Market Roundup
- Trump revealed intelligence secrets to Russians in Oval Office -officials
- RBA carefully monitoring labour, housing markets –minutes
- RBA judged steady rates consistent with achieving sustainable growth, inflation target
- RBA minutes repeats a rise in A$ would complicate economic adjustment
- Australia Apr new vehicle sales up 0.3% m/m, last 1.9%
- China c. bank injects net 170 bln yuan, the most in nearly 4 months
- China set yuan midpoint at 6.8790/dollar, strongest level since Apr 24
- Australia and Hong Kong begin free trade agreement talks
- Researchers see possible North Korea link to global cyber attack
Economic Data Ahead
- (0200 ET/0600 GMT) Norway Q1 GDP Growth, 0.2% forecast; last 1.1%
- (0200 ET/0600 GMT) Norway Q1 GDP Growth Mainland, 0.5% forecast; last 0.3%
- (0245 ET/0645 GMT) France Apr CPI (EU Norm) Final, 1.4% y/y, 0.1% m/m forecast; last 1.4%, 0.7%
- (0400 ET/0800 GMT) Italy Q1 GDP Prelim, 0.2% q/q, 0.8% y/y forecast; last 0.2%, 1.0%
- (0430 ET/0830 GMT) Great Britain Apr CPI, 0.4% m/m, 2.6% y/y forecast; last 0.4%, 2.3%
- (0430 ET/0830 GMT) Great Britain Apr Core CPI, 2.2% y/y, 0.4% m/m forecast; last 1.8%, 0.4%
- (0430 ET/0830 GMT) Great Britain Apr PPI Core Output NSA, 0.2% m/m, 2.5% y/y forecast; last 0.3%, 2.5%
- (0430 ET/0830 GMT) Great Britain Apr RPI, 0.5% m/m, 3.4% y/y forecast; last 0.3%, 3.1%
- (0500 ET/0900 GMT) Eurozone Q1 GDP Flash Estimate, 1.7% y/y, 0.5% q/q forecast; last 1.7%, 0.5%
- (0500 ET/0900 GMT) Eurozone Mar Eurostat Trade NSA (EUR), 26.5 bln forecast; last 17.8 bln
- (0500 ET/0900 GMT) Germany May ZEW Economic Sentiment, 22.0 forecast; last 19.5
- (0500 ET/0900 GMT) Germany May ZEW Current Conditions, 82.0 forecast; last 80.1
Key Events Ahead
- N/A EU General Affairs council meets in Brussels
- N/A German finmin Schaeuble takes part "This is what Europe sounds like - Part VIII Malta" event
- (0630 ET/1030 GMT) Riksbank gov Stefan Ingves speaks on monetary policy challenges
- (1400 ET/1800 GMT) ECB's Benoit Coeure speaks at the annual dinner of the ECB's Bond Market Contact Group
- N/A UK 40Y E4.000 bln
- N/A France EUR 30yr benchmark syndicated OAT, 144A/RegS via BNPP/Citi/HSBC/JPM/SG
- N/A Slovenia EUR tap of 1.75% 3 Nov 2040 and 1.25% Mar 2027s. Barc/BNPP/DB/GS/JPM
FX Beat
DXY: The dollar eased across the board on news that the U.S. President Trump reportedly disclosed classified information to Russian officials. The greenback against a basket of currencies traded 0.1 percent down at 98.77, having hit a low of 98.76 earlier, it’s lowest since May 8. FxWirePro's Hourly Dollar Strength Index stood at -110.08 (Highly Bearish) by 0400 GMT.
EUR/USD: The euro rose, extending gains for the third consecutive session as the dollar hovered near a one-week low against a basket of major currencies after a surprisingly soft U.S. manufacturing report. The European currency traded 0.1 percent up at 1.0987, having touched a high of 1.0989 earlier, its highest since May. 8. FxWirePro's Hourly Euro Strength Index stood at 87.71 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on Eurozone's trade balance, preliminary gross domestic product and ZEW Survey- Economic Sentiment, ahead of U.S. housing starts, building permits, capacity utilization and industrial production for fresh incentives on the major. Immediate resistance is located at 1.100, a break above targets 1.1020. On the downside, support is seen at 1.0922 (10-DMA), a break below could drag it near 1.0900.
USD/JPY: The dollar declined after rebounding from a 1-week low in the previous session as headlines hit the wires that the U.S. President Trump reportedly disclosed classified information to Russian officials. Moreover, series of downbeat U.S. macro data also weighed on the greenback amid a drop in the treasury yields. The pair traded 0.2 percent down at 113.50, having touched a low of 113.12 on Monday, its lowest since May 8. FxWirePro's Hourly Yen Strength Index stood at -68.96 (Bearish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. housing starts, building permits, capacity utilization and industrial production figures. Immediate resistance is located at 113.85 (5-DMA), a break above targets 114.00. On the downside, support is seen at 113.23 (10-DMA), a break below could take it near 112.40 (May 8 Low).
GBP/USD: Sterling steadied above the 1.2900 handle ahead of UK Consumer Price Index, retail price index and producer price index. Moreover, broad-based weakness in the greenback also supported the major. Sterling trades 0.1 percent up at 1.2906, having hit a low of 1.2849 last week, its lowest since May 4. FxWirePro's Hourly Sterling Strength Index stood at -34.38 (Neutral) by 0400 GMT. Investors’ attention will remain on series of UK economic data, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2940 (Previous Session High), a break above could take it near 1.2987 (May 10 High). On the downside, support is seen at 1.2844 (May 12 Low), a break below targets 1.2800. Against the euro, the pound traded flat at 85.12 pence, having hit a fresh low of 85.13 earlier in the session.
AUD/USD: The Australian dollar edged down, halting a 4-day rally after minutes of the central bank's policy meeting reiterated views that interest rates will remain at record lows for near-term. Moreover, a renewed bout of risk aversion undermined the bid tone around the major. The Aussie trades down at 0.7411, having hit a high of 0.7445 on Monday, it’s strongest since May. 3. FxWirePro's Hourly Aussie Strength Index stood at 44.97 (Neutral) by 0400 GMT. Investors will continue to digest RBA's latest policy meeting minutes, ahead of the U.S economic releases. Immediate support is seen at 0.7404 (10-DMA), a break below targets 0.7376 (5-DMA). On the upside, resistance is located at 0.7445 (Previous Session High), a break above could take it near 0.7467 (21-DMA).
NZD/USD: The New Zealand dollar rose, extending gains for the third consecutive session as crude oil price continued to rise following Saudi Arabia and Russia’s commitment to extend production cuts. Moreover, weakness in the greenback following downbeat U.S. economic data continued to underpin the demand for the major. The Kiwi trades 0.1 percent up at 0.6886, having rebounded from a low of 0.6817 hit on Thursday, its weakest since Jun. 03. FxWirePro's Hourly Kiwi Strength Index was at -77.74 (Slightly Bearish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. economic data. Immediate resistance is located at 0.6918 (23.6% retracement of 0.6950 and 0.6817), a break above could take it near 0.6950. On the downside, support is seen at 0.6849 (Previous Session Low), a break below could drag it till 0.6800.
Equities Recap
Asian stocks eased after rising to a fresh two-year high following an overnight rise on Wall Street, while the greenback tumbled to a one-week low on weak US manufacturing activity and geopolitical tensions.
MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.1 percent after hitting its highest level since June 2015.
Tokyo's Nikkei gained 0.1 percent to 19,900.18 points, Australia's S&P/ASX 200 index rose 0.2 percent to 5,852.20 points and South Korea's KOSPI jumped 0.06 percent at 2,291.95 points.
Shanghai composite index edged down 0.2 percent to 3,081.99 points, while CSI300 index was trading 0.02 percent higher at 3,400.11 points.
Hong Kong’s Hang Seng was trading 0.3 percent lower at 25,290.69 points. Taiwan shares shed 0.2 percent to 10,014.90 points.
Commodities Recap
Crude oil prices rose, extending previous session gains after a joint announcement by Saudi Arabia and Russia for an extension of supply cuts until the end of March 2018 boosted market sentiment. International benchmark Brent crude was trading 0.4 percent up at $51.96 per barrel by 0407 GMT, having hit a high of $52.58 the day before, its strongest since Apr. 21. U.S. West Texas Intermediate rallied 0.4 percent to $48.99 a barrel, after rising as high as $49.63 the prior session, its highest since Apr. 28.
Gold prices gained after rising to a 1-week high in the previous session as the dollar continued to ease after weak U.S. manufacturing data dented expectations of an aggressive string of interest rate hikes by the Federal Reserve. Spot gold was up 0.3 percent at $1,233.20 per ounce at 0412 GMT, having touched its highest since May 4 at 1,237.20 on Monday. U.S. gold futures were up 0.1 percent at $1,230.90 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.332 percent lower by 0.005 bps, while 5-year yield was 0.006 bps down at 1.851 percent.
The Australian government bonds remained flat after the Reserve Bank of Australia (RBA) maintained a cautious tone in its May monetary policy meeting minutes, released earlier today. The yield on the benchmark 10-year Treasury note hovered around 2.59 percent, the yield on 15-year note remained flat at 2.99 percent and the yield on short-term 2-year also remained steady at 1.66 percent.
The New Zealand government bonds eased, sending yields 1.5 basis points higher along the curve.
The Canadian government bond prices were lower across the yield curve, with the 10-year falling 16 Canadian cents to yield 1.592 percent.
