Market Roundup
• Trump says he can fire Fed's Powell; it's not that simple
• Trump says possible he may make trade deal with China's Xi
• US May Durable Goods, -1.3%, -0.1% forecast, -2.1% previous
• US May Durables Ex-Transport, 0.3%, 0.1% forecast, 0.0% previous
• US 21 Jun, w/e MBA 30-Yr Mortgage Rate, 4.06%, 4.14% previous
• US 21 Jun, w/e Mortgage Refinance Index, 1,949.5, 1,888.8 previous
• Oil prices rise more than 2% as U.S. crude, products stockpiles fall
• No-deal Brexit unlikely to go into Bank of England forecasts -Carney
• Bitcoin soars past $13,000 as Facebook's Libra fuels demand
Looking Ahead - Economic Data (GMT)
• 26 Jun 23:50 Japan May Retail Sales YY, 1.2% forecast, 0.5% previous
• 27 Jun 01:00 New Zealand Jun NBNZ Business Outlook, -32.0 previous
Looking Ahead - Events, Other Releases (GMT)
• N/A General Council meeting of the ECB in Frankfurt
• 01:30 Speech by Bank of Japan Deputy Governor Masazumi Wakatabe at a meeting with business leaders in Aomori
• 09:40 BoE Executive Director, Markets, Andrew Hauser, delivers a speech at Risk Live 2019, London
• 23:50 Bank of Japan to release summary of opinions from board members at its June 19-20 policy meeting in Tokyo
Currency Summaries
EUR/USD: The euro edged lower against the U.S. dollar on Wednesday, as traders curbed expectations of an aggressive U.S. interest rate cut in July, while Wall Street traded little changed on mixed signals over China-U.S. trade talks at the G20 summit in Japan. Treasury Secretary Steven Mnuchin said on Wednesday that the United States and China were close to a trade deal, CNBC reported ahead of G20 meeting this week between presidents Donald Trump and Xi Jinping. The euro was down 0.01 percent at $1.1370. An index that tracks the dollar versus a basket of six major currencies was up 0.04 at 96.22. Immediate resistance can be seen at 1.1395 (23.6% retracement level), an upside break can trigger rise towards 1.1415 (June 25th high).On the downside, immediate support is seen at 1.1340 (Daily low), a break below could take the pair towards 1.1300 (Psychological level).
GBP/USD: The British pound declined against the greenback on Wednesday, after the top contender to replace Prime Minister Theresa May reaffirmed his desire to take Britain out of the European Union with or without an agreement. Boris Johnson told the BBC he was "serious" about leading Britain out of the EU on the Oct. 31 deadline without a deal if the bloc refused to negotiate a new exit agreement. It has repeatedly said it is not willing to reopen negotiations. The next Conservative Party leader will be elected by the end of July, leaving only a few months to try to renegotiate the Brexit withdrawal agreement. Against the dollar, the pound slipped 0.1% lower at $1.2680, after reaching a five-month low of $1.2507 last week. Versus the euro, the pound weakened to 89.72 pence. Immediate resistance can be seen at 1.2800 (Higher Bollinger Band), an upside break can trigger rise towards 1.2850 (61.8% retracement level).On the downside, immediate support is seen at 1.2660 (Daily low), a break below could take the pair towards 1.2634 (23.6% retracement level).
USD/CAD: The Canadian dollar strengthened to a near four-month high against its U.S. counterpart on Wednesday, as oil prices rose and investors became more optimistic that the United States and China would strike a trade deal.Canada has its own trade issues with China. Still, it is a major exporter of commodities, including oil, so its economy could benefit from reduced uncertainty for global trade.The price of oil was buoyed by an outage at a major refinery on the U.S. East Coast and industry data that showed U.S. crude stockpiles fell more than expected. U.S. crude oil futures CLc1 were up 2.7% at $59.40 a barrel .At (2048 GMT), the Canadian dollar was trading 0.33% higher at 1.3124 to the greenback, or 76.02 U.S. cents. The currency touched its strongest intraday level since March 1 at 1.3142.Immediate resistance can be seen at 1.3177 (50% retracement level), an upside break can trigger rise towards 1.3200 (Psychological level).On the downside, immediate support is seen at 1.3116 (38.2% retracement level), a break below could take the pair towards 1.3027 (23.6% retracement level).
USD/JPY: The dollar weakened against the Japanese yen on Wednesday, as optimism over U.S.-China trade talks offset weakness after the U.S. Federal Reserve dampened hopes of aggressive interest rate cuts.U.S. Treasury Secretary Steven Mnuchin said on Wednesday that the United States and China were close to a trade deal, CNBC reported ahead of meeting this week between presidents Donald Trump and Xi Jinping at the G20 Summit. The dollar was 0.58 percent higher versus the Japanese yen at 107.78. The news turned around weakness in dollar after comments from Fed policymakers on Tuesday pushed investors to trim expectations of a half-point cut in interest rates in a policy meeting next month. Strong resistance can be seen at 107.87 (50% retracement level), an upside break can trigger rise towards 108.10 (61.8% retracement level).On the downside, immediate support is seen at 106.66 (Lower Bollinger band), a break below could take the pair towards 106.00 (Psychological level).
Equities Recap
European shares eased in low volumes on Wednesday, pulled down by disappointment about U.S. Federal Reserve comments on interest rate cuts overnight as well as mixed signals from Washington on the Sino-U.S. trade dispute.
UK's benchmark FTSE 100 closed down by 0.04 percent, the pan-European FTSEurofirst 300 ended the day down by 0.27 percent, Germany's Dax ended up by 0.08 percent, France’s CAC finished the day down by 0.3 percent.
The S&P 500 ended lower on Wednesday as gains in technology stocks were offset by a drop in healthcare shares, and investors parsed mixed messages over prospects for a deal to end a trade war between the United States and China.
Dow Jones closed down by 0.04 percent, S&P 500 ended down by 0.13 percent, Nasdaq finished the day up by 0.31 percent.
Treasuries Recap
U.S. Treasury yields rose on Wednesday on hopes that the United States and China will make progress in trade talks later this week and as traders reduced bets that the Federal Reserve will cuts rates twice when it meets next month.
Benchmark 10-year notes were last down 6/32 in price to yield 2.102%, up from 1.992% on Tuesday. The yields have fluctuated around the 2% level since falling to 1.974% on Thursday, the lowest since November 2016.
Commodities Recap
Gold prices dipped on Wednesday on signals the U.S. Federal Reserve would not make too steep a cut to interest rates next month, but still held ground above the key psychological $1,400 level.
Spot gold shed 0.8% to $1,411.21 per ounce as of 1:56 p.m. EDT (1756 GMT), having fallen more than 1% earlier in the session. U.S. gold futures settled 0.2% lower to $1,415.40.
Oil prices rose more than 2% on Wednesday and hit their highest in about a month, buoyed by U.S. government data that showed a larger-than-expected drawdown in crude stocks as exports hit a record high, and surprise drops in refined product stockpiles.
Brent crude futures rose $1.44, or 2.2%, to settle at $66.49 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose $1.55, or 2.7%, to settle at $59.38 a barrel.
