Market Roundup
- EUR/USD -0.11%, USD/JPY +0.37%, GBP/USD +0.02%, EUR/GBP -0.15%
- DXY +0.15%, DAX +0.76%, FTSE +0.70%, Brent +0.59%, Gold -1.23%
- UK PM May strikes deal to get Northern Irish DUP support for minority government
- German shoppers drive business morale to 'jubilant' record high
- Germany June Ifo Business Climate, 115.1 vs forecast 114.5, previous 114.6
- Germany June Ifo Current Conditions, 124.1 vs forecast 123.3, previous 123.2 revised 123.3
- Germany June Ifo Expectations, 1-6.8 vs forecast 106.4, last 106.5
- UK consumer lending growth in May slowest since 2015 - BBA
- Fed's Williams sees gradual rate hikes as key to further U.S. growth
- Japanese airbag maker Takata files for bankruptcy, gets U.S. sponsor
- U.S. home lenders see leaner times ahead -Fannie Mae survey
- Gold slips, market cautious ahead of U.S. data this week
- Oil rises 1 pct on weaker dollar, but U.S. drilling drags
- China's bank regulator cracks down on graft in deposit-raising
- Trump, Modi seek rapport despite friction on trade, immigration
- BoJ PB June 15-16 Min: Optimistic on econ but CPI lagging, even-keel good
- BoJ Min: Premature to talk about exit at this time
- Japan May corporate service price index -0.1% m/m, +0.7% y/y to 103.7
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of May. The index stood at 0.49 in the prior month.
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have decreased 0.6 percent in May after declining 0.8 percent in April, while non-defense capital goods orders excluding aircraft are likely to have risen 0.3 percent after falling 0.07 percent the prior month.
- (1030 ET/1430 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of June. The index posted a rise of 17.2 percent in the previous month.
- (1745 ET/2145 GMT) The Statistics New Zealand releases its trade balance data for the month of May. The economy posted an annual trade deficit of $3.480 billion in April.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac securities (max $1.35 bn)
- (1330 ET/1730 GMT) European Central Bank (ECB) President Mario Draghi speaks in Lisbon and Sintra.
FX Beat
DXY: The dollar rallied across the board following a rebound in the U.S. Treasury yields ahead of Fed Chair Yellen's speech later in the week. The greenback against a basket of currencies traded 0.1 percent up at 97.37, having touched a high of 97.87 last week, it’s highest since May 19. FxWirePro's Hourly Dollar Strength Index stood at -76.70 (Slightly Bearish) by 1100 GMT.
EUR/USD: The euro eased from recent highs as a moderate rebound in the U.S. Treasury yields underpinned the demand for the greenback. Markets seem to have ignored the results from the German IFO for the month of June, as attention remained on the U.S. data releases and the subsequent speech by ECB President Mario Draghi. The European currency traded 0.1 percent down at 1.1180, having touched a high of 1.1208 on Friday, its highest since June 19. FxWirePro's Hourly Euro Strength Index stood at 16.77 (Neutral) by 1100 GMT. Immediate resistance is located at 1.1208 (Previous Session High), a break above targets 1.1228 (June 15 High). On the downside, support is seen at 1.1158 (5-DMA), a break below could drag it near 1.1117.
USD/JPY: The dollar rallied against the Japanese yen, as the U.S. Treasury yields rebounded ahead of a series of speeches by FOMC members throughout this week, especially from the Federal Reserve Chair Janet Yellen. The major traded 0.3 percent up at 111.64, having hit a high of 111.72 earlier, its highest since June 21. FxWirePro's Hourly Yen Strength Index stood at -102.04 (Highly Bearish) by 1100 GMT. Immediate resistance is located at 111.78 (June 20 High), a break above targets 111.95 (May 25 High). On the downside, support is seen at 110.82 (10-DMA), a break below could take it near 110.67 (21-DMA).
GBP/USD: Sterling advanced to its highest in a week as the UK PM May’s Conservatives party finally managed to secure a deal with the Democratic Unionist Party (DUP) to form a government. The major traded 0.1 percent up at 1.2730, having hit a high of 1.2759 earlier, its highest since June 19. FxWirePro's Hourly Sterling Strength Index stood at 186.28 (Highly Bullish) by 1100 GMT. Immediate resistance is located at 1.2785 (50.0% retrace of 1.2978 and 1.2589), a break above could take it near 1.2830 (38.2% retrace). On the downside, support is seen at 1.2712 (10-DMA), a break below targets 1.2687 (5-DMA). Against the euro, the pound traded 0.2 percent up at 87.84 pence, having hit a 1-week low of 88.45 last week.
USD/CHF: The Swiss franc eased after rising to an over 1-week high in the previous session as the greenback rebounded across the board. The major trades 0.4 percent up at 0.9727, having touched a low of 0.9675 on Friday, its lowest since June 14. FxWirePro's Hourly Swiss Franc Strength Index stood at -118.47 (Highly Bearish) by 1100 GMT. Technically the pair has been facing strong resistance around 0.9808 (May 30 high) and any close above will take the pair till 0.9845/0.9900. On the lower side, major support is around 0.9615 and any break below will drag it down till 0.9580/0.9520 (161.8% retracement of 0.9614 and 0.97393).
AUD/USD: The Australian dollar rebounded from recent lows as crude oil prices steadied after tumbling to 7-month lows. The Aussie trades 0.1 percent up at 0.7571, having hit a low of 0.7535 on Thursday, it’s weakest since June 14. FxWirePro's Hourly Aussie Strength Index stood at -31.31 (Neutral) by 1100 GMT. Immediate support is seen at 0.7535 (June 22 Low), a break below targets 0.7519 (June 9). On the upside, resistance is located at 0.7600, a break above could take it near 0.7635 (June 14 High).
Equities Recap
European shares rose following a rally in banking stocks, while sterling touched a 1-week high as UK PM May's Conservative party and DUP reached a deal.
The pan-European STOXX 600 index rallied 0.8 percent to 390.67 points, while the FTSEurofirst 300 index climbed 0.8 percent to 1,536.55 points.
Britain's FTSE 100 trades 0.7 percent up at 7,474.45 points, while mid-cap FTSE 250 gained 0.3 percent to 19,736.95 points.
Germany's DAX rose 0.8 percent at 12,833.44 points; France's CAC 40 trades 1.02 percent higher at 5,319.56 points.
Commodities Recap
Crude oil prices rallied for a third straight session, as speculators took advantage of last week's decline to seven-month lows, however, an increase in U.S. supply capped gains. International benchmark Brent crude was trading 0.2 percent up at $45.76 per barrel by 1024 GMT, having hit a low of $44.34 on Wednesday, its weakest since Nov. 14. U.S. West Texas Intermediate traded 0.3 percent up at $43.27 a barrel, after falling as low as $42.03 on Wednesday, its lowest since Nov 8.
Gold prices tumbled by more than 1 percent to hit their lowest in 6-weeks, as the dollar strengthened ahead of a series of U.S. economic data due this week. Spot gold declined 1.1 percent at $1,242.71 per ounce by 1032 GMT, having hit a low of $1235.26, its lowest since May 16. U.S. gold futures for August delivery slipped 1.1 percent to $1,243.10 per ounce.
Treasuries Recap
The U.S. Treasuries slumped ahead of a host of speeches by FOMC members throughout this week, especially from the Federal Reserve Chair Janet Yellen, scheduled on June 27. The yield on the benchmark 10-year Treasury, jumped little over 1-1/2 basis points to 2.16 percent, the super-long 30-year bond yields also surged 1-1/2 basis points to 2.72 percent and the yield on the short-term 2-year note too traded nearly 1-1/2 basis points higher at 1.35 percent.
The UK gilts remained downbeat at the start of the trading week as investors remain focused to watch the Bank of England’s (BoE) Financial Stability Report (FSR) and Governor Mark Carney’s speech, both scheduled on June 27. Also, the release of Q1 GDP by the end of this week, will add detailed direction to the debt market. The yield on the benchmark 10-year gilts, rose nearly 1/2 basis point to 1.00 percent, the super-long 30-year bond yields also climbed 1/2 basis point to 1.68 percent and the yield on the short-term 2-year traded nearly 2 basis points higher at 0.25 percent.
The Eurozone periphery bonds rallied as investors wait to watch the European Central Bank (ECB) President Mario Draghi’s speech later in the day. However, the market has largely shrugged off the benchmark Germany’s stronger Ifo business climate index, released today. The benchmark German 10-year bond yields, traded tad lower at 0.25 percent, the French 10-year bond yields, also slipped nearly 1 basis point to 0.60 percent, Irish 10-year bond yield plunged also fell 1 basis point to 0.63 percent, Italian equivalent slumped 1-1/2 basis points to 1.89 percent, Netherlands 10-year bonds yield traded almost flat at 0.45 percent, Portuguese equivalents plummeted 1 basis point to 2.89 percent while the Spanish 10-year yields traded 1/2 basis point higher at 1.38 percent.
The Japanese government bonds traded modestly lower, following hopes of a slight rise in the country’s consumer price inflation for the month of May, scheduled to be released on June 30. In addition, the Bank of Japan’s (BoJ) Governor Kuroda’s speech, due to be held on June 28 will add further clarity to the debt market. The benchmark 10-year bond yield, hovered around 0.05 percent, the long-term 30-year bond yields remained tad higher at 0.81 percent and the yield on the short-term 3-year note traded 1 basis point higher at -0.08 percent.
The New Zealand bonds closed on a tad higher note as investors wait to watch the country’s trade balance data, for the month of May, scheduled to be released on June 27. At the time of closing, the yield on the benchmark 10-year bond, slumped 1-1/2 basis points to 2.78 percent, the yield on 7-year note also slipped 1-1/2 basis points to 2.69 percent and the yield on short-term 2-year note traded flat at 1.99 percent.
The Australian bonds remained flat at the start of the week as investors remain sidelined in any major trading activity amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note, hovered around 2.38 percent, the yield on 15-year note traded flat at 2.74 percent and the yield on short-term 2-year traded 1 basis point also remained steady at 1.67 percent
