Market Roundup
- Australia Apr jobless rate, 5.7% vs forecast 5.9%, last 5.9%
- Australia Apr total jobs, +37.4k vs forecast 5k, last 60.9k
- Former FBI chief Mueller appointed to probe Trump-Russia ties
- Japan Q1 GDP +0.5% q/q, +2.2% AR, +0.4% and +1.7% eyed, consumption-CAPEX-exports-tourism good, fifth straight quarter of expansion, run longest since Q1 '05 to Q2 ’06, Q1 growth best since Q1 ‘16.
- Mof flow data week-ended May 13 – Japanese buy net Y273.4 bln foreign stocks, Y1.8212 trln bonds, sell Y24.3 bln bills; foreign investors buy net Y372.2 bln Japanese stocks, Y395.4 bln JGBs, Y434.9 bln bills
- BoJ DepGov Iwata– Nothing on exit from policy, depends on rates at time
- EconMin Ishihara – Economy recovering but no clean escape from deflation
- China Apr new home prices +0.7% m/m, 10.7% y/y; last +0.6%, +11.3%
- China approved $20.6 bln worth of fixed-asset investment projects in Apr
- New Zealand consumer confidence rose 123.9, last 121.7 - ANZ survey
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Apr Retail Sales, +2.1% y/y, +1.0% m/m eyed; last +1.7%, -1.8%
- (0430 ET/0830 GMT) Great Britain Apr Retail Sales Ex-Fuel, 1.1% m/m, +2.5% y/y eyed; last -1.5%, +2.6%
Key Events Ahead
- N/A ECB's Yves Mersch, Bundesbank's President Jens Weidmann speak at a symposium
- N/A ECB governing council meeting, followed by interest rate announcement
- (0430 ET/0830 GMT) ES 3Y E2.000 bln, 7Y E0.750 bln, 9Y E0.750 bln, 10Y E1.500 bln auctions
- (0450 ET/0850 GMT) ECB's Yves Mersch speaks on "Vision 2020 of the Eurosystem”
- (0450 ET/0850 GMT) FR 3Y E3.75 bln, 5Y E3.75 bln, 11YI E0.666 bln, 13YEI E0.666 bln, 30YEI E0.666 bln auctions
- (0530 ET/0930 GMT) UK 2Y 2.750 bln auction
- (0600 ET/1000 GMT) Greek finmin Tsakalotos, c.bank gov Stournaras speak on Greece's future
- (0845 ET/1245 GMT) ECB's Sabine Lautenschlager speaks at the IBF Board meeting in Berlin
FX Beat
DXY: The dollar rebounded across the board following a recovery in the U.S. Treasury yields across the curve. The greenback against a basket of currencies traded 0.2 percent up at 97.61, having hit a low of 97.33 in the previous session, it’s lowest since Nov. 9. FxWirePro's Hourly Dollar Strength Index stood at -71.17 (Bearish) by 0500 GMT.
EUR/USD: The euro steadied after rising to a fresh 6-month high as the greenback rebounded from recent lows following a recovery in the U.S. Treasury yields. The European currency traded flat 1.1156, having touched a high of 1.1171 earlier, its highest since Nov. 9. FxWirePro's Hourly Euro Strength Index stood at 37.22 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone's monetary policy meeting accounts, ahead of U.S. unemployment benefits and Philadelphia Fed manufacturing Survey. Immediate resistance is located at 1.1200, a break above targets 1.1250. On the downside, support is seen at 1.1099 (78.6% retracement of 1.0839 and 1.1171), a break below could drag it near 1.1044 (61.8% retrace)/1.1005.
USD/JPY: The dollar rebounded after falling to an over 3-week low earlier in the session as a decent pull back in the treasury yields from near one-month lows supported the bid tone around the major. The pair traded 0.3 percent up at 111.12, having touched a low of 110.52 earlier, its lowest since Apr 25. FxWirePro's Hourly Yen Strength Index stood at 134.94 (Highly Bullish) by 0400 GMT. Investors’ will continue to track sentiment around the U.S. Treasuries, ahead of U.S. unemployment benefits and Philadelphia Fed manufacturing Survey. Immediate resistance is located at 111.44 (23.6% retracement of 114.36 and 110.54), a break above targets 112.00. On the downside, support is seen at 110.52 (Session Low), a break below could take it near 110.00.
GBP/USD: Sterling steadied after rising to a 1-week high in the previous session as markets awaited the UK retail sales data for further clues on the major. Investors expect the UK retail sales to reverse course and gain to 1.0 percent in April after witnessing a sharp fall previously. Sterling trades flat at 1.2968, having hit a high of 1.2990 the prior session, its strongest since May 10. FxWirePro's Hourly Sterling Strength Index stood at -67.46 (Bearish) by 0400 GMT. Investors’ attention will remain on UK retail sales report, ahead of the U.S fundamental drivers. Immediate resistance is located at 1.2990 (Previous Session High), a break above could take it over 1.3000. On the downside, support is seen at 1.2926 (10-DMA), a break below targets 1.2900. Against the euro, the pound traded 0.1 percent up at 85.89 pence, having hit a 1-1/2 month low of 86.14 in the prior session.
AUD/USD: The Australian dollar rallied to a 2-week high after data showed Australia’s unemployment rate fell to a four-month low, supporting the case for a stable interest rate outlook in the near term. The economy’s unemployment declined to 5.7 percent in April, beating forecasts of a steady rate of 5.9 percent. The Aussie trades 0.4 percent up at 0.7459, having hit a high of 0.7466 earlier, it’s strongest since May. 3. FxWirePro's Hourly Aussie Strength Index stood at 54.31 (Bullish) by 0500 GMT. Investors will continue to digest upbeat domestic employment report, ahead of the U.S economic releases. Immediate support is seen at 0.7436 (78.65 retracement of 0.7328 and 0.7466), a break below targets 0.7394 (10-DMA). On the upside, resistance is located at 0.7466 (Session High), a break above could take it near 0.7500.
NZD/USD: The New Zealand dollar eased after rising to a 1-week high earlier in the session as a mild recovery in the US dollar combined with oil price weakness undermined the bid tone around the major. The Kiwi trades 0.1 percent down at 0.6931, having retreated from an early high of 0.6949, its strongest since May 10. FxWirePro's Hourly Kiwi Strength Index was at 53.88 (Bullish) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6950 (May 10 High), a break above could take it near 0.6800. On the downside, support is seen at 0.6921 (78.65 retracement of 0.6817 and 0.6949), a break below could drag it till 0.6899 (61.8% retrace).
Equities Recap
Asian stocks tumbled, while the dollar rebounded from a near six-month low against a basket of currencies following a bounce in the U.S. Treasury yields.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.4 percent.
Tokyo's Nikkei fell 1.4 percent to 19,539.90 points, Australia's S&P/ASX 200 index declined 1.02 percent to 5,727.40 points and South Korea's KOSPI eased 0.3 percent to 2,284.52 points.
Shanghai composite index edged down 0.4 percent to 3,090.53 points, while CSI300 index was trading 0.4 percent lower at 3,395.19 points.
Hong Kong’s Hang Seng was trading 0.3 percent lower at 25,223.18 points. Taiwan shares shed 0.4 percent to 9,969.45 points.
Commodities Recap
Crude oil prices declined, dragged lower by plentiful supply despite ongoing efforts led by OPEC to tighten the market by cutting production. International benchmark Brent crude was trading 0.1 percent down at $52.02 per barrel by 0405 GMT, having hit a high of $52.58 on Monday, its strongest since Apr. 21. U.S. West Texas Intermediate fell 0.05 percent to $48.78 a barrel, after rising as high as $49.63 on Monday, its highest since Apr. 28.
Gold prices rose to an over 2-week high as political uncertainty in the United States and tempered expectations for an aggressive string of U.S. interest rate hikes supported the safe-haven metal. Spot gold gained 0.5 percent at $1,260.89 per ounce by 0408 GMT, after touching its strongest since May 1 at $1,263.03 earlier. U.S. gold futures were up 0.1 percent at $1,260 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.241 percent higher by 0.026 bps, while 5-year yield was 0.026 bps up at 1.7739 percent.
The Australian bonds jumped following a drop in the country’s inflation expectations for the month of May. The yield on the benchmark 10-year Treasury note slumped nearly 3-1/2 basis points to 2.50 percent, the yield on 15-year note also plunged almost 3-1/2 basis points to 2.90 percent and the yield on short-term 4-year traded 1/2 basis point lower at 1.99 percent.
The New Zealand government bonds gained, sending yields 5.5 basis points lower at the long end of the curve.
The Canadian government bond prices were higher across the yield curve, with the two-year up 8 Canadian cents to yield 0.660 percent and the 10-year climbing C$1.14 to yield 1.447 percent.
