Market Roundup
- EUR/USD 0.39%, USD/JPY -0.22%, GBP/USD 0.28%, EUR/GBP 0.15%
- DXY -0.37%, DAX 0.12%, FTSE -0.14%, Brent 0.57%, Gold 0.19%
- EU GDP Revised YY, 2.5%, 2.5% forecast, 2.5% previous
- Germany Industrial Orders MM, -2.5%, 0.8% forecast, -0.9% previous
- France Current Account, -1.1 bln, -1.3 bln previous
- France Trade Balance, EUR, SA, -4.95 bln, -5.30 bln forecast, -5.26 bln previous
- Italy Retail Sales NSA YY, -4.60%, 2.90% previous
- Great Britain Halifax House Prices MM, 1.5%, 1.0% forecast, -3.1% previous
- Great Britain HalifaxHousePrice 3M/YY, 1.9%, 1.9% forecast, 2.2% previous
- China says it does not want U.S. trade frictions to escalate
- UK ministers to meet to hammer out agreement on Brexit backstop
- No set timing on Greek bond issue plans - officials
- What Brexit? Investors warm to UK stocks as M&A surges
- Venezuela struggles with huge oil export backlog
- Putin, on living standards drive, tells Russians economy set for growth
- Gold inches up as euro gains against dollar
- Oil rises as reality dawns over Venezuela's export crisis
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 4,000 to a seasonally adjusted 225,000 for the week ended Jun. 1, while continuing claims for the week ended May 25 is expected to rise to 1.738 million from previous reading of 1.726 million.
- (1000 ET/1400 GMT) The Investor's Business Daily (IBD)/ TechnoMetrica Institute of Policy and Politics (TIPP) will release U.S. Economic Optimism index for the month of June. The indicator rose to 53.6 in May.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending June 1.
- (1030 ET/1430 GMT) The Bank of Canada will release its financial system review.
- (1500 ET/1900 GMT) The U.S. Federal Reserve is likely to report that consumer credit rose to $13.75 billion in April from $11.62 billion the month before.
Key Events Ahead
- (0900 ET/1300 GMT) Canadian Prime Minister Justin Trudeau will hold a news conference with visiting French President Emmanuel Macron ahead of a summit of the Group of Seven leading industrialized nations on June 8-9.
- (1000 ET/1500 GMT) Bank of England's Dave Ramsden speaks at Barclays Inflation Conference - London
- (1015 ET/1515 GMT) Bank of Canada's Stephen Poloz and Carolyn Wilkins hold press conference - Ottawa
- N/A U.S. President Donald Trump is likely to meet Japanese Prime Minister Shinzo Abe at the White House.
- N/A Former Federal Reserve Chairman Ben Bernanke participates in conversation, "Lessons Learned from 10 Years of Quantitative Easing" before the American Enterprise Institute, in Washington.
FX Beat
DXY: The dollar index plunged to a 3-week trough as investors remained concerned over widening disagreements on trade between U.S. President Trump and the remaining six G7 members. The greenback against a basket of currencies trades 0.4 percent down at 93.29, having touched a low of 93.21 earlier, its lowest since May 17. FxWirePro's Hourly Dollar Strength Index stood at -63.14 (Neutral) by 1000 GMT.
EUR/USD: The euro rallied to an over 3-week peak as investors raised their bets that the European Central Bank at its policy meeting next week will indicate a winding down of its bond-buying programme by the end of this year. The European currency traded 0.4 percent up at 1.1825, having touched a high of 1.1838 earlier, its highest since May 16. FxWirePro's Hourly Euro Strength Index stood at 76.37 (Slightly Bullish) by 1000 GMT. Immediate resistance is located at 1.1854 (May 16 High), a break above targets 1.1896 (May 5 High). On the downside, support is seen at 1.1707 (5-DMA), a break below could drag it till 1.1673 (10-DMA).
USD/JPY: The dollar slumped against the Japanese yen, as investors remained cautious ahead of a summit of the Group of Seven leaders this weekend, where President Donald Trump looks set to clash with his counterparts. The major was trading 0.2 percent down at 109.98, having hit a high of 110.26 on Wednesday, its highest since May 23. FxWirePro's Hourly Yen Strength Index stood at -88.75 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. unemployment benefit claims data. Immediate resistance is located at 110.28, a break above targets 110.85 (May 17 Low). On the downside, support is seen at 109.61 (5-DMA), a break below could take it lower 108.95 (May 24 Low).
GBP/USD: Sterling rallied to a fresh 2-week peak, supported by broad-based dollar weakness, however, concerns over Brexit negotiations capped gains. Moreover, a report showing that the British house prices rebounded more than expected in May underpinned the British pound. Sterling traded 0.2 percent up at 1.3439, having hit a high of 1.3472, it’s highest since May 22. FxWirePro's Hourly Sterling Strength Index stood at 37.22 (Neutral) by 1000 GMT. Immediate resistance is located at 1.3483 (May 21 High), a break above could take it near 1.3527 (May 18 High). On the downside, support is seen at 1.3351 (5-DMA), a break below targets 1.3253 (Jun. 1 Low). Against the euro, the pound was trading 0.2 percent down at 87.92 pence, having hit a low of 88.09 pence on Friday, it’s highest since May 15.
USD/CHF: The Swiss franc surged to an over 1-month peak as the greenback tumbled across the board ahead of the G7 meeting this weekend and summit between Trump and N. Korea leader Kim Jong-Un next week. The major trades 0.5 percent down at 0.9813, having touched a low of 0.9804, it’s lowest since Apr. 25. FxWirePro's Hourly Swiss Franc Strength Index stood at -62.83 (Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9935 (May 30 High) and any break above will take the pair to next level till 1.0018 (May 18 High). The near-term support is around 0.9782 (Apr. 25 Low) and any close below that level will drag it till 0.9739 (Apr. 23 Low).
Equities Recap
European shares surged as the banking sector posted their best performance, while the euro continued to rally on expectations that the European Central Bank may soon start to wind down its stimulus.
The pan-European STOXX 600 index gained 0.1 percent at 387.33 points, while the FTSEurofirst 300 index surged 0.05 percent to 1,512.45 points.
Britain's FTSE 100 trades 0.1 percent down at 7,701.04 points, while mid-cap FTSE 250 fell 0.1 percent to 21,158.03 points.
Germany's DAX rose 0.2 percent at 12,857.63 points; France's CAC 40 trades 0.4 percent higher at 5,477.99 points.
Commodities Recap
Crude oil prices declined on concerns over surging U.S. production, despite a plunge in exports from Venezuela. International benchmark Brent crude was trading 0.1 percent down at $75.65 per barrel by 0949 GMT, having hit a low of $73.80 on Tuesday, its lowest since May 8. U.S. West Texas Intermediate was trading 0.1 percent down at $64.92 a barrel, after falling as low as $64.26 on Tuesday, its lowest since Apr. 10.
Gold prices rose, extending previous session gains, as investors awaited for meetings of G7 leaders this weekend and the U.S.-North Korea summit next week. Spot gold was 0.2 percent up at $1,298.81 per ounce by 1007 GMT, having hit a high of $1,307.65 last month, its highest price level since May 15. U.S. gold futures for August delivery were largely unchanged at $1,301.50 per ounce.
Treasuries Recap
The U.S. Treasuries lost ground, 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 basis points to 2.99 percent, the super-long 30-year bond yields also surged 2 basis points to 3.15 percent and the yield on the short-term 2-year traded nearly 2 basis points higher at 2.52 percent.
The German bunds slumped during European session after Italy’s political woes calmed down, following the formation of a new government, which weighed on debt prices. The German 10-year bond yields, which move inversely to its price, jumped nearly 4-1/2 basis points to 0.50 percent, the yield on the 30-year note climbed 5 basis points to 1.18 percent and the yield on short-term 2-year traded flat at -0.62 percent.
The Japanese government bonds remained range-bound as investors remained sidelined in a muted trading week ahead of the country’s first quarter 2018 gross domestic product (GDP) data, scheduled to be released today by 23:50GMT which shall add further direction to the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note slid 1/2 basis point to 0.72 percent and the yield on short-term 2-year remained flat at -0.12 percent.
The Australian government bonds plunged as U.S. Treasury yields climbed toward 3 percent level as Eurozone bonds sell off. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 7-1/2 basis points to 2.838 percent, the yield on the long-term 30-year Note jumped 7 basis points to 3.355 percent and the yield on short-term 2-year up 2-1/2 basis points to 2.106 percent.
