Market Roundup
- 'Trump formula'? N.Korea says still open to talks after summit cancelled
- U.S. Commerce's Ross to visit China for trade talks in early June
- Trump threat of auto tariffs opposed by auto industry, Republicans
- EU dismisses latest British ideas on Ireland after Brexit
- Japan May CPI Core Tokyo YY 0.5%, f'cast 0.6%, last 0.6%
- Japan's 2017 external assets fall, still biggest creditor nation
- Australia's bank note printers heed wage call - and strike
- U.S. stock funds attract $3.7 bln in latest week -Lipper
- U.S. muni bond funds post $232.8 mln in inflows-Lipper
- Foreign CB US debt holdings -$4.770 bln to $3.382 tln May 24 week
- Treasuries -$8.218 bln to $3.026 tln, agencies $4.513 mln to $280.033 bln
Economic Data Ahead
- (0400 ET/0800 GMT) Germany May Ifo Business Climate New, f'cast 102.0, last 102.1
- (0400 ET/0800 GMT) Germany May Ifo Current Conditions New, f'cast 105.5, last 105.7
- (0400 ET/0800 GMT) Germany May Ifo Expectations New, f'cast 98.5, last 98.7
- (0430 ET/0830 GMT) Great Britain Q1 GDP 2nd Release YY, f'cast 1.2%, last 1.2%
- (0430 ET/0830 GMT) Great Britain Q1 GDP 2nd Release QQ, f'cast 0.1%, last 0.1%
- (0430 ET/0830 GMT) Great Britain Q1 Business Invest YY Prelim, last 2.6%
Key Events Ahead
- N/A Federal Reserve Banks of Dallas and Atlanta hold a two-day conference
- (0300 ET/0700 GMT) Bank of France Governor Francois Villeroy speaks in Paris
- (0815 ET/1215 GMT) BoE's Carney: Panelist at the Riksbank Anniversary Conference
- (0920 ET/1320 GMT) Fed's Powell participates in panel the Sveriges Riksbank Conference, Stockholm
- (0940 ET/1340 GMT) ECB's Coeure participates in a high-level panel at Sveriges Riksbank's 350th anniversary celebration in Stockholm
- (1145 ET/1545 GMT) Fed's Bostic, Evans and Kaplan participate in "Session VIII: Policymaker Panel" before the Federal Reserve Banks of Dallas and Atlanta "Technology-Enabled Disruption: Implications for Business, Labor Markets and Monetary Policy" conference
- (1520 ET/1920 GMT) Bundesbank president Jens Weidmann speaks in Stockholm
FX Beat
DXY: The dollar index rose after North Korea said it was open to resolve issues with the United States. The greenback against a basket of currencies trades 0.2 percent up at 93.92, having touched a high of 94.19 on Wednesday, its highest since Dec. 12. FxWirePro's Hourly Dollar Strength Index stood at 32.60 (Neutral) by 0500 GMT.
EUR/USD: The euro eased after the European Central Bank minutes released yesterday showed the central bank is in no hurry to change its current monetary policy stance, while the Fed is seen hiking rates three more times this year. The European currency traded 0.1 percent down at 1.1710, having touched a low of 1.1675 on Wednesday, its lowest since Nov. 14. FxWirePro's Hourly Euro Strength Index stood at -83.35 (Slightly Bearish) by 0400 GMT. Investors’ attention will remain on the German IFO- Business Assessment figures and ECB Coeure speech, ahead of the Michigan consumer sentiment index and Fed officials' speeches. Immediate resistance is located at 1.1751 (5-DMA), a break above targets 1.1829 (May 22 High). On the downside, support is seen at 1.1669 (Oct. 10 Low), a break below could drag it till 1.1622 (Nov. 10 Low).
USD/JPY: The dollar rose after falling to an over 2-week low in the previous session on news that U.S. President Donald Trump called off a planned summit with North Korean leader Kim Jong Un. However, the upside was limited as minutes of the Federal Reserve's last policy meeting published on Wednesday were perceived as more dovish than initially expected. The major was trading 0.3 percent up at 109.53, having hit a low of 108.95 on Thursday, its lowest since May 8. FxWirePro's Hourly Yen Strength Index stood at 85.38 (Slightly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Michigan consumer sentiment index and Fed officials' speeches. Immediate resistance is located at 110.24 (10-DMA), a break above targets 110.50. On the downside, support is seen at 108.99 (May 9 Low), a break below could take it lower 108.64.
GBP/USD: Sterling consolidated near recent lows as investors awaited Britain's preliminary GDP figures for the first quarter, which are expected to hold at 0.1 percent, and the year-on-year GDP numbers are forecast at 1.2 percent, in-line with the previous reading. Markets attention will also remain on Bank of England Mark Carney's speech at the Society of Professional Economists' annual dinner in London for fresh clues on the BoE monetary policy outlook. Sterling traded 0.1 percent down at 1.3367, having hit a low of 1.3305 on Wednesday, it’s lowest since Dec. 12. FxWirePro's Hourly Sterling Strength Index stood at -44.17 (Neutral) by 0400 GMT. Investors’ focus will remain on the UK prelim gross domestic product, total business investments, and BoE Governor Carney's speech, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3462 (10-DMA), a break above could take it near 1.3548 (21-DMA). On the downside, support is seen at 1.3305 (May 23 Low), a break below targets 1.3270. Against the euro, the pound was trading 0.05 percent down at 87.59 pence, having hit a low of 87.96 pence on Wednesday, it’s lowest since May 15.
AUD/USD: The Australian dollar declined after the U.S. President Trump canceled North Korea summit triggering risk-off sentiment across financial markets. The Aussie trades 0.1 percent up at 0.7566, having hit a high of 0.7605 On Tuesday; it’s highest since Apr. 25. FxWirePro's Hourly Aussie Strength Index stood at 17.13 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7536 (10-DMA), a break below targets 0.7472 (May 1 Low). On the upside, resistance is located at 0.7605 (May 22 High), a break above could take it near 0.7682 (Apr. 23 High).
NZD/USD: The New Zealand dollar declined on expectations that the Reserve Bank of New Zealand would hold off on any rate increases until well into 2020, while some traders anticipated chances of a further rate cut. The major trades 0.05 percent down at 0.6923, having touched a high of 0.6974 on Tuesday, its highest level since May 11. FxWirePro's Hourly Kiwi Strength Index was at -95.31 (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 0.6974, a break above could take it near 0.7030. On the downside, support is seen at 0.6835, a break below could drag it below 0.6805.
Equities Recap
Asian shares eased amid increasing geopolitical concerns after U.S. President Donald Trump called off a key summit with North Korea.
MSCI's broadest index of Asia-Pacific shares outside Japan edged down in early trade.
Tokyo's Nikkei rose 0.2 percent to 22,478.79 points, Australia's S&P/ASX 200 index eased 0.05 percent to 6,035.10 points and South Korea's KOSPI plunged 0.2 percent to 2,460.12 points.
Shanghai composite index fell 0.2 percent to 3,149.02 points, while CSI300 index was trading 0.05 percent down at 3,826.26 points.
Hong Kong’s Hang Seng was trading 0.4 percent lower at 30,640.98 points. Taiwan shares added 0.5 percent to 10,942.30 points.
Commodities Recap
Crude oil prices declined as Russia hinted it may gradually increase output, after having withheld supplies in concert with producer cartel OPEC since 2017. International benchmark Brent crude was trading 0.1 percent down at $78.65 per barrel by 0430 GMT, having hit a high of $80.47 last week, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.05 percent down at $70.65 a barrel, after rising as high as $72.28 last Thursday, its highest since Nov. 2014.
Gold prices eased after rising to an over 1-week peak above $1,300 level in the previous session as U.S. President Donald Trump's decision to call off a meeting with North Korean leader Kim Jong Un triggered safe-haven buying. Spot gold declined 0.2 percent at $1,301.68 per ounce at 0436 GMT, having hit a high of $1,306.50 on Thursday, its highest price level since May 15. U.S. gold futures for June delivery fell 0.2 percent to $1,301.80 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.989 percent higher by 0.009 bps, while 5-year yield was 0.012 bps up at 2.827 percent.
The Japanese government bonds gained during late Asian session on a rise in risk aversion after the United States’ President Donald Trump called off the talks with North Korea amid a continued decline in the Turkish Lira that added fuel to the ongoing global uncertainties. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad lower at 0.04 percent, the yield on the long-term 30-year note slipped 1/2 basis point to 0.74 percent and the yield on short-term 2-year hovered around -0.13 percent.
The Australian government bonds rallied on last trading day of the week, with persistent global trade worries compounded when Washington suddenly cancelled a nuclear summit with North Korea, pushing the 10-year bond yield to a 1-week low. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 1-1/2 basis points to 2.792 percent, the yield on the long-term 30-year Note also dipped 1-1/2 basis points to 3.295 percent and the yield on short-term 2-year down 1 basis point to 2.012 percent.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The Canadian two-year rose 6 Canadian cents to yield 1.994 percent and the 10-year climbed 32 Canadian cents to yield 2.407 percent.
