Market Roundup
- Chinese media says US has 'delusions', urges focus on domestic development
- Japan May CPI, Core Nationwide YY, 0.70%, f'cast 0.70%, last 0.70%
- IMF welcomes Greek debt deal but has reservations on long-term debt sustainability
- OPEC strives for deal to raise oil output as Iran resists
- Malaysia appoints ex-central banker Nor Shamsiah as new governor
- U.S.-based money market funds post $51 bln net outflows for week -Lipper
- U.S. muni bond funds post $646 mln in inflows-Lipper
- Foreign CB US debt holdings +$2.150 bln to $3.403 tln June 20 week
- Treasuries +$3.350 bln to $3.041 tln, agencies +$1.452 bln to $289.576 bln
Economic Data Ahead
- (0245 ET/0645 GMT) France Q1 GDP QQ Final, f'cast 0.20%, last 0.20%
- (0300 ET/0700 GMT) France Jun Markit Mfg Flash PMI, f'cast 53.9, last 54.4
- (0300 ET/0700 GMT) France Jun Markit Serv Flash PMI, f'cast 54.3, last 54.3
- (0300 ET/0700 GMT) France Jun Markit Comp Flash PMI, f'cast 54.2, last 54.2
- (0330 ET/0730 GMT) Germany Jun Markit Mfg Flash PMI, f'cast 56.2, last 56.9
- (0330 ET/0730 GMT) Germany Jun Markit Serv Flash PMI, f'cast 52.1, last 52.1
- (0330 ET/0730 GMT) Germany Jun Markit Comp Flash PMI, f'cast 53.4, last 53.4
- (0400 ET/0800 GMT) EZ Jun Markit Mfg Flash PMI, f'cast 55.0, last 55.5
- (0400 ET/0800 GMT) EZ Jun Markit Serv Flash PMI, f'cast 53.7, last 53.8
- (0400 ET/0800 GMT) EZ Jun Markit Comp Flash PMI, f'cast 53.9, last 54.1
Key Events Ahead
- (0300 ET/0700 GMT) South Africa's finance minister Nhlanhla Nene holds journalist briefing - London
- (0900 ET/1300 GMT) Fed's Beverly Hirtle speaks at "The Effects of Post-Crisis Banking Reforms" - New York
- (1250 ET/1650 GMT) Former Fed governor Daniel Tarullo speaks at a conference - New York City
- N/A ECB's Luis de Guindos participates at ECOFIN meeting - Luxembourg City
- N/A Economic and Financial Affairs Council meets – Luxembourg
FX Beat
DXY: The dollar index retreated from 11-month peak as weaker Philly Fed manufacturing index dragged down U.S. Treasury yields. The greenback against a basket of currencies trades 0.2 percent down at 94.86, having touched a high of 95.53 on Thursday, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at -76.43 (Slightly Bearish) by 0500 GMT.
EUR/USD: The euro held gains above the 1.1600 handle after falling to an 11-month low in the previous session on increasing worries over monetary policy divergence between the U.S. Federal Reserve and the European Central Bank. The European currency traded 0.1 percent down at 1.1612, having touched a low of 1.1508 on Thursday, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at 55.13 (Bullish) by 0400 GMT. Investors’ attention will remain on the prelim Eurozone Markit manufacturing PMI and service PMI, and U.S. flash Markit manufacturing, service and composite figures. Immediate resistance is located at 1.1664 (10-DMA), a break above targets 1.1700. 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 steadied after falling to a 3-day low earlier in the day on data showing the Philadelphia Federal Reserve's manufacturing index declined sharply to a 1-1/2 year low, raising concern about the U.S. economy. The major was trading 0.05 percent up at 110.01, having hit a low of 109.55 on Tuesday, its lowest since June 11. FxWirePro's Hourly Yen Strength Index stood at -14.00 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. flash Markit manufacturing, service and composite figures. Immediate resistance is located at 110.90 (June 15 High), a break above targets 111.08 (June 18 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 rose, extending previous session gains after the Bank of England kept interest rates on hold, with chief economist Andy Haldane unexpectedly joining those calling for rates to rise to 0.75 percent, heightening expectations that it could tighten policy at its next meeting in August. The major traded 0.3 percent up at 1.3270, having hit a low of 1.3102 the day before; it’s lowest since Nov 14. FxWirePro's Hourly Sterling Strength Index stood at 88.56 (Highly Bearish) 0500 GMT. Investors’ attention will remain on the BoE Quarterly Bulletin, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3313 (21-DMA), a break above could take it near 1.3389. On the downside, support is seen at 1.3220 (5-DMA), a break below targets 1.3150 (June 19 Low). Against the euro, the pound was trading 0.1 percent down at 87.61 pence, having hit a low of 88.01 pence on Wednesday, it’s lowest since June 14.
AUD/USD: The Australian dollar rose ahead of the Organization of the Petroleum Exporting Countries meeting on output policy, with top consumers such as the United States, China, and India calling for the oil prices to cool down and support the world economy by producing more crude. The Aussie trades 0.3 percent up at 0.7396, having hit a low of 0.7345 on Thursday; it’s lowest since June 2017. FxWirePro's Hourly Aussie Strength Index stood at -15.44 (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 (June 21 Low), a break below targets 0.7328 (May 28, 2017, Low). On the upside, resistance is located at 0.7427 (June 19 High), a break above could take it near 0.7480.
NZD/USD: The New Zealand dollar surged above the 0.6900 handle as a soft reading on regional manufacturing in the United States weighed down the U.S. dollar. The Kiwi trades 0.6 percent up at 0.6903, having touched a low of 0.6825, its lowest level since Dec. 8. FxWirePro's Hourly Kiwi Strength Index was at 26.50 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6943, a break above could take it near 0.6986 (21-DMA). On the downside, support is seen at 0.6818 (Oct. 27 Low), a break below could drag it below 0.6780 (Nov. 17 Low).
Equities Recap
Asian shares slumped to their lowest in six months, on signs U.S. trade war with China and other economies started to hurt corporate profits, while oil prices held gains ahead of an OPEC meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan plunged 0.4 percent.
Tokyo's Nikkei fell 0.9 percent to 22,490.50 points, Australia's S&P/ASX 200 index eased 0.1 percent to 6,223.80 points, and South Korea's KOSPI surged 0.3 percent to 2,344.45 points.
Shanghai composite index rose 0.1 percent to 2,876.19 points, while CSI300 index was trading 0.1 percent down at 3,590.84 points.
Hong Kong’s Hang Seng was trading 0.1 percent lower at 29,259.72 points. Taiwan shares shed 0.4 percent to 10,899.28 points.
Commodities Recap
Crude oil prices rallied by more than 1 percent in early trade, boosted by uncertainty over whether OPEC would manage to agree a production increase at a meeting in Vienna later in the day. International benchmark Brent crude was trading 1.2 percent up at $73.93 per barrel by 0416 GMT, having hit a low of $72.44 Monday, its lowest since May 2. U.S. West Texas Intermediate was trading 0.9 percent up at $66.38 a barrel, after falling as low as $63.62 on Monday, its lowest since April 10.
Gold prices edged up after hitting a 6-month low in the previous session, as the dollar index fell from an 11-month peak against a basket of major currencies on profits taking. Spot gold was 0.1percent higher at $1,268.24 an ounce by 0057 GMT. It touched its lowest since Dec. 19 at $1,260.84 on Thursday. U.S. gold futures GCcv1 for August delivery were nearly unchanged at $1,270.20 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.911 percent higher by 0.014 bps, while 5-year yield was 0.015 bps up at 2.782 percent.
The Japanese 10-year government bonds traded in a tight range after the country’s national consumer price inflation (CPI) for the month of May met market expectations, although remaining far from the Bank of Japan’s (BoJ) 2 percent target. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, slipped slightly to 0.03 percent, the yield on the long-term 30-year hovered around 0.71npercent and the yield on short-term 2-year traded flat at -0.13 percent.
The Australian government bonds gained on last trading day of the week with the U.S. Treasuries amid a backdrop of lingering concerns related to escalating trade tensions between the US and China. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 3 basis points to 2.655 percent, the yield on the long-term 30-year Note dipped 4-1/2 basis points to 3.153 percent and the yield on short-term 2-year down 3 basis points to 2.044 percent.
The Canadian government bond prices were higher across a flatter yield curve, with the 10-year rising 37 Canadian cents to yield 2.143 percent. The 10-year yield touched its lowest intraday since April 4 at 2.123 percent.
