Market Roundup
- ECB will act if inflation expectations are de-anchored: de Guindos
- Pressure builds on Hong Kong leader with democracy activist set to leave jail
- China cbank injects funds, second phase of RRR cut takes effect
- China says to roll out rare earths policies as soon as possible
- U.S. chipmakers quietly lobby to ease Huawei ban -sources
- Saudi seeks oil supply protection as U.S and Iran face off
- Taking aim at Johnson, British PM hopefuls make Brexit case
- Moody's cuts Turkey rating to B1, ministry challenges move
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Q1 Labour Costs YY, 2.3% prev
- (0600 ET/1000 GMT) EZ May Reserve Assets Total (EUR), 740.43 bln prev
Key Events Ahead
- N/A Colombian President Ivan Duque Marquez and his Finance Minister Alberto Carrasquilla Barrera, Trade Minister Jose Manuel Restrepo and Energy Minister Maria Fernanda Suarez speak at financial conference to promote Colombian capital markets in London (to June 19).
- N/A UK Finance Minister Philip Hammond and China's Vice Premier Hu Chunhua discuss multilateral and bilateral economic issues, financial services cooperation, and trade and investment in London
- N/A Top ECB officials speak at the bank's annual showcase conference in Sintra, Portugal (to June 19).
- (0500 ET/0900 GMT) Bank of Spain Governor Pablo Hernandez de Cos opens financial congress in Santander, Spain
- (0700 ET/1100 GMT) Riksbank General Council meeting in Stockholm
- (1300 ET/1700 GMT) ECB's Mario Draghi delivers opening remarks at ECB Forum on Central Banking 2019 "20 Years of European Economic and Monetary Union" in Sintra, Portugal
- (1430 ET/1830 GMT) BoC's Lawrence Schembri delivers speech at Economics Society of Northern Alberta, Edmonton in Ottawa
FX Beat
DXY: The dollar index rallied to a 2-week peak, as investors expect Fed Chairman Jerome Powell would leave the door open to future rate cuts at this week’s policy meeting. The greenback against a basket of currencies traded 0.1 percent up at 97.56, having touched a high of 97.59, its highest since June 3. FxWirePro's Hourly Dollar Strength Index stood at 96.01 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after falling to a 1-week low in the previous session, as the European Central Bank recently raised the prospect of even more stimulus to the support the economy. The European currency traded 0.1 percent up at 1.1216, having touched a low of 1.1202 on Friday, its lowest since June 6. FxWirePro's Hourly Euro Strength Index stood at -34.33 (Neutral) by 0500 GMT. Investors’ attention will remain on the Eurozone Labour cost report, ahead of the U.S. NAHB housing market index and NY empire state manufacturing index. Immediate resistance is located at 1.1237 (23.6% retracement of 1.1347 and 1.1202), a break above targets 1.1275 (50% retracement). On the downside, support is seen at 1.1172 (May 24 Low), a break below could drag it below 1.1141 (May 21 Low).
USD/JPY: The dollar surged to a near 1-week peak, as strong U.S. retail sales released on Friday reduced the chances of an easing this week. However, an escalating trade war between the United States and China continued to dent investor risk sentiment, limiting the upside. The pair was trading 0.05 percent up at 108.61, having hit a high of 108.70 earlier, its highest since June 11. FxWirePro's Hourly Yen Strength Index stood at 48.10 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S.NAHB housing market index and NY empire state manufacturing index. Immediate resistance is located at 108.80 (June 11 High), a break above targets 109.08 (Jan. 8 High). 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 plunged to a 2-week low, as investors remain concerned that Prime Minister Theresa May's successor will lead Britain towards a no-deal Brexit. The major traded 0.05 percent down at 1.2590, having hit a low of 1.2575 earlier; it’s lowest since May 31. FxWirePro's Hourly Sterling Strength Index stood at 48.10 (Neutral) 0500 GMT. Investors’ attention will remain on UK inflation report hearings, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2671 (May 29 High), a break above could take it near 1.2732 (June 11 High). On the downside, support is seen at 1.2558 (May 31 Low), a break below targets 1.2506 (Dec.10 Low). Against the euro, the pound was trading flat at 89.06 pence, having hit a low of 89.32 last week, it’s lowest since Jan. 15.
AUD/USD: The Australian dollar consolidated near multi-week lows, as the greenback got a boost from upbeat U.S. retail sales data. On Friday, the major plunged to a 5-month low on data that showed Chinese industrial output slowed to a 17-year low in May. The Aussie trades 0.1 percent up at 0.6877, having hit a low of 0.6861, it’s lowest since Jan. 3. FxWirePro's Hourly Aussie Strength Index stood at -87.34 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6845, a break below targets 0.6810. On the upside, resistance is located at 0.6900 (23.6% retracement 0.6964 and 0.6861), a break above could take it near 0.6959 (May 14 High).
NZD/USD: The New Zealand dollar edged up, halting a 5-day losing streak, as investors awaited the domestic GDP data for the March quarter due on Thursday. The Kiwi trades 0.3 percent up at 0.6508, having touched a low of 0.6487 on Friday, its lowest level May 23. FxWirePro's Hourly Kiwi Strength Index was at -104.08 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6542 (May 21 High), a break above could take it near 0.6573 (June 14 High). On the downside, support is seen at 0.6474 (Oct. 4 Low), a break below could drag it below 0.6432 (Oct. 5 Low).
Equities Recap
Asian shares nudged higher as a rebound in the Hong Kong market boosted risk sentiment, while investors remained cautious ahead of a closely-watched Federal Reserve meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent.
Tokyo's Nikkei rallied 0.05 percent to 21,124.00 points, Australia's S&P/ASX 200 index declined 0.4 percent to 6,530.90 points and South Korea's KOSPI slumped 0.3 percent to 2,088.50 points.
Shanghai composite index rose 0.1 percent to 2,885.64 points, while CSI 300 index traded 0.1 percent down at 3,652.36 points.
Hong Kong’s Hang Seng traded 0.5 percent higher at 27,257.11 points. Taiwan shares added 0.1 percent to 10,530.54 points
Commodities Recap
Crude oil prices surged after U.S. Secretary of State Mike Pompeo said Washington will take all actions necessary to guarantee safe navigation in the Middle East. International benchmark Brent crude was trading 0.2 percent higher at $62.13 per barrel by 0448 GMT, having hit a low of $59.55 on Wednesday, its lowest since June 5. U.S. West Texas Intermediate was trading 0.2 percent up at $52.56 a barrel, after falling as low as $50.71 on Wednesday, its lowest since the June 5.
Gold prices consolidated, just below a 14-month peak hit in the previous session, as the dollar surged after encouraging U.S. retail sales data tempered fears about a sharp downturn in the economy. Spot gold was trading flat at $1,341.16 by 0455 GMT, having touched a high of $1,358.06 on Friday, its highest since April 11. U.S. gold futures fell 0.3 percent to $1,340.20 an ounce.
Treasuries Recap
The shorter-dated Japanese government bond prices slipped, with the two-year and five-year JGB yields edging up half a basis point to minus 0.200 percent and minus 0.230 percent, respectively. The benchmark 10-year JGB yield stood unchanged at minus 0.130 percent.
The Australian government bond futures eased, with the three-year bond contract off 4.5 ticks at 99.01. The 10-year contract dipped 3.25 ticks to 98.5900.
