Market Roundup
- EUR/USD flat, USD/JPY +0.11%, GBP/USD +0.13%, EUR/GBP flat
- DXY -0.02%, DAX +0.82%, FTSE +0.55%, Brent +0.36%, Gold -0.16%
- Van rams worshippers leaving London mosque, injuring 10
- Britain seeks "special" EU ties as Brexit talks start
- Real victory will be in 5 years, says Macron camp after election win
- UK households turn gloomier as inflation bites -survey
- Japan May trade deficit Y203.4 bln, Y76.0 bln surplus eyed
- Japan Exports +14.9% y/y, imports +17.8%, +16.1% and +14.8% eyed
- Japan Exports best since ’15, to US +11.6%, China +23.9%, Asia +16.8%
- Japan May crude oil imports -13.5% y/y, LNG +13.0%, thermal coal -10.8%
- China's month-on-month home price growth remains robust in May
- Oil prices slip as U.S. rigs rise, demand growth falters
Economic Data Ahead
- No major economic releases scheduled
Key Events Ahead
- (0800 ET/1200 GMT) Federal Reserve Bank of New York President William Dudley participates in roundtable with local business leaders at the Holiday Inn in Plattsburgh.
- N/A U.S. Commerce Secretary Wilbur Ross hosts the "2017 Select USA Investment Summit" featuring GE Chair and CEO Jeff Immelt, General Motors CEO Mary Barra, and Oracle CEO Safra Catz among others.
- (1430 ET/1830 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.35 bn)
- (1615 ET/2015 GMT) Canadian Finance Minister Bill Morneau will hold a press conference.
- (1900 ET/2300 GMT) Chicago Fed President Charles Evans is expected to speak on current economic conditions or monetary policy before the Money Marketeers of New York University, in New York.
FX Beat
DXY: The dollar eased versus its major peers as investors refrained from taking big positions ahead of New York Fed President William Dudley's participation in roundtable with local business leaders later in the session. The greenback against a basket of currencies traded flat at 97.14, having touched a high of 97.56 last week, it’s highest since May 30. FxWirePro's Hourly Dollar Strength Index stood at -62.68 (Bearish) by 1000 GMT.
EUR/USD: The euro consolidated below the 1.1200 handle as investors focus shifted on today’s start of the Brexit talks between European Union and United Kingdom officials. The European currency traded flat at 1.1198, having touched a low of 1.1132 on Thursday, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at -88.41 (Slightly Bearish) by 1000 GMT. On the higher side, major resistance is around 1.1300 and any break will take the pair to next level till 1.1360/1.1435 in the short term. The near term support is around 1.1100 and any break above will take it down till 1.1050/1.1000.
USD/JPY: The dollar steadied above the 111.00 handle as investors await comments from a key Federal Reserve official for clues on whether recent economic strength can be sustained. The major traded 0.1 percent up at 111.05, rebounding from a low of 108.81 touched on Wednesday, its lowest since Apr. 20. FxWirePro's Hourly Yen Strength Index stood at -90.22 (Slightly Bearish) 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 111.87 (100 -MA) will take the pair to next level till 112.12/113 likely.
GBP/USD: Sterling rose, extending gains for the third consecutive session, as receding fears of 'hard Brexit', in wake of the UK snap election result, and last week's hawkish BoE MPC vote continued to extend support to the British currency. Sterling traded 0.2 percent up at 1.2798, having hit a low of 1.2635 earlier in the month, its weakest since Apr 18. FxWirePro's Hourly Sterling Strength Index stood at 39.79 (Neutral) by 1000 GMT. On the lower side, the major support is around 1.2614 and any break below will drag the pair till 1.2585/ (200- day MA)/1.2470 (61.8% retracement of 1.21088 and 1.30470) likely. The near term minor resistance is around 1.2840 (50% retracement of 1.30476 and 1.26359) and any break above will take it till 1.2885 (200 MA)/1.2978 (Jun 8 high). Against the euro, the pound traded up at 87.57 pence, having hit a 1-week high of 87.19 on Friday.
USD/CHF: The Swiss franc rose, extending previous session gains, as investors refrained from placing big bets ahead of Fed officials' speech. The major trades 0.3 percent down at 0.9701, having touched a high of 0.9770 on Thursday, its highest since May 30. FxWirePro's Hourly Swiss Franc Strength Index stood at -35.45 (Neutral) by 1000 GMT. Technically the pair has been facing strong resistance around 0.9808 (May 30 high) and any close above will take it 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 traded near 2-1/2-month highs hit last week after RBA governor Philip Lowe expressed confidence economic activity will gain momentum, citing a recovery in global growth and strength in employment. The Aussie trades flat at 0.7613, having hit a high of 0.7635 on Wednesday, it’s strongest since Apr 3. FxWirePro's Hourly Aussie Strength Index stood at 122.09 (Highly Bullish) 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 0.7485 (21 – EMA)/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 rebounded as the retail sector recovered from last week's losses, while the dollar steadied against the Japanese yen ahead of New York Fed President William Dudley's speech.
The pan-European STOXX 600 index climbed 0.6 percent to 390.82 points, while the FTSEurofirst 300 index gained 0.6 percent to 1,536.54 points.
Britain's FTSE 100 trades 0.4 percent up at 7,498.23 points, while mid-cap FTSE 250 rallied 0.03 percent to 19,823.11 points.
Germany's DAX rose 0.7 percent at 12,838.89 points; France's CAC 40 trades 0.8 percent higher at 5,305.88 points.
Commodities Recap
Crude oil prices rebounded from recent lows on the back of an OPEC-led initiative to tighten the market by cutting production, despite an expansion in U.S. drilling that has helped to maintain high global supplies. International benchmark Brent crude was trading 0.5 percent up at $47.48 per barrel by 1000 GMT, having hit a low of $46.75 on Thursday, its weakest since May 5. U.S. West Texas Intermediate traded 0.5 percent up at $44.85 a barrel, after falling as low as $44.22 on Thursday, its lowest since May 5.
Gold prices declined to touch a near four-week low as the dollar steadied, with investors awaiting comments from a key U.S. Federal Reserve official for clues on the strength of the economy. Spot gold was down 0.2 percent to $1,251.17 per ounce by 1006 GMT, having hit a low of $1,249.15 earlier in the session, its lowest since May 24. U.S. gold futures for August delivery fell 0.4 percent to $1,251 an ounce.
Treasuries Recap
The U.S. Treasuries gained as investors remain geared up to witness a host of speeches by the Federal Open Market Committee (FOMC) members throughout this week. The yield on the benchmark 10-year Treasury, fell 1 basis point to 2.15 percent, the super-long 30-year bond yields also slipped nearly 1 basis point to 2.77 percent and the yield on short-term 2-year note traded flat at 1.32 percent.
The UK gilts behaved heterogeneously as investors wait to observe the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be held on June 20. Also, the country’s 30-year auction, due on June 22, will provide detailed direction to the debt market. The yield on the benchmark 10-year gilts, rose nearly 1 basis point to 1.02 percent, the super-long 30-year bond yields slumped nearly 1-1/2 basis points to 1.70 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 0.17 percent.
The Eurozone periphery bonds remained mixed as investors wait to watch the benchmark German 30-year auction, scheduled to be held on June 21. Also, the country’s manufacturing PMI for the month of June, due for release on June 23 will provide further direction in the money market. The benchmark German 10-year bond yields, rose nearly 1 basis point to 0.28 percent, the French 10-year bond yields, hovered around 0.63 percent, Irish 10-year bond yield slumped 2 basis points to 0.68 percent; however, Italian equivalent plunged nearly 4 basis points to 1.95 percent, Netherlands 10-year bonds yield traded flat at 0.48 percent, Portuguese equivalents nose-dived nearly 6 basis points to 2.85 percent and the Spanish 10-year yields traded nearly 3 basis points lower at 1.43 percent.
The Japanese government bonds traded modestly lower ahead of the Bank of Japan’s latest monetary policy meeting minutes, besides Governor Haruhiko Kuroda’s speech, both scheduled on June 21. The benchmark 10-year bond yield, hovered around 0.05 percent, the long-term 30-year bond yields traded flat at 0.81 percent and the yield on the short-term 2-year note traded nearly 1 basis point higher at -0.10 percent.
The New Zealand bonds remained mixed at the time of closing as investors are eyeing the GlobalDairyTrade (GDT) price auction, scheduled to be held on June 20. In addition, the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, due on late Wednesday will add further direction to the debt market. At the time of closing, the yield on the benchmark 10-year bond, fell 1 basis point to 2.78 percent, the yield on 7-year note hovered around 2.68 percent and the yield on short-term 2-year note jumped 2-1/2 basis points to 1.98 percent.
The Australian bonds traded flat at the start of the trading week, tracking mild movement in the U.S. counterpart amid a softer trading week. Also, investors are eyeing the Reserve Bank of Australia’s (RBA) monetary policy meeting minutes, for the month of June, scheduled to be released on June 20 for further direction in the debt market. The yield on the benchmark 10-year Treasury note, rose close to 1 basis point to 2.43 percent, the yield on 15-year note hovered around 2.78 percent while the yield on short-term 2-year traded 1 basis point higher at 1.69 percent.
