Market Roundup
- China's central bank unexpectedly holds fire on rates as economy wobbles
- Trump to meet with top trade advisers on activation of China tariffs -source
- China May Industrial Output YY, 6.8%, f'cast 6.9%, last 7.0%
- China May Retail Sales YY, 8.5%, f'cast 9.6%, last 9.4%
- China May Urban Investment (ytd) yy, 6.1%, f'cast 7.0%, last 7.0%
- S.Korea's Moon meets Pompeo, says world has escaped nuclear weapons threat
- Japan to join EU in WTO talks on U.S. steel tariffs - source
- BOJ trims purchase amount JGBs with midterm maturity at regular operation
- Australia May Employment, 12.0k, f'cast 18.0k, last 22.6k, rvsd 18.4k
- Australia May Unemployment Rate, 5.4%, f'cast 5.5%, last 5.6%
- Japan w/e Jun 9 Foreign Bond Investment, -488.5 bln, last -1,665.8 bln, rvsd -1,664.28 bln
- Japan w/e Jun 9 Foreign Invest JP Stock, -108.5 bln, last -527.6 bln, rvsd -527.8 bln
- ECB gets ready to pull the plug on stimulus scheme
- Weakened, UK's May defeats final Brexit challenges in parliament
- Great Britain May RICS Housing Survey, -3, f'cast -5, last -8, rvsd -7
Economic Data Ahead
- (0245 ET/0645 GMT) France May CPI (EU Norm) Final YY, f'cast 2.3%, last 2.3%
- (0430 ET/0830 GMT) Great Britain May Retail Sales YY, f'cast 2.4%, last 1.4%
- (0430 ET/0830 GMT) Great Britain GB May Retail Sales Ex-Fuel YY, f'cast 2.5%, last 1.5%
- (0745 ET/1145 GMT) EZ Jun ECB Refinancing Rate, f'cast 0.00%, last 0.00%
- (0745 ET/1145 GMT) EZ Jun ECB Deposit Rate, f'cast -0.40%, last -0.40%
Key Events Ahead
- (0230 ET/0630 GMT) Italy's economy minister Giovanni Tria meets his German counterpart Olaf Scholz - Berlin
- (0830 ET/1230 GMT) ECB's Mario Draghi holds press conference, after interest rate meeting -Riga, Latvia
- (1000 ET/1400 GMT) Norway Central Bank's Egil Matsen speaks at Nordea seminar - Oslo
- (1300 ET/1700 GMT) BOE's Joanna Place hosts Fawcett Society event - London
- (1430 ET/1830 GMT) Fed holds meeting to discuss final rule to establish single-counterparty credit limits for large U.S. bank holding companies - Washington
- N/A BOJ holds Monetary Policy Meeting
- N/A EU's Valdis Dombrovskis to meet Greece's prime minister, central bank governor and finance minister - Athens
FX Beat
DXY: The dollar index eased to a 3-day low as traders booked profits ahead of the European Central Bank's meeting later in the day. The greenback against a basket of currencies trades 0.1 percent down at 93.85, having touched a high of 94.03 on Wednesday, its highest since June 5. FxWirePro's Hourly Dollar Strength Index stood at -83.61 (Slightly Bearish) by 0500 GMT.
EUR/USD: The euro steadied above the 1.1800 handle ahead of the European Central Bank policy meeting outcome, where it is widely expected to stand pat. However, traders will scrutinize the monetary policy statement for clues on the central bank's intentions to begin tapering its bond purchases this year. The European currency traded 0.1 percent up at 1.1805, having touched a high of 1.1839 last week, its highest since May 16. FxWirePro's Hourly Euro Strength Index stood at 116.77 (Highly Bullish) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies and ECB policy decision and press conference, ahead of U.S. retail sales, unemployment benefit claims and export and import price index. Immediate resistance is located at 1.1839 (Jun. 7 High), a break above targets 1.1896 (May 5 High). On the downside, support is seen at 1.1742 (10-DMA), a break below could drag it till 1.1690 (May 24 Low)
USD/JPY: The dollar eased, extending previous session losses amid fresh concerns about U.S.-China trade relations. A senior Trump administration official stated that U.S. President Donald Trump will meet with his trade advisers to decide whether to impose threatened tariffs on billions of dollars in Chinese goods. The major was trading 0.2 percent down at 110.12, having hit a high of 110.84 the day before, its highest since May 23. FxWirePro's Hourly Yen Strength Index stood at -131.37 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. retail sales, unemployment benefit claims and export and import price index. Immediate resistance is located at 110.85 (May 17 Low), a break above targets 111.18 (May 22 High). On the downside, support is seen at 109.88 (21-DMA), a break below could take it lower 109.47 (June 7 Low).
GBP/USD: Sterling steadied near the 1.3400 handle as soft consumer price index did little to shake market expectations of an interest rate hike over the course of the year. Investors now price in a 43 percent chance of a 25 basis point hike in August and barely one rate hike by end-2018. The major traded 0.2 percent up at 1.3397, having hit a low of 1.3308 on Wednesday, it’s lowest since June 8. FxWirePro's Hourly Sterling Strength Index stood at 6.71 (Neutral) by 0400 GMT. Investors’ attention will remain on the UK retail sales, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3439 (June 8 High), a break above could take it near 1.3483 (May 21 High). On the downside, support is seen at 1.3302 (June 6 Low), a break below targets 1.3253 (June 1 Low). Against the euro, the pound was trading 0.05 percent up at 88.13 pence, having hit a low of 88.37 pence on Wednesday, it’s lowest since May 7.
AUD/USD: The Australian dollar declined following the releases of worse-than-expected domestic employment and series of Chinese data. Australian full-time employment numbers unexpectedly dropped in May, while a big miss on the Chinese retail sales and fixed asset investment data raised doubts on the economic growth outlook in both the economies. The Aussie trades 0.3 percent down at 0.7550, having hit a low of 0.7529 the day before; it’s lowest since Jun. 1. FxWirePro's Hourly Aussie Strength Index stood at -89.69 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7539 (May 28 Low), a break below targets 0.7522 (May 23 Low). On the upside, resistance is located at 0.7604 (10-DMA), a break above could take it near 0.7682 (Apr 23 High).
NZD/USD: The New Zealand dollar rose, extending gains from the previous session, despite data showing the industrial production in China rose 6.8 percent year-on-year in May, missing the estimate of a 7 percent rise. While retail sales came in at 8.5 percent year-on-year - well below the estimated figure of 9.6 percent. The Kiwi trades 0.2 percent up at 0.7035, having touched a low of 0.6974 on Wednesday, its lowest level since June 1. FxWirePro's Hourly Kiwi Strength Index was at -67.93 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7089, a break above could take it near 0.7120. On the downside, support is seen at 0.6985 (May 5 Low), a break below could drag it below 0.6962.
Equities Recap
Asian shares plunged amid U.S.-China trade concerns and after the Federal Reserve raised interest rates and took a more hawkish tone in forecasting a slightly faster pace of tightening.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.5 percent.
Tokyo's Nikkei declined 1.01 percent to 22,738.61 points, Australia's S&P/ASX 200 index eased 0.2 percent to 6,016.60 points, and South Korea's KOSPI plunged 1.55 percent to 2,430.46 points.
Shanghai composite index fell 0.4 percent to 3,037.16 points, while CSI300 index was trading 0.6 percent down at 3,765.11 points.
Hong Kong’s Hang Seng was trading 1.2 percent lower at 30,366.94 points. Taiwan shares shed 1.4 percent to 11,013.98 points.
Commodities Recap
Crude oil prices steadied, amid strong demand and a drop in U.S. fuel inventories, however, rising output limited upside. International benchmark Brent crude was trading 0.05 percent up at $76.49 per barrel by 0431 GMT, having hit a high of $77.56 on Friday, its highest since June 1. U.S. West Texas Intermediate was trading 0.05 percent up at $66.61 a barrel, after rising as high as $66.86 on Wednesday, its highest since June 1.
Gold prices declined after the Federal Reserve raised interest rates and forecast two more U.S. rate increases this year, although lingering worries over trade tensions between Washington and Beijing prevented downside. Spot gold was 0.1 percent down at $1,298.97 per ounce at 0436 GMT, having hit a low of $1,292.01 on Wednesday, its lowest price level since June 8. U.S. gold futures for August delivery rose 0.1 percent to $1,302.60 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.953 percent lower by 0.026 bps, while 5-year yield was 0.017 bps down at 2.822 percent.
The Japanese government bonds gained during late Asian session as the trade war fear between the United States and China soured investors’ risk sentiments. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1 basis point to 0.03 percent, the yield on the long-term 30-year note remained tad lower at 0.72 percent and the yield on short-term 2-year traded 1/2 basis point lower at -0.13 percent.
The Australian government bonds gained following weaker-than-expected May employment change and Chinese economic data. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 5 basis points to 2.736 percent, the yield on the long-term 30-year Note dipped 4 basis points to 3.241 percent and the yield on short-term 2-year down 3 basis points to 2.035 percent.
The Canadian government bond prices were lower across a flatter yield curve in sympathy with U.S. Treasuries. The 10-year fell 20 Canadian cents to yield 2.321 percent.
