Market Roundup
- EUR/USD -0.03%, USD/JPY -0.14%, GBP/USD -0.21%, EUR/GBP 0.21%
- DXY 0.02%, DAX -1.23%, FTSE -0.31%, Brent 0.97%, Gold 0.15%
- Italy Trade Balance EU, 1.077 bln, 0.698 bln previous
- Italy Global Trade Balance, 2.938 bln, 4.531 bln previous
- British PM's Brexit plans set for Lords defeat, teeing up showdown
- UK households see fastest income growth in at least 9 years - IHS Markit
- China's c.bank says bond market risks in check as it steps up monitoring
- Gold steady as strong dollar counters concerns over U.S.-China trade spat
- Oil down on China tariffs, expected OPEC supply rise
- Magnitude 6.1 quake in Japan's Osaka area kills three, stops factories
Economic Data Preview
- (1000 ET/1400 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index rose to 70 in June, after posting a similar increase in May.
Key Events Ahead
- (0835 ET/1235 GMT) Federal Reserve Bank of New York President William Dudley gives opening remarks before the "Reforming Culture and Behavior in the Financial Services Industry: Progress, Challenges, and the Next Generation of Leaders" conference hosted by the Federal Reserve Bank of New York.
- (0900 ET/1300 GMT) Federal Reserve Bank of New York President William Dudley participates in "Panel One: Finance, Culture and Society" - New York City.
- (1245 ET/1645 GMT) Bank of Canada Deputy Governor Lynn Patterson will speak at an event hosted by the Investment Industry Association of Canada and the Institute of International Finance in Toronto.
- (1300 ET/1700 GMT) Atlanta Federal Reserve President Raphael Bostic speaks on the economic outlook and monetary policy before the Rotary Club of Savannah, in Savannah.
- (1500 ET/1900 GMT) European Central Banks's Mario Draghi speaks at ECB Forum on Central Banking - Sintra, Portugal.
- (1600 ET/2000 GMT) Incoming Fed New York President John Williams’s closing remarks at event - New York City.
- N/A OMFIF convenes panel discussion to analyze role of ECB and future of euro area – London.
- N/A Discussion with ECB's Jurgen Stark and Jose Manuel Gonzalez-Paramo, former members – London.
- N/A John Williams begins tenure as president of Federal Reserve Bank of New York.
FX Beat
DXY: The dollar index eased, extending losses for the second straight session, after U.S. President Donald Trump triggered trade tensions by going ahead with tariffs on Chinese imports. The greenback against a basket of currencies trades 0.05 percent down at 94.77, having touched a high of 95.13 on Friday, its highest since Nov. 2017. FxWirePro's Hourly Dollar Strength Index stood at 50.47 (Bullish) by 1100 GMT.
EUR/USD: The euro rose, extending previous session gains, amid escalating threat of a global trade war and a dispute in Germany's governing coalition. The European currency traded 0.1 percent up at 1.1616, having touched a low of 1.1543 on Friday, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at -10.85 (Neutral) by 1100 GMT. Immediate resistance is located at 1.1650, a break above targets 1.1706 (21-DMA). 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 tumbled after rising to multi-week highs in the prior session, amid escalating US-China trade tensions after US President Donald Trump approved to impose a 25 percent tariff on around $50 billion of Chinese imports and prompted China to retaliate with a similar-sized set of levies. The major was trading 0.2 percent down at 110.44, having hit a high of 110.90 on Friday, its highest since May 23. FxWirePro's Hourly Yen Strength Index stood at 49.44 (Neutral) by 1100 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. NAHB Housing Market Index. Immediate resistance is located at 111.18 (May 22 High), a break above targets 111.39 (May 21 High). On the downside, support is seen at 110.09 (10-DMA), a break below could take it lower 109.88 (21-DMA).
GBP/USD: Sterling declined, hovering towards a 3 weeks lows hit in the previous session ahead of a Bank of England policy meeting this week and another expected parliamentary confrontation over the government's Brexit plan. The major traded 0.2 percent down at 1.3253, having hit a low of 1.3211 on Friday; it’s lowest since May 29. FxWirePro's Hourly Sterling Strength Index stood at -1.66 (Neutral) b1100 GMT. Immediate resistance is located at 1.3331 (5-DMA), a break above could take it near 1.3439 (June 8 High). On the downside, support is seen at 1.3204 (May 29 Low), a break below targets 1.3169 (Nov. 17 Low). Against the euro, the pound was trading 0.3 percent down at 87.65 pence, having hit a high of 87.17 pence on Friday, it’s highest since May 30.
USD/CHF: The Swiss franc edged up after falling to a near 1-month low earlier in the day amid escalating US-China trade tensions. The major trades 0.2 percent down at 0.9952, having touched a high of 0.9990, it’s highest since May. 21. FxWirePro's Hourly Swiss Franc Strength Index stood at 108.16 (Highly Bullish) by 1100 GMT. On the higher side, near-term resistance is around 1.0001 (May 21 High) and any break above will take the pair to next level till 1.0033 (May 17 High). The near-term support is around 0.9903 (5-DMA) and any close below that level will drag it till 0.9875 (10-DMA).
Equities Recap
European shares slumped for a second straight session amid worries over a trade war between the United States and China.
The pan-European STOXX 600 index plunged 1.4 percent at 385.31 points, while the FTSEurofirst 300 index eased 0.9 percent to 1,506.39 points.
Britain's FTSE 100 trades 0.5 percent down at 7,608.52 points, while mid-cap FTSE 250 fell 0.3 percent to 20,947.73 points.
Germany's DAX declined 1.3 percent at 12,836.27 points; France's CAC 40 trades 1.2 percent lower at 5,436.69 points.
Commodities Recap
Crude oil prices rose by more than 1 percent after falling to a 1-1/2 month low ahead of an OPEC meeting that is widely expected to increase global crude supply. International benchmark Brent crude was trading 1.2 percent up at $73.96 per barrel by 1046 GMT, having hit a low of $72.44 earlier, its lowest since May 2. U.S. West Texas Intermediate was trading 0.5 percent up at $64.69 a barrel, after falling as low as $63.62 earlier, its lowest since April 10.
Gold prices rebounded after falling to a 5-1/2-month low in the previous session, amid an ongoing trade dispute between the United States and China. Spot gold was trading 0.1 percent at $1,280.80 per ounce at 1054 GMT, having touched its weakest since late December at $1,275.01 an ounce on Friday. U.S. gold futures for August delivery were up 0.3 percent at $1,281.70 per ounce.
Treasuries Recap
The German bunds jumped during European session ahead of the European Central Bank (ECB) President Mario Draghi’s speech, scheduled to be held later today and the 30-year auction, due to be held later in the week. The German 10-year bond yields, which move inversely to its price, fell 1 basis point to 0.39 percent, the yield on 30-year note remained tad lower at 1.16 percent and the yield on short-term 3-year too slipped slightly to -0.54 percent.
The UK gilts surged as investors wait to watch the country’s 10-year auction and the Bank of England’s (BoE) monetary policy meeting, scheduled to be held on June 20 and June 21 by 09:45GMT and 11:00GMT respectively. The yield on the benchmark 10-year gilts, slumped 1-1/2 basis points to 1.41 percent, the super-long 30-year bond yields slid 1 basis point to 1.76 percent and the yield on the short-term 2-year too traded nearly 1 basis point lower at 0.71 percent.
The Japanese government bonds remained flat during late Asian session even as exports hit a 4-month high during the month of May, with investors now eyeing the 30-year auction and the Bank of Japan’s (BoJ) April monetary policy meeting minutes, scheduled for June 19 and 20 respectively. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.03 percent, the yield on the long-term 30-year note flattened at 0.71 percent and the yield on short-term 2-year too traded flat at -0.13 percent.
The Australian government bonds rallied on first trading day of the week Monday after the threat of a US-China trade war intensified over the weekend. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 3-1/2 basis points to 2.668 percent (nearly 3-week low), the yield on the long-term 30-year Note dipped 4 basis points to 3.185 percent and the yield on short-term 2-year down 4 basis points to 2.002 percent.
