Market Roundup
- EUR/USD +0.18%, USD/JPY -0.12%, GBP/USD +0.32%, EUR/GBP -0.15%
- DXY -0.21%, DAX -0.51%, FTSE -0.38%, Brent +0.38%, Gold +0.66%
- Euro zone businesses end second quarter with slower growth -PMI
- Eurozone Jun Markit Flash Manufacturing PMI, 57.3 vs forecast 56.8, previous 57.0
- Eurozone Jun Markit Flash Service PMI, 54.7 vs forecast 56.2, previous 56.3
- Eurozone Jun Markit Flash Composite PMI, 55.7 vs forecast 56.6, previous 56.9
- German private sector growth slows more than expected in June-PMI
- German Jun Markit Manufacturing Flash PMI, 59.3 vs forecast 59.0, previous 59.5
- German Jun Markit Service Flash PMI, 53.7 vs forecast 55.5, previous 55.4
- German Jun Markit Composite Flash PMI, 56.1 vs forecast 57.3, previous 57.4
- ECB seeks greater power over clearing supervision
- Sterling weakness strengthens case for UK rate rise - BoE's Forbes
- House of Saud unites behind king's son - for now
- BOJ June Tankan set to show improved business confidence; CPI seen rising
- "Fair" or "vague"? EU sizes up May's Brexit rights offer
- Oil edges up, but still set for biggest H1 fall since 1990s
- Gold firms on weak dollar, risk aversion
- China's money rates fall, thanks to improved cash conditions
- Japan June flash Manufacturing PMI 52.0, May 53.1, new orders growth slowest in 7-mos
- BPCE prices Y58.1 bln 5/7/10/15-year 1st social samurais via Daiwa et al – IFR
Economic Data Ahead
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that annual inflation rate cooled to 1.5 percent in May from 1.6 percent in April, taking it further away from the Bank of Canada’s 2 percent target. While core consumer price index remained flat in April.
- (0900 ET/1300 GMT) Mexico's annual retail sales are likely to have gained 3.0 percent in April after rising 6.1 percent in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. Preliminary Manufacturing PMI for the month of June. The index likely edged up to 53.0 after posting a final reading of 52.7 in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index rose to 53.7 in June after printing a final reading of 53.6 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 53.9 in the prior month.
- (1000 ET/1400 GMT) National Association of Realtors is expected to report that U.S. existing home sales gained 5.5 percent to an annual rate of 600,000 million units in May after falling 11.4 percent to 597, 000 million units last month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (1115 ET/1515 GMT) Federal Reserve Bank of St. Louis President James Bullard is scheduled to give a presentation on the U.S. economy and monetary policy before the Illinois Bankers Association 126th Annual Conference, in Nashville, Tennessee.
- (1240 ET/1640 GMT) Cleveland Federal Reserve Bank President Loretta Mester speaks on "Community Development" before the June 22-23 2017 Policy Summit hosted by the Reserve Banks of Cleveland, Philadelphia, and Minneapolis, in Cleveland, Ohio.
- (1415 ET/1815 GMT) The Federal Reserve Board Governor Jerome Powell speaks on "Central Clearing and Liquidity" before the Federal Reserve Bank of Chicago Symposium on Central Clearing, in Chicago, Illinois.
FX Beat
DXY: The dollar eased across the board as investors cautiously awaited the U.S. inflation data due next week for clues on the Federal Reserve's likely interest rate policy. The greenback against a basket of currencies traded 0.1 percent down at 97.40, having touched a high of 97.87 earlier in the week, it’s highest since May 19. FxWirePro's Hourly Dollar Strength Index stood at -46.93 (Neutral) by 1000 GMT.
EUR/USD: The euro gained on the back of better-than-expected manufacturing reports from across the Eurozone. However, the upside appears limited as investors’ attention shifted towards the U.S. manufacturing and services PMIs, followed by new homes sales data and speeches by St. Louis Fed J. Bullard, Cleveland Fed L. Mester and J. Powell for further momentum. The European currency traded 0.1 percent up at 1.1167, having touched a low of 1.1119 on Tuesday, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at 22.22 (Neutral) by 1000 GMT. Intraday major resistance is around 1.12129 (Jun 19 high) and any break above will take the pair till 1.1230/1.12950. On the lower side, any break below 1.1100 confirms minor weakness, a decline till 1.1050/1.1000 likely.
USD/JPY: The dollar tumbled for the fourth straight session, as a decline in equity markets triggered a fresh bout of risk aversion. The major traded 0.1 percent down at 111.21, having hit a high of 111.78 on Tuesday, its highest since May 26. FxWirePro's Hourly Yen Strength Index stood at -37.18 (Neutral) by 1000 GMT. The pair is facing support at 108 and any break below will drag the pair down till 106.80. On the higher side, near term resistance is around 111.80 (100 -MA) will take it to next level till 112.12/113 likely.
GBP/USD: Sterling rallied above the 1.2700 handle as PM Theresa May seems to have softened her position on rights of EU citizens living in the UK. Moreover, Bank of England policymaker Kristin Forbes's comments on rate hike also supported the upside. Sterling traded 0.4 percent up at 1.2729, drifting away from a low of 1.2589 hit on Wednesday, its weakest since Apr 18. FxWirePro's Hourly Sterling Strength Index stood at 20.67 (Neutral) by 1000 GMT. On the lower side, the major support is around 1.2565 (200- day MA) and any break below will drag the pair till 1.2470 (61.8% retracement of 1.21088 and 1.30470)/1.2400 likely. The near-term minor resistance is around 1.2780 (21- EMA) and any break above will take it till 1.2820/1.2870. Against the euro, the pound traded 0.2 percent up at 87.69 pence, having hit a 1-week low of 88.45 the prior day.
USD/CHF: The Swiss franc rose to a 9-day high as greenback eased across the board amid risk-off market sentiment. The major trades down at 0.9714, having touched a low of 0.9685 earlier, its lowest since June 14. FxWirePro's Hourly Swiss Franc Strength Index stood at -25.13 (Neutral) by 1000 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 after tumbling for four consecutive days as a retreat in crude oil prices from multi-month lows supported the bid tone around the major. The Aussie trades 0.3 percent up at 0.7565, having hit a low of 0.7535 the day before, it’s weakest since June 14. FxWirePro's Hourly Aussie Strength Index stood at -138.59 (Highly Bearish) by 1000 GMT. On the lower side, near term support is around 0.7530 (200- day MA) and any break below will drag the pair till 0.7440 (61.8% retracement of 0.7320 and 0.7635)/0.7385 (61.8% retracement of 0.71599 and 0.77493) /0.7325/0.7300. The near term resistance is around 0.7650 and any break above targets 0.7700/0.7745.
Equities Recap
European shares slumped, dragged lower by commodity-related stocks, while euro gained on the back of robust Eurozone PMI data.
The pan-European STOXX 600 index dropped 0.1 percent to 388.05 points, while the FTSEurofirst 300 index lost 0.2 percent to 1,525.30 points.
Britain's FTSE 100 trades 0.4 percent down at 7,408.77 points, while mid-cap FTSE 250 declined 0.05 percent to 19,647.84 points.
Germany's DAX fell 0.3 percent at 12,760.98 points; France's CAC 40 trades 0.2 percent lower at 5,273.37 points.
Commodities Recap
Crude oil prices edged up, recovering from this week's steep losses, but were on course for its worst first-half decline in almost two decades as production cuts failed to reduce oversupply. International benchmark Brent crude was trading 0.2 percent up at $45.34 per barrel by 0941 GMT, having hit a low of $44.34 on Wednesday, its weakest since Nov. 14. U.S. West Texas Intermediate traded 0.2 percent up at $42.83 a barrel, after falling as low as $42.03 on Wednesday, its lowest since Nov 8.
Gold prices rallied to a fresh 1-week high as the dollar softened and geopolitical events supported the metal's safe-haven appeal. Spot gold was 0.4 percent up at $1,255.71 per ounce by 0949 GMT but was nearly flat for the week. U.S. gold futures for August delivery climbed 0.5 percent to $1,255.10 per ounce.
Treasuries Recap
The U.S. Treasuries ahead of FOMC members Bullard and Mester’s speech. The yield on the benchmark 10-year Treasury, rose nearly 1 basis point to 2.16 percent, the super-long 30-year bond yields hovered around 2.72 percent and the yield on short-term 2-year note traded flat at 1.34 percent.
The UK gilts traded flat as investors remain sidelined in the absence of any major trading activity. The yield on the benchmark 10-year gilts, hovered around 1.03 percent, the super-long 30-year bond yields flat at 1.67 percent and the yield on the short-term 2-year traded tad higher at 0.23 percent.
The Eurozone periphery bonds traded mixed Friday after reading a higher-than-expected rise in the German manufacturing PMI for the month of June, released earlier today. The benchmark German 10-year bond yields, which moves inversely to its price, fell 1 basis point to 0.26 percent, the French 10-year bond yields, also slipped 1 basis point to 0.59 percent, Irish 10-year bond yield plunged nearly 7 basis points to 0.64 percent, Italian equivalent slumped 2 basis points to 1.89 percent, Netherlands 10-year bonds yield traded 1-1/2 basis points lower at 0.45 percent, Portuguese equivalents plummeted nearly 4-1/2 basis points to 2.89 percent and the Spanish 10-year yields traded nearly flat at 1.36 percent.
The Japanese government bonds traded flat in a silent trading session that witnessed data of least significance. The benchmark 10-year bond yield, hovered around 0.05 percent, the long-term 30-year bond yields traded flat at 0.78 percent and the yield on the short-term 2-year note traded steady at -0.10 percent.
The New Zealand bonds ended on the upside after the Reserve Bank of New Zealand (RBNZ) remained unchanged in its monetary policy decision, revealed early today while maintaining a balanced outlook of the economy. At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, slumped 3-1/2 basis points to 2.75 percent, the yield on 7-year note plunged 3 basis points to 2.66 percent and the yield on short-term 2-year note traded 2-1/2 points lower at 1.96 percent.
The Australian bonds remained tad lower Friday as investors booked in profits on the last trading day of the week amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 1-1/2 basis points to 2.39 percent, the yield on 15-year note plunged 2 basis points to 2.74 percent and the yield on short-term 2-year traded 1 basis point lower at 1.68 percent.
