Market Roundup
•Canada GDP (QoQ) (Q1) 1.4%,2.3% previous
•Canada GDP Annualized (QoQ) (Q1) 5.6%,6.7% forecast,9.6% previous
•Canada GDP (MoM) 1.1%, 1.0% forecast, 0.4% previous
•US ISM May Manufacturing New Orders Index 67.0, 64.3 previous
•US ISM May ISM Manufacturing Prices 88.0, 89.8 forecast, 89.6 previous
•US ISM May Manufacturing PMI 61.2,60.9, 60.7 previous
•US Apr Construction Spending (MoM) 0.2%,0.5% forecast, 0.2% previous
•US ISM May Manufacturing Employment 50.9, 61.5 forecast, 55.1 previous
•US Dallas May Fed Mfg Business Index 34.9, 37.3 previous
•US 3-Month Bill Auction 0.020%,0.015% previous
• US 6-Month Bill Auction0.035%, 0.030%
• New Zealand GlobalDairyTrade Price Index-0.9%, - 0.2%
Looking Ahead – Economic data aheadt(GMT)
• 22:45 New Zealand Terms of Trade - Imports Prices (Q1) 0.6%forecast, -1.7% previous
• 22:45 New Zealand Terms of Trade Index (QoQ) (Q1) -0.1% forecast, 1.3% previous
• 22:45 New Zealand Terms of Trade - Exports Volume (QoQ) (Q1) -0.2% forecast, 3.3% previous
• 23:50 Japan Monetary Base (YoY) 24.3% previous
•01:30 Australia GDP Final Consumption (Q1) 3.2% previous
•01:30 Australia GDP (YoY) (Q1) 0.6% forecast, -1.1% previous
•01:30 Australia GDP (QoQ) (Q1) 1.5% forecast, 3.1% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency summaries
EUR/USD: The euro edged higher against dollar on Tuesday after data showed Euro zone manufacturing activity expanded in May. The bloc's economy has been ravaged by the coronavirus pandemic over the past year, with governments forcing much of the region's dominant service industry to close. But factories largely remained open, and restrictions in various countries have gradually been eased. IHS Markit's final Manufacturing Purchasing Managers' Index (PMI) rose to 63.1 in May from April's 62.9, above an initial 62.8 flash estimate and the highest reading since the survey began in June 1997.Immediate resistance can be seen at 1.2242 (23.6% fib), an upside break can trigger rise towards 1.2283 (Higher BB).On the downside, immediate support is seen at 1.2185 (38.2% fib), a break below could take the pair towards 1.2135(50%fib).
GBP/USD: The pound declined on Tuesday after touching a fresh three-year high versus the dollar as investors took some profit off the table and turned more cautious amid fears around the spread of COVID variants in Britain. Sterling hit its highest level since April 2018 of $1.4250 during the Asian session against the dollar, with analysts attributing it to positive global investor sentiment towards the UK economic recovery. Well into the London session after a long weekend, sterling reversed its course to edge 0.2% lower at $1.4182 versus the dollar at 1225 GMT Immediate resistance can be seen at 1.4221 (23.6%fib),an upside break can trigger rise towards 1.4283 (Higher BB).On the downside, immediate support is seen at 1.4159 (11DMA), a break below could take the pair towards 1.4101(38.2%fib).
USD/CAD: Canadian dollar hovered near a six-year top on Tuesday as investors awaited key U.S. economic data due later this week. Canada’s economy likely contracted in April, the first decline in a year, due to widespread lockdowns amid a third wave of coronavirus infections, slowing the country’s march toward recovery, data showed on Tuesday.In a preliminary estimate, Statistics Canada said the economy contracted 0.8% in April. By contrast, real GDP had grown 11 months in a row through March, when it grew 1.1%. The Canadian dollar steadied at about near 1.2030 per U.S. dollar, or 83.13 U.S. cents, up 0.3% on the day. Immediate resistance can be seen at 1.2081 (11DMA), an upside break can trigger rise towards 1.2140 (38.2%fib).On the downside, immediate support is seen at 1.2035 (23.6%fib), a break below could take the pair towards 1.2000(Psychological level).
USD/JPY: The dollar edged higher against yen on Tuesday after U.S. manufacturing data showed a stronger-than-expected pickup in activity, even as labor shortages and a lack of raw materials weighed on production.The Institute for Supply Management (ISM) said its index of U.S. manufacturing activity rose in May as pent-up demand amid a reopening economy boosted orders. The dollar index crept up 0.35% to 89.822, but was well off Friday's high of 90.447, when a measure of U.S. inflation closely watched by the Federal Reserve posted its biggest annual rise since 1992. Strong resistance can be seen at 109.73 (38.2%fib), an upside break can trigger rise towards 109.95 (Higher BB).On the downside, immediate support is seen at 109.23 (50%fib), a break below could take the pair towards 108.92(30DMA).
Equities Recap
European stocks hit fresh record highs on Tuesday, as strong metal and oil prices boosted shares of big commodity companies, and data showed euro zone manufacturing activity expanded at a record pace in May.
UK's benchmark FTSE 100 closed up by 0.82 percent, Germany's Dax ended up by 0.95 percent, France’s CAC finished the day up by 0.66 percent.
The S&P 500 dipped on Tuesday, with declines in healthcare and tech shares countered by energy and financial gains, as investors weighed the latest U.S. economic data for signs of a rebound and rising inflation.
Dow Jones closed up by 0.13% percent, S&P 500 closed down by 0.05% percent, Nasdaq settled down by 0.09% percent.
Treasuries Recap
The U.S. Treasury yields were set to close the New York session on Tuesday mostly flat, ultimately little moved by manufacturing data released earlier which showed strong demand in the sector, even as industry faces labor and raw material shortages.
The benchmark 10-year yield, a proxy for the market’s view on the health of the economy, was last 2.2 basis points higher on the day at 1.615%. The two-year yield , which reflects expectations of interest-rate rises, was up less than half a basis point on the day at 0.147%.
Commodities Recap
Gold slipped below a near five-month price peak hit earlier in Tuesday’s session, as robust U.S. manufacturing data and higher Treasury yields dented its appeal.
Spot gold was 0.3% lower at $1,902.05 per ounce at 1:41 p.m. EDT (1741 GMT), after touching its highest since Jan. 8 at $1,916.40. U.S. gold futures settled little changed at $1,905.
Oil prices settled higher on Tuesday, with Brent hitting above $71 and trading at its highest since March, on expectations for growing fuel demand during the summer driving season in the United States as OPEC+ agreed to boost output.
Brent crude futures for August settled up 93 cents, or 1.3%, to $70.25 a barrel after hitting $71 earlier in the session - its highest intra-day price since March 8.
