Market Roundup
• U.S. factory activity eases off an 11-year low in May
• Canada May RBC Manufacturing PMI 40.6, 33.0 previous
• US May Manufacturing PMI 39.8, 39.8 forecast, 36.1 previous
• US May ISM Manufacturing PMI 43.1, 43.0 forecast, 41.5 previous
• US May Construction Spending (MoM) -2.9%, -6.0% forecast, 0.9% previous
• US May ISM Manufacturing Employment 32.1 , 35.0 forecast, 27.5 previous
• US May ISM Manufacturing New Orders Index 31.8,27.1 previous
• US May ISM Manufacturing Prices 40.8, 37.0 forecast, 35.3 previous
• Brazil May Trade Balance 4.50B, 4.70B forecast, 6.70B previous
Looking Ahead Economic Data
• 21:00 New Zealand April Building Consents (MoM) -21.3% previous
• 21:00 New Zealand Terms of Trade Index (QoQ) (Q1) 1.3% forecast,2.6 previous
• 00:00 Australia HIA New Home Sales (MoM) -23.2% previous
• 01:30 Australia Company Gross Operating Profits (QoQ) (Q1) -3.5% forecast, -3.5% previous
• 01:30 Australia Current Account (Q1) 6.3B forecast, 1.0B previous
• 01:30 Australia Business inventories (MoM) (Q1) -0.7% forecast, 0.3% previous
• 04:30 Australia June RBA Interest Rate Decision
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency summaries
EUR/USD: The euro gained against dollar on Monday as investors took cheer from signs that some economies may be through the worst of the coronavirus downturn. Investors were also relieved that U.S. President Donald Trump made no move to impose new tariffs on China during a news conference on Friday when he outlined his response to Beijing’s tightening grip over Hong Kong. In the euro zone, the manufacturing PMI recovered somewhat in May from April’s record low, although factory activity still contracted heavily. The euro gained, rising 0.4% to $1.1154 before falling back to trade flat at $1.1115.Immediate resistance can be seen at 1.1166 (61.8% fib), an upside break can trigger rise towards 1.1200 (Psychological level).On the downside, immediate support is seen at 1.1067 (50 % fib), a break below could take the pair towards 1.0995 (9 DMA).
GBP/USD: The pound rose to a four-week high against the dollar on Monday, comfortably above the $1.24 mark, as a risk-on mood in global markets prompted by hopes for an economic recovery caused the safe-haven dollar to weaken. Global risk appetite took boost from signs that Europe’s economic downturn has reached its worst. This caused cable to strengthen as the dollar weakened. Against a broadly weaker dollar, the pound hit a four-week high of $1.2488 around 1500 GMT. It was last at $1.2493, up 0.9% on the day. Immediate resistance can be seen at 1.2532 (61.8% fib), an upside break can trigger rise towards 1.2600 (Psychological level).On the downside, immediate support is seen at 1.2368 (5 DMA), a break below could take the pair towards 1.2317 (50% fib).
USD/CAD: The Canadian dollar strengthened to a near three-month high against its U.S. counterpart on Monday as liquidity measures introduced by the Federal Reserve during the coronavirus crisis weighed on the greenback. Global stocks rallied on Monday, bolstered by hopes of economic recovery. Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to benefit from rising risk appetite. The Canadian dollar was trading 1.5% higher at 1.3571 to the U.S. dollar, or 73.69 U.S. cents. The currency touched its strongest intraday level since March 9 at 1.3558.Immediate resistance can be seen at 1.3604 (23.6% fib), an upside break can trigger rise towards 1.3671 (5 DMA).On the downside, immediate support is seen at 1.3500 (Psychological level), a break below could take the pair towards 1.3457 (200 DMA).
USD/JPY: The dollar edged higher against the Japanese yen on Monday as safe-haven yen inched lower as signs that Europe’s economic downturn has bottomed boosted risk appetite, despite worries over violent protests in the United States and unease over Washington’s standoff with Beijing. President Donald Trump left a trade deal with China intact Friday despite moving to end Washington’s special treatment for Hong Kong in retaliation for Beijing seeking to impose new security legislation on the city. Strong resistance can be seen at 107.90 (38.2% fib), an upside break can trigger rise towards 108.30 (Higher BB).On the downside, immediate support is seen at 107.25 (21 DMA), a break below could take the pair towards 106.91 (61.8% fib).
Equities Recap
European shares rose on Monday on hopes of a post-coronavirus global recovery, with investors relieved that the U.S. response to China’s national security law in Hong Kong was not as bad as feared.
The UK's benchmark FTSE 100 closed up by 1.48 percent, Germany's Dax ended down by 1.65 percent, and France’s CAC finished the up by 1.43 percent.
Wall Street’s major indexes rose on Monday as investors chose to look past violent protests across the country over racial inequality and focused more on economic data that bolstered views of a quick post-pandemic recovery.
Dow Jones closed up by 0.36 percent, S&P 500 ended up 0.38 percent, Nasdaq finished the day up by 0.66 percent.
Treasuries Recap
Investors pushed longer-dated U.S. Treasury yields higher on Monday as they tried to forecast how the government would finance massive efforts to stimulate the economy.
The benchmark 10-year yield was up 2.8 basis points at 0.6721% in afternoon trading.
Commodities Recap
Gold prices rose on Monday supported by increasing friction between Washington and Beijing and protests in the United States over racism.
Spot gold climbed 0.8% to $1,740.62 per ounce by 12:07 p.m. EDT (1607 GMT). Prices earlier rose 1% to hit an over one-week high of $1,744.19.U.S. gold futures was up 0.1% to $1,753.40.
Oil futures steadied on Monday as rising U.S.-China tensions weighed on sentiment, but prices drew support from reports that OPEC and Russia were close to a deal extending output cuts.
Brent futures rose 48 cents, or 1.3%, to settle at $38.32 a barrel. U.S. crude fell 5 cents, or 0.1%, to settle at $35.44 a barrel.
