Markets Roundup
- United States may challenger layoffs decrease to 31.517 k vs previous 36.081 k
- Greece mar retail sales yy increase to 1.5 % vs previous -0.4 % (revised from -0.1 %)
- Italy may CPI (EU norm) prelim yy increase to 1.1 % (forecast 1 %)
- Italy may consumer price prelim yy increase to 1.1 % (forecast 0.8 %)
- Italy may CPI (EU norm) prelim mm increase to 0.4 % (forecast 0.3 %)
- Italy may consumer price prelim mm increase to 0.4 % (forecast 0.2 %)
- Eurozone may HICP ex F,E,A&T flash yy increase to 1.1 % (forecast 1 %) vs previous 0.7 %
- Eurozone Apr unemployment rate decrease to 8.5 % (forecast 8.4 %) vs previous 8.6 % (revised from 8.5 %)
- Eurozone may HICP ex f&e flash yy increase to 1.3 % (forecast 1.3 %)
- Eurozone may HICP flash yy increase to 1.9 % (forecast 1.6 %)
- United Kingdom Apr m4 money supply increase to 0.2 % vs previous -1.4 %
- United Kingdom Apr BOE consumer credit increase to 1.832 bln gb (forecast 1.3 bln gb) vs previous 0.425 bln gb (revised from 0.254 bln gb)
- United Kingdom Apr mortgage lending decrease to 3.894 bln gb (forecast 3.8 bln gb) vs previous 3.959 bln gb (revised from 3.968 bln gb)
- United Kingdom Apr mortgage approvals decrease to 62.455 k (forecast 63 k) vs previous 62.802 k (revised from 62.914 k)
- Spain mar current account balance increase to 0.9 bln eu vs previous -0.45 bln eu
- Italy Apr unemployment rate increase to 11.2 % (forecast 10.9 %) vs previous 11.1 % (revised from 11 %)
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department releases personal income figures for April, which is expected to stay steady at 0.3 percent.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of April. The index is expected to rise at an annualized rate of 2 percent after staying unchanged in the prior month, while core PCE is likely to have increased 0.1 percent after rising 0.2 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Personal spending is likely to rise 0.4 percent in the month of April, after posting similar gains in March.
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 6,000 to a seasonally adjusted 228,000 for the week ended May 25, while continuing claims for the week ended May 18 is expected to rise to 1.749 million from a previous reading of 1.741 million.
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that gross domestic product increased at a 1.8 percent annual rate in the first quarter after rising at a 1.7 percent pace in the previous quarter. While on monthly basis, it is likely to rise 0.2 percent in March, after posting a growth of 0.4 percent in February.
- (0945 ET/1345 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions rose to 58.0 in May from 57.6 prior month.
- (1000 ET/1400 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 0.4 percent in April, unchanged from previous month reading.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending May 25.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending May 25.
Key Events Ahead
- (1220 ET/1620 GMT) Bank of Canada Deputy Governor Sylvain Leduc will give an economic progress report.
- (1245 ET/1645 GMT) Federal Reserve Bank of Atlanta President Raphael W. Bostic's speech.
- (1300 ET/1700 GMT) Federal Reserve Board Governor Lael Brainard is likely to speak at the Forecaster's Club of New York luncheon in New York.
FX Beat
DXY: The dollar index slumped to a 1-week low ahead of a second day of meeting between U.S. Secretary of State Mike Pompeo and high-ranking North Korean official Kim Yong Chol in New York. The greenback against a basket of currencies trades 0.2 percent down at 93.89, having touched a low of 93.72, its lowest since May 24. FxWirePro's Hourly Dollar Strength Index stood at -90.30 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro rose, extending previous session gains, as Italian parties made renewing efforts to form a government and avert elections, trying to ease concerns about the impact of a political crisis. Additionally, data showing Eurozone inflation jumped by far more than expected in May on higher energy costs, boosted the upside in the major. The European currency traded 0.2 percent up at 1.1683, having touched a low of 1.1510 on Tuesday, its lowest since Jul. 20. FxWirePro's Hourly Euro Strength Index stood at -22.35 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1728, a break above targets 1.1789 (May 23 High). On the downside, support is seen at 1.1600, a break below could drag it till 1.1518 (May 30 Low).
USD/JPY: The dollar attempted to regain the 109.00 handle, supported by receding anxiety over the political situation in Italy. Moreover, a modest uptick in the U.S. Treasury bond yields dented the Japanese Yen's safe-haven demand. The major was trading 0.05 percent up at 108.93, having hit a low of 108.11 on Tuesday, its lowest since May 8. FxWirePro's Hourly Yen Strength Index stood at -9.61 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. unemployment benefit claims, pending home sales, personal consumption expenditures- price index and Fed officials' speeches. Immediate resistance is located at 109.13 (5-DMA), a break above targets 109.72 (21-DMA). On the downside, support is seen at 108.11 (May 29 Low), a break below could take it lower 107.65 (Apr. 23 Low).
GBP/USD: Sterling rallied above the 1.3300 handle as British consumers and businesses turned more confident in May, indicating that the economy is recovering from a weak start to 2018. Moreover, weakness in the dollar across the board supported the upside in the British pound. The major traded 0.3 percent up at 1.3324, having hit a low of 1.3204 on Tuesday, it’s lowest since Nov. 28. FxWirePro's Hourly Sterling Strength Index stood at -21.11 (Neutral) by 1000 GMT. Immediate resistance is located at 1.3368 (10-DMA), a break above could take it near 1.3457 (21-DMA). 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 0.1 percent up at 87.63 pence, having hit a high of 86.97 pence on Tuesday, it’s highest since Apr. 27.
USD/CHF: The Swiss franc rallied to an over 1-month peak as the greenback weakened on news that Washington will announce plans to impose tariffs on EU steel and aluminum imports later in the day. The major trades 0.3 percent down at 0.9862, having touched a low of 0.9847 earlier, it’s lowest since Apr. 26. FxWirePro's Hourly Swiss Franc Strength Index stood at 77.78 (Slightly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9940 (10-DMA) and any break above will take the pair to next level till 1.0018 (May 18 High). The near-term support is around 0.9816 (Apr. 26 Low) and any close below that level will drag it till 0.9782 (Apr. 25 Low).
Equities Recap
European shares advanced, while euro extended previous session rebound on renewed efforts from politicians in Italy to form a government.
The pan-European STOXX 600 index gained 0.1 percent at 385.71 points, while the FTSEurofirst 300 index surged 0.1 percent to 1,510.09 points.
Britain's FTSE 100 trades 0.1 percent up at 7,698.45 points, while mid-cap FTSE 250 rallied 0.3 percent to 20,888.62 points.
Germany's DAX fell 0.5 percent at 12,718.92 points; France's CAC 40 trades 0.1 percent higher at 5,432.28 points.
Commodities Recap
Crude oil declined on expectations of a rise in U.S. crude inventories and the prospect of OPEC and other producers could increase output at a meeting in June. International benchmark Brent crude was trading 0.1 percent down at $77.33 per barrel by 1033 GMT, having hit a low of $74.46 on Monday, its lowest since May 8. U.S. West Texas Intermediate was trading 0.6 percent down at $67.80 a barrel, after falling as low as $65.83 on Monday, its lowest since Apr. 17.
Gold prices rose, as the dollar plunged from 6-1/2-month highs hit earlier this week and on concerns over U.S.-China trade. Spot gold rose 0.2 percent to $1,304.13 per ounce by 1035 GMT, having hit a high of $1,307.65 on Friday, its highest price level since May 15, but was down about 0.7 percent for the month, its second straight monthly decline. U.S. gold futures for June delivery were 0.3 percent higher at $1,305.80 per ounce
Treasuries Recap
The U.S. Treasuries plunged, after a streak of gains, as investors wait to watch the country’s initial jobless claims, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasuries jumped 2-1/2 basis points to 2.86 percent, the super-long 30-year bond yields rose 1 basis point to 3.02 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points higher at 2.42 percent.
The German bunds slumped during European session after Eurozone’s consumer price inflation (CPI) for the month of May beat market expectations, besides, the cooling down of Italy’s political situation. The German 10-year bond yields, which move inversely to its price, jumped 3-1/2 basis points to 0.38 percent, the yield on the 30-year note rose nearly 1 basis point to 1.09 percent and the yield on short-term 2-year traded 2-1/2 years higher at -0.66 percent.
The New Zealand bonds jumped at the time of closing despite a slight improvement in Italy’s political situation after attempts were seen to form a coalition government so that a snap election can be avoided. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, fell 1-1/2 basis points to 2.74 percent, the yield on the long-term 20-year note slid 1/2 basis point to 3.26 percent and the yield on short-term 2-year closed 2 basis points lower at 1.86 percent.
The 10-year Japanese government bond yields continued to recover during late Asian session as global risk appetite started to improve with the political situation in Italy cooling down, coupled with a lower-than-expected industrial production for the month of April, which further weighed on bond prices. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose nearly 1 basis point to 0.03 percent, the yield on the long-term 30-year note climbed 1-1/2 basis points to 0.71 percent and the yield on short-term 2-year traded tad higher at -0.14 percent.
The Australian government bonds sunk during Asian session, tracking a similar movement in the United States counterpart and other global peers after the political situation in Italy started to improve, with attempts being made to form a coalition government after days of indecisiveness. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, jumped 2 basis points to 2.65 percent, the yield on the long-term 30-year Note hovered around 3.18 percent and the yield on short-term 3-year traded 1 basis point up at 1.98 percent.
