Market Roundup
- Japan April domestic corporate goods price index +0.1% m/m, +2.0% y/y, as eyed.
- In concession, Trump will help China's ZTE 'get back into business'.
- Rhetoric over U.S. exit from Iran deal rises amid threat of sanctions.
- Pompeo - U.S. to lift sanctions if North Korea dismantles nuclear weapons program.
- Malaysia's bourse bounces back from early plunge on shock poll result.
- UK consumer spending continues to fall in April – Visa.
- UK employers plan to raise pay by more over coming year – CIPD.
- Chinese insurers turn shadow lenders for higher returns.
Economic Data Ahead
- No major data is expected today.
Key Events Ahead
- N/A ECB's Villeroy is to open a conference on central banking at the Bank of France.
- (0245 ET/0645 GMT) Fed's Mester speaks before the Global Interdependence Center, Paris.
- (0415 ET/0815 GMT) Carney and ECB's Praet speak at BoE's Gender and Career Progression Conference.
- (0745 ET/1145 GMT) ECB's Praet participates in a lunchtime MNI Connect Roundtable in London.
- (0940 ET/ 1340 GMT) Fed's Bullard gives presentation before CoinDesk's Consensus 2018, NY.
- (1100 ET/1500 GMT) ECB's Lautenschlager speaks in Copenhagen, Denmark.
- (1215 ET/1615 GMT) ECB's Praet speaks in London, United Kingdom.
- (1345 ET/1745 GMT) ECB's Coeure speaks at the Geneva conference in Geneva, Switzerland.
- ESM bond, terms to be determined.
- UK DMO 2071 Gilt syndication via Barclays, DB, GS, NatWest Markets.
FX Recap
USD: The dollar index against a basket of six major currencies was down 0.15 percent at 92.402. The index hit a 4-1/2-month high of 93.416 last Wednesday, as a rise in U.S. Treasury yields highlighted the wide interest rate gap between the United States and other countries.
EUR/USD: The euro was 0.2 percent higher at $1.1957, having recovered last week from $1.1823, its weakest since December 22. Still, the common currency was expected to face political headwinds, limiting its bounce against the U.S. currency. A consistent close below $1.1938 will drag the parity down towards key supports around $1.1822 and $1.1745 levels respectively. Alternatively, current upside movement will drag the parity higher towards key resistances around $1.1978, $1.2084, $1.2240 and $1.2345 marks respectively.
USD/JPY: The Japanese yen trades almost flat against U.S. dollar. It made intraday high at 109.44 and low at 109.20 levels. A sustained close above 109.86 is required to take the parity higher towards key resistance around 112.96 marks. Alternatively, a daily close below 109.02 will drag the parity down towards key supports around 108.54, 106.71 and 105.32 marks respectively.
GBP/USD: The British pound moves in stiff boundaries against U.S. dollar and currently trading around $1.3560 mark. Intraday bias remains neutral till the time pair holds key support at $1.3516 mark. A sustained close below requires to drag the parity down towards key support around $1.3310 mark. On the other side, key resistances are seen at $1.3665 and $1.3792 levels respectively.
AUD/USD: The Australian dollar was 0.2 percent higher at $0.7565 after rallying back from an 11-month low of $0.7413 plumbed on last Wednesday. On the top side, key resistance was seen at $0.7603 mark while immediate support was seen at $0.7455 mark.
NZD/USD: The New Zealand dollar's bounce was more modest against U.S. dollar. The kiwi was nearly flat at $0.6952 after sliding to a five-month low of $0.6903 on Thursday after the Reserve Bank of New Zealand took a dovish-sounding monetary stance.
Equities Recap
Japan’s Nikkei was trading 0.43 pct higher at 22,857.55 points.
South Korea’s kospi was trading 0.02 pct higher at 2,477.86 points.
Shanghai composite index to open up 0.1 pct at 3,167.04 points and China's CSI300 index to open up 0.4 pct at 3,886.87 points.
Australia's S&P/ASX 200 index was up 0.22 pct at 6,129.90 points in early trade.
Hong Kong’s Hang seng was trading 1.28 pct higher at 31,520.50 points.
Taiwanese stock was trading around 0.96 percent higher at 10,963.75 points.
India’s NSE Nifty was trading around 0.17 percent higher at 10,824.80 points while BSE Sensex was trading 0.23 points higher at 35,616.88 points.
Commodities Recap
Oil prices on Monday fell away from last week's multi-year highs as a relentless rise in U.S. drilling activity pointed to increased output, while resistance emerged in Europe and Asia to U.S. sanctions against major crude exporter Iran. Brent crude futures were at $76.65 per barrel at 0415 GMT, down 47 cents, or 0.6 percent from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $70.41 a barrel, down 29 cents, or 0.4 percent. Brent and WTI last week reached their highest since November 2014 at $78 and $71.89 per barrel respectively, as markets expect Iran's oil exports to fall significantly once U.S. sanctions bite later this year.
Gold prices rose on Monday on the back of a subdued dollar as investors considered the prospects of fewer interest rate hikes in the United States this year. Spot gold was up 0.2 percent at $1,320.45 per ounce as of 0330 GMT, after marking the highest since April 26 at $1,325.96 in the previous session. U.S. gold futures for June delivery were little changed at $1,320.50 per ounce.
Treasuries Recap
Australian government bonds gained on first trading day of the week Monday following a drop in U.S. Treasury yield. Markets also await the Reserve Bank of Australia (RBA) May meeting minutes scheduled for this week.
The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 2 basis points to 2.772 percent, the yield on the long-term 30-year Note also dipped 4 basis points to 3.263 percent and the yield on short-term 2-year down 2 basis points to 2.007 percent by 03:30 GMT.
The Japanese government bonds slipped on the first trading day of the week Monday amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, remained tad higher at 0.04 percent, the yield on the long-term 30-year note rose 1/2 basis point to 0.74 percent and the yield on short-term 2-year traded flat at -0.13 percent by 05:00GMT.
