Market Roundup
- RBA Says Holding Policy Unchanged Consistent with Sustainable Growth
- RBA: Financial Markets Attention Now Turning to Some Particular Event Risks
- RBA Says Labour Market Indicators Have Been More Mixed Of Late
- RBA Says Number of Lenders Taking More Cautious Attitude to Lending
- RBA: Inflation Has Been Quite Low, Expected to Remain the Case for Sometime
- PBOC Sets Yuan Mid-Point at 6.5618 / Dlr Vs Last Close 6.5642
- PBOC Injects 50bln Yuan through 7-Day Reverse Repos - Traders
- Japan FinMin Aso Says Won't Comment On Future Response, When Asked About Possibility of Further Yen Gain
- Japan FinMin Aso Will Tell ASEM Meeting That Japan to Stick to Fiscal Reform
- Philippines Says May Inflation at +1.6% Yr/Yr (Reuters Poll: +1.4%)
- Philippines Says May Core Inflation at +1.6% Yr/Yr
- Philippines Says May Inflation at +0.3% Mth/Mth
- Taiwan May CPI +1.24% Y/Y (Reuters Poll +1.69%)
- Taiwan May WPI -2.80% Y/Y
- Taiwan May Core CPI +0.91% Y/Y
- Taiwan May Seasonally Adjusted CPI +0.08% Mth/Mth
- U.S. Treasury's Lew Says Concerns about China's Business Climate Have Grown Due To More Complex Regulatory Environment
- Lew Says Some Foreign Businesses Are Questioning Whether They Are Welcome in China; China Should Open Door Wider To Foreign Investments
- Australia Performance of Construction Index Falls 4.1 Points to 46.7 in May – AIG
- UK BRC Retail Spending +1.4% y/y in May Vs 0.0% in April
- UK BRC Like-For-Like Retail Sales +0.5%y/y in May Vs -0.9% in April
Economic Data Ahead
- (0300 ET/0700 GMT) Spain Ind Output
- (0300 ET/0700 GMT) Slovakia Quarterly Final GDP
- (0400 ET/0800 GMT) Norway Manufacturing Output
- (0400 ET/0800 GMT) Norway Regional Network Survey
- (0500 ET/0900 GMT) Eurozone GDP Revised
Key Events Ahead
- N/A Netherlands 5Y 5.000B 0.000% 15/01/22 . . EUR4-6BN
- (0500 ET/0900 GMT) Austria 7Y E0.550B 1.750% 20/10/23 . . EUR1.1BN
- (0500 ET/0900 GMT) Austria 10Y E0.550B 0.750% 20/10/26 . . TOTAL
- (0530 ET/0930 GMT) UK 30Y 1.500B 4.250% 07/12/46 . . TAP
- (0530 ET/0930 GMT) Germany 10YI 1.000B 0.100% 15/04/26 . .
- (0530 ET/0930 GMT) Portugal 5Y 0.500B 3.850% 15/04/21 . . EUR750MN
FX Beat
USD: The dollar index, against a basket of currencies, stood at 93.97, having touched a 4-week low of 93.745 in the previous session following Federal Reserve Chair Janet Yellen's less hawkish remarks.
EUR/USD: The euro edged up to, 1.1355, moving back towards the previous session's nearly 1-month high of 1.1393. Federal Reserve Chair Janet Yellen's remarks gave a largely upbeat assessment on the U.S. economic outlook, however, the greenback failed to make a recovery on diminishing expectations of interest rate increases in coming months. Yellen stated that the Fed would hike interest rate hikes, but she gave no fresh clues about the timing. Markets attention now remain on series of economic data from the eurozone economies and eurozones gross domestic product report for further momentum on the pair. Immediate resistance is seen at 1.1392 (Previous Session High), break above targets 1.1419/1.1446. On the lower side, support is seen at 1.1325, break below could drag the pair lower 1.1300 level.
USD/JPY: The Japanese yen lost ground against the dollar, pulling away from Monday's 5-week high of 106.35 as the USD bulls are seen fighting to extend recovery. The yen was weighed down by less hawkish comments from Fed Chair Yellen amid positive sentiment surrounding the Asian equities. The major trades 0.1 percent higher at 107.65, having touched sessions high of 107.88. With Yellen's speech effects fading away, markets focus now remains on U.S. economic reports, including non-farm productivity, labor costs and consumer credit; ahead of Japan's gross domestic product data. Immediate resistance is located at 108.00 level, break above targets 108.60. On the down side, support is seen at 107.22 (Session Low), break below could take the pair lower 107 level.
GBP/USD: Sterling soared after a poll published overnight showed that ‘Remain’ campaign took a one point lead on the EU referendum. Remain stood at 43 percent as compared to 41percent last month, while Leave came in at 42 percent compared to 41 percent on May 31. Sterling trades 0.5 percent higher at 1.4519, after rising as high as 1.4656 earlier in the session, pulling away from a 3-week low of 1.4351 touched on Monday. Markets will closely watch U.K. Halifax HPI data for further direction on the pair. Immediate resistance is seen at 1.4656 (Session High), break above targets 1.4688/1.4700. On the downside, support is located at 1.4433, break below could breach 1.4400 level. Against the euro, the pound trades at 78.25 pence, having touched an early high of 77.51, pulling away from a low of 79.05 hit on Monday.
AUD/USD: The Australian dollar rallied to 1-month peak after RBA kept interest rates unchanged at a record low 1.75 percent, as expected. The Aussie rose 0.9 percent to 0.7429, a level last seen since May. 6. The central bank had unexpectedly eased a month ago inorder to counter disturbingly low inflation. With markets still absorbing the central bank decision effects, next focus will remain on series of U.S. economic data, ahead of Australia's home loan and investment lending for homes report. The major continues to rise, hitting fresh session highs. Immediate resistance is located at 0.7450, break above targets 0.7478/0.7500. On the downside, support is seen at 0.7335 (May-11 Low).
NZD/USD: The New Zealand dollar was weighed down by selling pressure, driving the major below the 0.6900 level. However, the kiwi recovered some ground to trade 0.1 percent higher at 0.6925. Markets expect the RBNZ to ease in its next policy review on June 9 and also price a greater chance of U.S. Fed rate hikes. The pair remains weak as the trading activity around the commodities remains subdued. Immediate resistance is located at 0.6949 (Previous Session High), break above targets 0.6983/0.7000. On the lower side, support is seen at 0.6892 (Session Low).
Equities Recap
Asian shares touched a 5-week high after U.S. Federal Reserve Chair Janet Yellen gave strong assessment on the U.S. economic outlook, while the dollar slumped on fading expectations of interest rate hike in near-term.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, taking its gains to 6 percent in two weeks. Taiwan stocks nudged up 1.0 pct at 8,679.90 points.
Tokyo's Nikkei gained 0.58 pct at 16,675.45, Australia's S&P/ASX 200 index edged up 0.11 pct at 5,366.10 points and Seoul shares rose 1.27 pct.
Shanghai Composite Index was flat at 2,936.06 points and CSI300 index was little change at 3,176.60 points. Hong Kong’s Hang Seng Index was trading 1.21 percent higher at 21,291.89 points.
Commodities Recap
Brent crude prices edged lower after touching a 7-month high in the previous session, however, market momentum appeared strong on a weak dollar, French refinery restarts, Nigerian oil infrastructure attacks and declining U.S. crude inventories. Brent crude for August delivery was at $50.44 a barrel by 0640 GMT. It rose as high as $50.49, just short of $50.83 in the previous session, the strongest since Nov. 4. U.S. West Texas Intermediate crude stood at $50.39 per barrel, after rising 2.2 percent on Monday, its largest gain in three weeks.
Gold edged down, but within the sight of 2-week highs. Spot gold was down 0.2 percent at $1,242.38 per ounce by 0645 GMT. It reached a high of $1,246.48, within the range of $1,250.76 last touched on May 24.
Treasuries Recap
The 10-year U.S. treasury yield stood at 1.733 percent versus previous close of 1.723 percent.
Australian government bond futures eased with the 3-year bond contract off 1 tick at 98.460. The 10-year contract was down half a tick to 97.8400, having scaled an all-time peak of 97.8700. The 20-year contract was steady at 97.2350. Yields on 10-year cash bonds edged up to 2.2 percent, from a record low of 2.1 percent set on Monday.
New Zealand government bonds gained, with yields seven basis points lower at the short end and off nine basis points at the long end of the curve.
Canadian government bond prices were lower across the maturity curve, with the 2-year price down 7.5 Canadian cents to yield 0.547 percent and the benchmark 10-year falling 57 Canadian cents to yield 1.238 percent.
