Market Roundup
- White House stands firm on Monday deadline for Mexico tariffs -spokeswoman
- As Mexico-U.S. talks progress, markets rise on hopes a deal could be close
- PBOC chief says trade war could temporarily weaken CNY-Bloomberg
- U.S. House Democrats move to fight Trump's stonewalling in court
- Opposition Labour narrowly denies Brexit Party its first seat in UK parliament
- Most EU governments back another Brexit delay, says EU source - The Times
- Japan Apr All Household Spending YY, 1.3%, 2.6% f'cast, 2.1% prev
- Japan Apr Overtime Pay, -1.1%, -3.1% prev
- Australia Apr Housing Finance, -1.2%, -2.5% prev
- Equity fund outflows at $12.2 bln in week-ended Wednesday-Lipper
- Treasury bond funds attract more than $6.77 billion, marking fourth straight week of inflows-Lipper
- Foreign CB US debt holdings (-)$19.929 bln to $3.443 tln June 5 week
- Treasuries (-)$21.565 bln to $3.034 tln, agencies +$893 mln to $332.569 bln
Economic Data Ahead
- (0330 ET/0730 GMT) Great Britain May Halifax House Prices MM, -0.2% f'cast, 1.1% prev
Key Events Ahead
- N/A BOJ’s Haruhiko Kuroda, Japan Finance Minister Taro Aso and OECD Secretary General Jose Angel Gurría speak at G20 symposium on aging and financial inclusiveness in Tokyo
- N/A ECB's Benoît Cœuré participates in G7 Finance Ministers and Central Bank Governors meeting in Fukuoka
- (0615 ET/1015 GMT) Swedish Central Bank Governor Stefan Ingves participates in chat on banking regulation at Goldman Sachs' 23rd Annual European Financials Conference in Paris
- (0800 ET/1200 GMT) Bank of Latvia Governor Ilmars Rimsevics holds news conference in Riga
- (1230 ET/1630 GMT) Richmond Fed's Thomas Barkin speaks before "Technology Diffusion and Productivity" workshop in Richmond
FX Beat
DXY: The dollar index steadied as investors awaited a key U.S. jobs report that is likely to show solid job growth in May, with wage gains expected to pick up, amid escalating trade tensions. The greenback against a basket of currencies traded 0.1 percent up at 97.07, having touched a low of 96.75 on Wednesday, its lowest since Mar. 27. FxWirePro's Hourly Dollar Strength Index stood at -28.88 (Neutral) by 0500 GMT.
EUR/USD: The euro eased from a 7-week peak as the European Central Bank on Thursday ruled out raising interest rates in the next year and opened the door to cutting them or buying more bonds as risk factors such as global trade war and Brexit weighed on the eurozone economy. The European currency traded 0.1 percent down at 1.1266, having touched a high of 1.1309 on Thursday, its highest since Apr. 17. FxWirePro's Hourly Euro Strength Index stood at 95.60 (Slightly Bullish) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, ahead of the U.S. nonfarm payroll report, unemployment rate, wholesale inventories and consumer credit. Immediate resistance is located at 1.1304 (Apr. 18 High), a break above targets 1.1344 (March 15 High). On the downside, support is seen at 1.1210 (Apr. 8 Low), a break below could drag it below 1.1183 (April 2 Low).
USD/JPY: The dollar steadied after U.S. President Donald Trump stated that he would decide whether to impose tariffs on at least $300 billion in Chinese goods after a G20 meeting late this month. The major was trading 0.05 percent up at 108.41, having hit a low of 107.81 on Wednesday, its lowest since Jan. 10. FxWirePro's Hourly Yen Strength Index stood at -90.81 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payroll report, unemployment rate, wholesale inventories and consumer credit. Immediate resistance is located at 108.62 (38.2% retracement of 109.92 and 107.81), a break above targets 109.11 (61.8% retracement). On the downside, support is seen at 107.77 (Jan. 10 Low), a break below could take it lower at 107.51 (Jan. 4 Low).
GBP/USD: Sterling continued to consolidate within narrow ranges, as investors were reluctant to take big positions as they await the outcome of the Conservative party leadership contest to succeed Prime Minister Theresa May. The major traded 0.05 percent up at 1.2694, having hit a high of 1.2743 on Wednesday; it’s highest since May 27. FxWirePro's Hourly Sterling Strength Index stood at 24.01 (Neutral) 0500 GMT. Investors’ attention will remain on UK Halifax House prices and consumer inflation expectations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2747 (May 27 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2647 (May 24 Low), a break below targets 1.2580 (May 30 Low). Against the euro, the pound was trading 0.1 percent up at 88.73 pence, having hit a low of 89.02 on Tuesday, it’s lowest since Jan. 15.
AUD/USD: The Australian dollar declined amid growing speculation that the Reserve Bank of Australia is likely to cut its 1.25 percent cash rate again, possibly in July or August. The Aussie trades 0.1 percent down at 0.6970, having hit a high of 0.7007 on Wednesday, it’s highest since May 10. FxWirePro's Hourly Aussie Strength Index stood at -109.98 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6935 (May 14 Low), a break below targets 0.6881 (May 24 Low). On the upside, resistance is located at 0.7029 (May 2 High), a break above could take it near 0.7061 (May 1 High).
NZD/USD: The New Zealand dollar surged, extending gains for the sixth straight session, supported by comments from Reserve Bank of New Zealand Assistant Governor Christian Hawkesby that rates were on hold for the foreseeable future. The Kiwi trades 0.05 percent higher at 0.6621, having touched a high of 0.6667 on Wednesday, its highest level May 1. FxWirePro's Hourly Kiwi Strength Index was at -82.21 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6653 (May 3 High), a break above could take it near 0.6685 (Apr. 30 High). On the downside, support is seen at 0.6550 (May 15 Low), a break below could drag it below 0.6474 (Oct. 4 Low).
Equities Recap
Asian shares advanced amid signs of progress in the U.S.-Mexican trade standoff, while investors braced for the U.S. jobs report.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.
Tokyo's Nikkei rallied 0.5 percent to 20,884.71 points, Australia's S&P/ASX 200 index surged 0.9 percent to 6,443.90 points and South Korea's KOSPI eased 0.1 percent to 2,067.35 points.
Commodities Recap
Crude oil prices surged, hovering further away from a 5-month low hit earlier in the week after a report stated that Washington could postpone trade tariffs on Mexico and amid signs that OPEC and other producers may extend their supply cuts. International benchmark Brent crude was trading 0.6 percent higher at $62.56 per barrel by 0458 GMT, having hit a low of $59.42 on Wednesday, its lowest since Jan. 28. U.S. West Texas Intermediate was trading 0.5 percent up at $53.32 a barrel, after falling as low as $50.59 on Wednesday, its lowest since the Feb. 12.
Gold prices eased from a 15-week peak recorded earlier in the week, as investors awaited the U.S. jobs report later in the day for fresh clues on the strength of the U.S. labour market. Spot gold was trading 0.2percent down at $1,332.86 per ounce by 0501 GMT, having touched a high of $1,344.01 on Wednesday, its highest since Feb. 20. U.S. gold futures were down 0.4 percent at $1,337.70 an ounce.
Treasuries Recap
The long-dated Japanese government bond yields dropped, with the 30-year bond yield easing 8.5 basis points this week. The benchmark 10-year JGB yield was flat at minus 0.125 percent, hovering close to its lowest since early August 2016. The 20-year yield shed 1.5 basis point to 0.245 percent, while the 40-year yield slipped one basis point to 0.440 percent. Ten-year JGB futures ticked down 0.02 point to 153.49.
The Australian government bond futures eased but were still not far from all-time highs. The three-year bond contract dipped 2.5 ticks to 98.910, while the 10-year contract fell 2 ticks to 98.5000.
The Canadian government bond prices were lower across much of a flatter yield curve, with the 10-year falling 13 Canadian cents to yield 1.461 percent.
