Market Roundup
- Japan June flash mfg PMI 52.0, May 53.1, new orders growth slowest in 7-mos
- BPCE prices Y58.1 bln 5/7/10/15-year 1st social samurais via Daiwa et al – IFR
- Australian banks face 'Pandora's box' of taxes after state hike
- No Korea tests rocket engine, possibly for ICBM -US officials
- Biggest US banks clear first hurdle in Fed's annual stress tests
- Foreign CB US +$19.7 bln to $3.3 tln June 14 week, treasury +$20.1 bln to $3.0 tln
- Agencies -$607 mln to $262.2 bln
- U.S.-based taxable bond funds attract $3 bln in week: Lipper
Economic Data Ahead
- (0300 ET/0700 GMT) France Jun Markit Comp Flash PMI, 56.70 eyed, last 56.90
- (0330 ET/0730 GMT) Germany Jun Markit Comp Flash PMI, 57.30 eyed, last 57.40
- (0400 ET/0800 GMT) Eurozone Jun Markit Comp Flash PMI, 56.60 eyed, last 56.80
Key Events Ahead
- N/A Czech c. bank's Marek Mora to attend BIS conf in Lucerne
- N/A Draghi participates in the European Council Meeting in Brussels
FX Beat
DXY: The dollar gained versus its Japanese counterpart as a slight improvement in risk sentiment weakened safe-haven assets demand. The greenback against a basket of currencies traded 0.1 percent down at 97.41, having touched a high of 97.87 earlier in the week, it’s highest since May 19. FxWirePro's Hourly Dollar Strength Index stood at -60.96 (Bearish) by 0500 GMT.
EUR/USD: The euro edged up, reversing some of its previous session losses, as investors awaited Eurozone flash manufacturing and services PMI reports. The European currency traded 0.1 percent up at 1.1163, having touched a low of 1.1119 on Tuesday, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at 20.90 (Neutral) by 0400 GMT. Investors’ attention will remain on series of Eurozone economic releases, ahead of U.S. new home sales, Markit preliminary manufacturing and service PMI for further clues on the pair. Immediate resistance is located at 1.1176 (10-DMA), a break above targets 1.1201 (21-DMA). On the downside, support is seen at 1.1132 (June 15 Low), a break below could drag it near 1.1100.
USD/JPY: The dollar rose after declining for three consecutive sessions, as a slight turnaround in risk conditions amid a bounce seen in oil prices and higher Asian equities weakened safe-haven Japanese yen's appeal. The major traded up at 111.33, having hit a high of 111.78 on Tuesday, its highest since May 26. FxWirePro's Hourly Yen Strength Index stood at -59.12 (Bearish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. new home sales, Markit preliminary manufacturing, and service PMI. Immediate resistance is located at 111.50, a break above targets 111.95 (May 25 High). On the downside, support is seen at 110.63 (61.8 % retracement of 108.81 and 111.78), a break below could take it near 110.28 (50.0 % retracement).
GBP/USD: Sterling advanced, extending gains for the third straight day, as investors cheered some optimism derived from the UK May’s offer to the EU citizens at the Brussels Summit. The major traded 0.1 percent up at 1.2697, having hit a low of 1.2589 on Wednesday, its weakest since Apr 18. FxWirePro's Hourly Sterling Strength Index stood at -11.40 (Neutral) by 0400 GMT. Investors’ focus will remain on developments surrounding UK politics, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.2739 (61.8% retrace of 1.2978 and 1.2589), a break above could take it near 1.2785 (50% retrace). On the downside, support is seen at 1.2600, a break below targets 1.2521 (Apr 18 Low). Against the euro, the pound traded flat at 87.97 pence, having hit a 1-week low of 88.45 the prior day.
AUD/USD: The Australian dollar gained, halting its 4-day losing streak, as a rebound in crude oil prices supported the bid tone around the commodity currencies. The Aussie trades 0.2 percent up at 0.7555, having hit a low of 0.7535 the day before, it’s weakest since June 14. FxWirePro's Hourly Aussie Strength Index stood at -84.92 (Slightly 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 (Previous Session Low), a break below targets 0.7519 (June 9). On the upside, resistance is located at 0.7576 (5-DMA), a break above could take it near 0.7635 (June 14 High).
NZD/USD: The New Zealand dollar extended previous session gains after the country's central bank maintained an upbeat view on the economy in its monetary policy statement on Thursday. The Kiwi trades 0.1 percent up at 0.7274, having touched a peak of 0.7319 last week its strongest level since Feb. 8. FxWirePro's Hourly Kiwi Strength Index was at 18.24 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7300, a break above could take it near 0.7350. On the downside, support is seen at 0.7239 (5-DMA), a break below could drag it till 0.7171 (June 12 Low).
Equities Recap
Asian shares traded flat but remained on track for weekly gains, while crude oil prices rebounded from multi-month lows on production cuts.
MSCI's broadest index of Asia-Pacific shares outside Japan was nearly unchanged but was up 0.4 percent for the week.
Tokyo's Nikkei edged up 0.1 percent to 20,126.75 points, Australia's S&P/ASX 200 index gained 0.1 percent to 5,712.50 points and South Korea's KOSPI added 0.2 percent to 2,375.29 points.
Shanghai composite index fell 0.5 percent to 3,132.58 points, while CSI300 index was trading 0.06 percent down at 3,588.27 points.
Hong Kong’s Hang Seng was trading 0.03 percent lower at 25,667.26 points. Taiwan shares shed 0.2 percent to 10,377.70 points.
Commodities Recap
Crude oil edged up, recovering slightly from recent lows hit earlier in the week on the back of ongoing production cuts. International benchmark Brent crude was trading 0.2 percent up at $45.37 per barrel by 0421 GMT, having hit a low of $44.34 on Wednesday, its weakest since Nov. 14. U.S. West Texas Intermediate traded 0.2 percent up at $42.87 a barrel, after falling as low as $42.03 on Wednesday, its lowest since Nov 8.
Gold prices rose, extending gains for the fourth session, however, was on track for a third weekly fall. Spot gold rose 0.1 percent at $1,251.86 per ounce at 0432 GMT, after falling as low as $1,240.73 on Wednesday, its lowest since May 17. U.S. gold futures for August delivery gained 0.2 percent to $1,251.9 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.156 percent higher by 0.003 bps, while 5-year yield was 0.003 up at 1.764 percent.
The Australian bonds remained tad lower as investors booked in profits on the last trading day of the week amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note slumped 1-1/2 basis points to 2.39 percent, the yield on 15-year note plunged 2 basis points to 2.74 percent and the yield on short-term 2-year traded 1 basis point lower at 1.68 percent.
The New Zealand bonds ended on the upside after the Reserve Bank of New Zealand remained unchanged in its monetary policy decision while maintaining a balanced outlook of the economy. At the time of closing, the yield on the benchmark 10-year bond slumped 3-1/2 basis points to 2.75 percent, the yield on 7-year note plunged 3 basis points to 2.66 percent and the yield on short-term 2-year note traded 2-1/2 points lower at 1.96 percent.
The Canadian government bond prices were lower across much of a flatter yield curve, with the two-year down 4 Canadian cents to yield 0.933 percent and the 10-year falling 9 Canadian cents to yield 1.5 percent. The gap between Canada's 2-year yield and its U.S. equivalent narrowed by 3 basis points to a spread of -41.1 basis points, its smallest since Feb. 24.
