Market Roundup
- After Trump's spending demands, NATO summit turns to Afghanistan
- Setting out vision for future ties, Britain's May presses Brexit plans
- Trade and tea with queen for Trump in a Britain in "turmoil"
- France to ease finance, tax rules to attract Brexit bankers
- Australia prepares to ban Huawei from 5G project over security fears
- Japan w/e 7 Jul Foreign Bond Investment, 817.9 bln, -293.4 bln last
Economic Data Ahead
- (0500 ET/0900 GMT) EU May Industrial Production, 1.2% m/m, 2.1% y/y f'cast; -0.9%, 1.7% last
Key Events Ahead
- N/A ECB President Mario Draghi and ECB Board Member Benoit Coeure participate in Eurogroup meeting in Brussels
- (0300 ET/0700 GMT) German FinMin Olaf Scholz speaks at the European Parliament about his plans to reform the euro zone in Brussels
- (0330 ET/0730 GMT) Swedish Central Bank minutes from the monetary policy will be published
- (0730 ET/1130 GMT) The European Central Bank publishes the accounts of its policy meeting of June 13-14 in Frankfurt
- (1215 ET/1615 GMT) Philadelphia Fed President Patrick Harker speaks before the Global Interdependence Center Tenth Annual Rocky Mountain Economic Summit
FX Beat
DXY: The dollar index consolidated with narrow ranges, after rising to a 1-week peak earlier as the U.S. inflation data is likely to reaffirm expectations that the Federal Reserve will hike interest rates two more times this year. The greenback against a basket of currencies trades 0.05 percent up at 94.69, having touched a high of 94.79, its highest since July 3. FxWirePro's Hourly Dollar Strength Index stood at 45.63 (Neutral) by 0500 GMT.
EUR/USD: The euro steadied after falling in the previous session as the European Central Bank policymakers remained split over on when the ECB might raise interest rates next year. The European currency traded 0.1 percent up at 1.1682, having touched a high of 1.1790 on Monday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at -12.10 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone industrial production and ECB monetary policy meeting accounts, ahead of U.S. unemployment benefit claims consumer price index, ad monthly budget statement. Immediate resistance is located at 1.1720 (5-DMA), a break above targets 1.1801 (June 13 High),. On the downside, support is seen at 1.1630 (July 4 Low), a break below could drag it till 1.16300.
USD/JPY: The dollar rallied to a 6-month peak above the 112.00 handle as investors awaited the U.S. CPI figures, which are expected to have risen 2.9 percent year-on-year in June, while core CPI has likely risen to 2.3 percent year-on-year from the previous month's print of 2.2 percent. The major was trading 0.2 percent up at 112.27, having hit a high of 112.38 earlier, its highest since Jan 10. FxWirePro's Hourly Yen Strength Index stood at -74.46 (Bearish) by 0600 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims consumer price index, ad monthly budget statement. Immediate resistance is located at 112.60 (Jan 3 High), a break above targets 113.07 (Dec 19 High). On the downside, support is seen at 110.97 (5-DMA), a break below could take it lower 110.28 (July 4 Low).
GBP/USD: Sterling eased, extending previous session losses, as investors were wary of taking large bets before more clarity on the Brexit negotiations emerged. The major traded 0.05 percent down at 1.3200, having hit a high of 1.3362 on Monday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at 46.93 (Neutral) 0500 GMT. Investors’ attention will remain on BoE Credit conditions survey, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3362 (June 1 High), a break above could take it near 1.3389 (June 13 High). On the downside, support is seen at 1.3170 (July 4 Low), a break below targets 1.3146 (June 20). Against the euro, the pound was trading 0.1 percent down at 88.46 pence, having hit a low of 89.00 pence on Monday, it’s lowest since March 9.
AUD/USD: The Australian dollar steadied after falling to a 1-week low earlier in the day, as the greenback surged across the board, bolstered by renewed trade war fears. The Aussie trades 0.2 percent up at 0.7377, having hit a high of 0.7483 on Tuesday; it’s highest since June 14. FxWirePro's Hourly Aussie Strength Index stood at -21.19 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7345, a break below targets 0.7300. On the upside, resistance is located at 0.7409 (21-DMA), a break above could take it near 0.7444 (July 6 High).
NZD/USD: The New Zealand dollar rebounded after falling to a 1-week low earlier, amid nervousness in broader currency markets over an escalation in the U.S.-China trade war. The Kiwi trades 0.1 percent up at 0.6761, having touched a high of 0.6858 on Monday, its highest level since June 27. FxWirePro's Hourly Kiwi Strength Index was at 45.63 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6811 (5-DMA), a break above could take it near 0.6846 (21-DMA). On the downside, support is seen at 0.6736 (June 29 Low), a break below could drag it below 0.6700.
Equities Recap
Asian shares rebounded as markets tried to recover from the previous session's steep losses amid fears of an escalation in the U.S.-China trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent.
Tokyo's Nikkei rallied 1.2 percent to 22,187.96 points, Australia's S&P/ASX 200 index surged 0.8 percent to 6,268.30 points, and South Korea's KOSPI advanced 0.5 percent to 2,290.87 points.
Shanghai composite index rose 2.3 percent to 2,840.36 points, while CSI300 index was trading 2.3 percent up at 3,487.29 points.
Hong Kong’s Hang Seng was trading 0.9 percent higher at 28,585.01 points. Taiwan shares shed 0.6 percent to 10,738.38 points.
Commodities Recap
Crude oil prices rose, regaining some ground after its biggest 1-day drop in two years in the previous session on news that Libya would resume oil exports and U.S.-China trade tensions. International benchmark Brent crude was trading 0.6 percent up at $74.46 per barrel by 0505 GMT, having hit a low of $73.08 on Wednesday, its lowest since June 21. U.S. West Texas Intermediate was trading 0.3 percent higher at $70.81 a barrel, after rising as low as $70.41 on Wednesday, its lowest since June 26.
Gold prices rose, recovering from a 1-week low hit in the previous session, as the dollar held firm amid an intensifying trade war between the United States and China. Spot gold was trading 0.2 percent up at $1,243.84 an ounce at 0510 GMT, having touched a high of $1265.79 on Monday, its highest since Jun. 26. U.S. gold futures for August delivery were 0.1 percent lower at $1,243.60 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.863 percent higher by 0.02 bps, while 5-year yield was 0.026 bps up at 2.765 percent.
The Australian government bond futures dipped but were still near recent three-month highs. The three-year bond contract was off half a tick at 97.935, while the 10-year contract fell 1.5 ticks to 97.3700.
The New Zealand government bonds eased a fraction, sending yields 0.5 basis points higher towards the long end of the curve.
The Canadian government bond prices were mixed across a flatter yield curve, with the two-year down 2 Canadian cents to yield 1.948 percent and the 10-year rising 8 Canadian cents to yield 2.141 percent. The gap between the two-year yield and its U.S. equivalent narrowed by 3.3 basis points to a spread of -62.6 basis points.
