 1.3110 (Oct. 25 Low). Against the euro, the pound was trading flat at 87.94 pence, having hit a high of 87.17 pence on Friday, it’s highest since May 30.
AUD/USD: The Australian dollar steadied after falling to a 1-year low in the prior session, as concerns over a worsening trade war between U.S. and China ebbed. The Aussie trades 0.3 percent up at 0.7398, having hit a low of 0.7347 on Tuesday; it’s lowest since June 2017. FxWirePro's Hourly Aussie Strength Index stood at -43.00 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7347 (June 19 Low), a break below targets 0.7328 (May 28, 2017, Low). On the upside, resistance is located at 0.7460, a break above could take it near 0.7500.
NZD/USD: The New Zealand dollar held firm above the 0.6900 handle after declining to a 3-week low in the prior session, despite a survey by Westpac Bank showing domestic consumer confidence fell to 108.6 in the second quarter from 111.2 in the previous quarter. The Kiwi trades 0.1 percent up at 0.6907, having touched a low of 0.6885 on Tuesday, its lowest level since May 30. FxWirePro's Hourly Kiwi Strength Index was at -68.17 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6960, a break above could take it near 0.6974 (21-DMA). On the downside, support is seen at 0.6882 (May 30 Low), a break below could drag it below 0.6855
Equities Recap
Asian shares rebounded from 4-month lows touched in the prior session as the prospect of a full-blown trade war between China-U.S. ebbed.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4 percent.
Tokyo's Nikkei surged 1.2 percent to 22,555.43 points, Australia's S&P/ASX 200 index gained 1.2 percent to 6,172.60 points, and South Korea's KOSPI rallied 1.2 percent to 2,367.87 points.
Shanghai composite index rose 0.4 percent to 2,921.18 points, while CSI300 index was trading 0.6 percent up at 3,641.85 points.
Hong Kong’s Hang Seng was trading 1.0 percent higher at 29,764.52 points. Taiwan shares added 0.2 percent to 10,927.44 points.
Commodities Recap
Crude oil prices rose, reversing previous session losses, supported by a drop in U.S. commercial crude inventories and the loss of storage capacity in oil producer Libya. International benchmark Brent crude was trading 0.6 percent up at $75.40 per barrel by 0526 GMT, having hit a low of $72.44 the day before, its lowest since May 2. U.S. West Texas Intermediate was trading 0.5 percent up at $65.06 a barrel, after falling as low as $63.62 on Monday, its lowest since April 10.
Gold prices consolidated within narrow ranges, after declining to a near 6-month low in the previous session, as the dollar hovered close to an 11-month peak. Spot gold traded flat at $1,274.18 an ounce by 0529 GMT, having touched its weakest since December 22 at $1,270.30 an ounce on Tuesday. U.S. gold futures for August delivery were, however, 0.2 percent lower at $1,276.10 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.777 percent higher by 0.007 bps, while 5-year yield was 0.01 bps up at 2.778 percent.
The Australian government slumped as investors risk sentiment revived despite rising tensions between the world’s two-biggest economies of a trade war. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 2-1/2 basis points to 2.638 percent, the yield on the long-term 30-year Note climbed 1-1/2 basis points to 3.143 percent and the yield on short-term 2-year up 5-1/2 basis points to 2.045 percent.
The New Zealand bonds closed Wednesday’s session on a sharply higher note even as the United States counterpart plunged overnight, tracking a trade tussle with China over the imposition of tariffs on aluminium and steel goods. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, jumped 3-1/2 basis points to 2.91 percent, the yield on the long-term 20-year note surged nearly 4 basis points to 3.23 percent and the yield on short-term 2-year closed 1-1/2 basis points higher at 1.90 percent.
The Canadian government bond prices were higher across a flatter yield curve. The two-year rose 5.5 Canadian cents to yield 1.843 percent and the 10-year climbed 36 Canadian cents to yield 2.162 percent. The two-year yield fell 2.1 basis points further below its U.S. equivalent to a spread of -70.6 basis points, its widest since March 2007.
