Market Roundup
- EUR/USD 0.33%, USD/JPY 0.13%, GBP/USD 0.27%, EUR/GBP -0.02%
- DXY -0.1%, DAX 0.32%, FTSE 0.66%, Brent 1.22%, Gold 0.12%
- EZ Markit Manufacturing Flash PMI, 55, 55 forecast, 55.5 previous
- EZ Markit Service Flash PMI, 55, 53.7 forecast, 53.8 previous
- EZ Markit Composite Flash PMI, 54.8, 53.9 forecast, 54.1 previous
- Germany Markit Manufacturing Flash PMI, 55.9, 56.2 forecast, 56.9 previous
- Germany Markit Service Flash PMI, 53.9 forecast, 52.1 forecast, 52.1 previous
- Germany Markit Composite Flash PMI, 54.2, 53.4 forecast, 53.4 previous
- France GDP QQ Final, 0.2%, 0.2% forecast, 0.2% previous
- France Markit Manufacturing Flash PMI, 53.1, 53.9 forecast, 54.4 previous
- France Markit Service Flash PMI, 56.4, 54.3 forecast, 54.3 previous
- Euro zone Q2 growth likely decent but trade concerns rising
- Chinese media says US has 'delusions' as impact of trade war spreads
- OPEC moves towards raising oil supply as Iran softens stance
- Gold prices edge up as dollar retreats from 11-mth peak
- Oil prices rise as OPEC meets
Economic Data Ahead
- (0830 ET/1230 GMT) Statistics Canada is expected to report that retail sales remained unchanged in April while excluding autos, retail sales are likely to have risen 0.5 percent, after declining 0.2 percent in the previous month.
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that annual inflation rate rose 2.5 percent in May from 2.2 percent in April, keeping it closer to the Bank of Canada’s 2 percent target. While core consumer price index remained unchanged in March..
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of June. The index is likely edged up to 56.5 after posted a final reading of 56.4 in the previous month.
- (0945 ET/1345 GMT) Markit Economics releases preliminary U.S. service PMI for June, which is expected to have decreased to 56.4 from a final reading of 56.8 in May.
- (0945 ET/1345 GMT) Markit Economics will release preliminary U.S. composite PMI for the month of June. The index posted a final reading of 56.6 in the prior month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0900 ET/1300 GMT) Federal Reserve Bank of New York Executive Vice President Beverly Hirtle gives opening remarks before the conference, "The Effects of Post-Crisis Banking Reforms" hosted by the New York Fed.
- (1250 ET/1650 GMT) Former Federal Reserve governor Daniel Tarullo speaks at a conference - New York City
- N/A ECB's Luis de Guindos participates at ECOFIN meeting - Luxembourg City
- N/A Economic and Financial Affairs Council meets – Luxembourg
FX Beat
DXY: The dollar index slumped to a 1-week low as the White House officials remain divided over a harder action on China, keeping in mind the widening trade gap between the United States and China. The greenback against a basket of currencies trades 0.3 percent down at 94.62, having touched a high of 95.53 on Thursday, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at -120.35 (Highly Bearish) by 0900 GMT.
EU/USD: The euro rallied to a 1-week peak after data showed Eurozone economic growth likely gained momentum in the second quarter with private businesses growing faster than expected in June. Reports of faster overall expansion in June, including in Germany and France will likely support the views of the policymakers at the European Central Bank. The European currency traded 0.3 percent up at 1.1640, having touched a low of 1.1508 on Thursday, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at 98.13 (Slightly Bullish) by 0900 GMT. Immediate resistance is located at 1.1664 (10-DMA), a break above targets 1.1700. On the downside, support is seen at 1.1510 (May 29 Low), a break below could drag it till 1.1434 (July 2017 Low).
USD/JPY: The dollar extended gains above the 110.00 handle as investor anxiety over a possible full-blown trade eased this week. Moreover, revived risk-on sentiment in the equity markets supported the upside in the pair. The major was trading 0.2 percent up at 110.15, having hit a low of 109.55 on Tuesday, its lowest since June 11. FxWirePro's Hourly Yen Strength Index stood at -76.26 (Slightly Bearish) by 0900 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. flash Markit manufacturing, service and composite figures. Immediate resistance is located at 110.90 (June 15 High), a break above targets 111.08 (June 18 High). On the downside, support is seen at 109.55 (June 19 Low), a break below could take it lower 109.19 (June 8 Low).
GBP/USD: Sterling surged to a 1-week peak as yesterday's Bank of England meeting revived expectations of a rate hike this year. However, the upside appeared limited as worries about a slowdown in the economy and desperate attempts by British diplomats to secure a deal to exit the European Union in March weighed on the investor sentiments. The major traded 0.4 percent up at 1.3289, having hit a low of 1.3102 the day before; it’s lowest since Nov 14. FxWirePro's Hourly Sterling Strength Index stood at 136.79 (Highly Bullish) 0900 GMT. Immediate resistance is located at 1.3345, a break above could take it near 1.3389. On the downside, support is seen at 1.3220 (5-DMA), a break below targets 1.3150 (June 19 Low). Against the euro, the pound was trading 0.05 percent up at 87.50 pence, having hit a low of 88.01 pence on Wednesday, it’s lowest since June 14.
USD/CHF: The Swiss franc advanced to a 1-week high as the greenback retreated from 11-month peak amid lingering concerns over the trade dispute between the United States and China. The major trades 0.2 percent down at 0.9902, having touched a high of 0.9990 on Monday, it’s highest since May. 21. FxWirePro's Hourly Swiss Franc Strength Index stood at -3.79 (Neutral) by 0900 GMT. On the higher side, near-term resistance is around 0.9985 (5-DMA) and any break above will take the pair to next level till 0.9990 (June 18 High). The near-term support is around 0.9880 and any close below that level will drag it till 0.9850 (May 29 Low).
Equities Recap
European shares advanced, boosted by strong financial stocks and better-than-expected euro zone economic data, while the sterling surged to a 1-week peak as Bank of England meeting revived expectations of a rate hike this year.
The pan-European STOXX 600 index rose 0.6 percent at 383.12 points, while the FTSEurofirst 300 index rallied 0.6 percent to 1,497.53 points.
Britain's FTSE 100 trades 0.7 percent up at 7,607.15 points, while mid-cap FTSE 250 surged 0.7 percent to 20,879.26 points.
Germany's DAX rose 0.4 percent at 12,561.55 points; France's CAC 40 trades 0.7 percent higher at 5,357.24 points.
Commodities Recap
Crude oil prices rallied more than 1 percent as OPEC struggled to agree a deal to increase output to compensate for losses in production amid rising global demand. International benchmark Brent crude was trading 1.4 percent up at $74.08 per barrel by 0938 GMT, having hit a low of $72.44 Monday, its lowest since May 2. U.S. West Texas Intermediate was trading 0.9 percent up at $66.35 a barrel, after falling as low as $63.62 on Monday, its lowest since April 10.
Gold prices steadied after touching a 6-month trough in the previous session, as the U.S. dollar retreated from an 11-month peak on profit-taking. Spot gold was 0.2 percent up at $1,270.05 an ounce by 0940 GMT, having touched its lowest since Dec. 19 at $1,260.84 on Thursday and was heading for a 0.7 percent decline for the week. U.S. gold futures for August delivery were 0.1 percent higher at $1,271.50 per ounce.
Treasuries Recap
The U.S. 10-year Treasuries slumped during European trading hours after mild signs of cooling trade war between the United States and China were observed, as White House officials remain divided over a harder action on the latter, keeping in mind the widening trade gap between the two major economies of the world. The yield on the benchmark 10-year Treasuries jumped 1-1/2 basis points to 2.91 percent, the super-long 30-year bond yields surged nearly 1-1/2 basis points to 3.05 percent and the yield on the short-term 2-year traded 1 basis point higher at 2.55 percent.
The German bunds slumped during European session even as the country’s manufacturing PMI for the month of June came in lower than market expectations. However, eurozone’s PMIs cheered investors, thus lending sluggishness to bond prices. The German 10-year bond yields, which move inversely to its price, jumped nearly 2 basis points to 0.34 percent, the yield on 30-year note remained tad higher at 1.12 percent and the yield on short-term 3-year traded 1 basis point up at -0.59 percent.
The New Zealand bonds closed range bound after the country’s gross domestic product (GDP) data for the first quarter of this year, met market expectations, albeit remaining lower than the previous reading in Q4 2017. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, rose nearly 1/2 basis point to 2.98 percent, the yield on the long-term 20-year note closed tad higher at 3.30 percent and the yield on short-term 2-year closed nearly flat at 1.92 percent.
The Japanese 10-year government bonds traded in a tight range after the country’s national consumer price inflation (CPI) for the month of May met market expectations, although remaining far from the Bank of Japan’s (BoJ) 2 percent target. In addition, Japan’s manufacturing PMI for the month of May recovered, adding to more sluggishness in bond prices. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, slipped slightly to 0.03 percent, the yield on the long-term 30-year hovered around 0.71 percent and the yield on short-term 2-year traded flat at -0.13 percent.
The Australian government bonds gained on last trading day of the week with the U.S. Treasuries amid a backdrop of lingering concerns related to escalating trade tensions between the US and China. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 3 basis points to 2.655 percent, the yield on the long-term 30-year Note dipped 4-1/2 basis points to 3.153 percent and the yield on short-term 2-year down 3 basis points to 2.044 percent.
