Market Roundup
• Trump upbeat ahead of N.Korean summit; Kim visits Singapore sites.
• Kim set a deadline for ending summit, prompting earlier exit by Trump – Bloomberg.
• "Fair trade, fool trade", Trump's tweets spew ire on NATO allies, Trudeau.
• IMF's Lagarde says global economic outlook darkening by the day.
• G7 summit 'fiasco' creates huge uncertainty among German exporters –DIHK.
• After "difficult" G7 summit, UK's May warns against unilateral action on trade.
• U.S. inflation seen flat, income weaker - NY Fed survey.
• Britain's May urges Conservative unity before parliament votes on Brexit strategy.
• Shock manufacturing slide casts doubt on UK economy's bounceback.
• U.S. sanctions Russians over military, intelligence hacking.
• Ex-Trump campaign aide Manafort to be arraigned Friday on new charges.
Looking Ahead - Economic Data (GMT)
• 11 Jun 22:45 New Zealand May Electronic Card Retail Sales mth, -2.2% previous
• 11 Jun 22:45 New Zealand May Electronic Card Retail Sales YY, 0.8% previous
• 11 Jun 23:50 Japan May Corp Goods Price MM, 0.2% forecast, 0.1% previous
• 11 Jun 23:50 Japan May Corp Goods Price YY, 2.2% forecast, 2.0% previous
• 11 Jun 23:50 Japan Q2 Business Survey Index, 2.9% previous
• 12 Jun 01:30 Australia May NAB Business Conditions, 21 previous
• 12 Jun 01:30 Australia May NAB Business Confidence, 10 previous
• 12 Jun 01:30 Australia Apr Housing Finance, -1.9% forecast, -2.2% previous
• 12 Jun 01:30 Australia Apr Invest Housing Finance, -9.0% previous
Looking Ahead - Events, Other Releases (GMT)
• N/A Bank of Iceland releases monetary policy statements in Reykjavik, Iceland
• N/A Swedish Financial Stability Council - consisting of members from the government, the central bank, the debt office and the Financial Supervisory Authority - meets to discuss the Swedish economy and how to improve financial stability in Stockholm
• 06:30 Riksbank Seminar: A changing mortgage market, in Stockholm
• 14:00 Senate Banking Committee votes on the nominations of Richard Clarida to be Federal Reserve vice chairman and Michelle Bowman to be a member of the Federal Reserve Board of Governors, in Washington D.C.
• 18:00 U.S. Federal Reserve's Federal Open Market Committee (FOMC) announces decision on interest rate, followed by statement in Washington D.C.
Currency Summaries
EUR/USD is likely to find support at 1.1712 levels and currently trading at 1.1783 levels. The pair has made session high at 1.1812 and hit lows at 1.1773 levels. Euro was range-bound against the dollar on Monday as traders turned their attention away from a crisis in Italy and a divisive G7 summit towards a European Central Bank (ECB) policy meeting that could signal the beginning of the end of the bloc's vast economic stimulus. Investors are raising their bets that the ECB will signal on Thursday a winding down of its vast bond-buying programme by the end of this year following a flurry of hawkish comments by officials last week. Market optimism ahead of Thursday's ECB meeting was reinforced by assurances from Italy's new coalition government that it does not intend to leave the euro or issue securities to pay off companies owed money by the state. Before the ECB meeting, the U.S. Federal Reserve is expected to raise interest rates for the second time this year on Wednesday. The market's focus will be on the Fed's projection on the path of future interest rates. The euro gained half a percent to $1.1816 towards a two-week high of $1.1840 touched on Thursday before losing some momentum as the dollar strengthened broadly.The dollar index was steady at 93.580, rising further from a three-week low set last Thursday.
GBP/USD is supported in the range of 1.3292 levels and currently trading at 1.3378 levels. It reached session high at 1.3430 and dropped to session low at 1.3342 levels. Sterling declined against the dollar on Monday after British factory output suffered its biggest monthly drop since 2012, underlining that economic momentum remains fragile and will likely need to improve before interest rates are raised. Data published earlier on Monday showed manufacturing output dropped by 1.4 percent month-on-month in April after a 0.1 percent decline in March a bigger drop than any economist had forecast, which pointed to growth of 0.3 percent. The broader measure of industrial output fell 0.8 percent on the month, but was up 1.8 percent on the year again, weaker than all forecasts. The disappointing data comes ahead of this week's key British parliamentary vote on the EU withdrawal bill. Traders said signs of limited progress in talks between Britain and the European Union over Brexit continued to weigh on the pound. After trading up 0.1 percent, the pound fell following the data release and was last trading around 0.2 percent at $1.3380 in the late US session. The drop versus the euro was even more pronounced as the single currency was stronger across the board. The pound slumped as much as 0.6 percent to 88.31 pence per euro, not far from one-month lows of 88.375 pence hit last week.
USD/CAD is supported at 1.2900 levels and is trading at 1.2982 levels. It has made session high at 1.3025 and lows at 1.2970 levels. The Canadian dollar weakened against its U.S. counterpart on Monday after U.S. President Donald Trump, who has threatened to scrap the NAFTA trade pact, attacked Canadian Prime Minister Justin Trudeau in their feud over trade, and as oil prices fell. Trump fired off a volley of tweets on Monday venting anger on NATO allies, the European Union and Trudeau in the wake of a divisive G7 meeting in Quebec over the weekend. Trump tweeted on Saturday that Trudeau’s remarks at a news conference, where he said Canada would not be pushed around, “were very dishonest and weak. “The loonie has been pressured recently by new U.S. tariffs on steel and aluminum imports and slow-moving talks to modernize the North American Free Trade Agreement. The price of oil, one of Canada's major exports, was pulled down by rising Russian production and the highest U.S. drilling activity in more than three years. U.S. crude prices were down 1.1 percent at $65.05 a barrel. The Canadian dollar was trading 0.5 percent lower at C$1.2982 to the greenback. The currency traded in a range of C$1.2955 to C$1.3026.
USD/JPY is supported around 109.15 levels and currently trading at 110.03 levels. It peaked to hit session high at 110.11 and made session lows at 109.80 levels. The U.S. dollar edged higher against Japanese yen on Monday as investors awaited key central bank policy meetings and the United States-North Korea summit in Singapore. The greenback was up 0.14 percent against a basket of six currencies, despite heightened worries about a global trade war following a spat at the Group of Seven summit in Canada between Trump and other leaders over automobile tariffs and other issues. The move was muted by uncertainty about the outcome of Trump's meeting with North Korea. Trump said on Monday his historic summit with the North Korean leader could "work out very nicely" as officials from both countries sought to narrow differences on how to end a nuclear stand-off on the Korean peninsula. The U.S. Federal Reserve's Federal Open Market Committee (FOMC) starts its two-day meeting on Tuesday, where it is anticipated to raise U.S. interest rates. The European Central Bank (ECB) and Bank of Japan's policy meetings are also due this week.
Equities Recap
European banking stocks and Italian shares jumped on Monday after Italy's new economy minister promised to keep the country in the euro, dissipating investors' fears of a euro zone break-up and boosting sentiment after a fraught G7 summit.
UK's benchmark FTSE 100 closed up by 0.88 percent, the pan-European FTSEurofirst 300 ended the day up by 0.82 percent, Germany's Dax ended down by 0.66 percent, France’s CAC finished the day up by 0.55 percent.
Wall Street stocks gained some ground on Monday as investors shrugged off the weekend's contentious meeting of the Group of 7 nations and focused on the historic United States-North Korea summit Tuesday morning in Singapore.
Dow Jones closed up by 0.04 percent, S&P 500 ended up by 0.09 percent, Nasdaq finished the day up by 0.17 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday before the Federal Reserve is expected to raise interest rates on Wednesday, though the Treasury Department saw solid demand for $54 billion in new three and 10-year notes.
Benchmark 10-year notes last fell 7/32 in price to yield 2.9589 percent, up from 2.935 percent to end last week.
The 30-year bond last fell 10/32 in price to yield 3.0976 percent, up from 3.082 percent on Friday.
Commodities Recap
Gold inched higher on Monday, as investors anticipated the U.S. central bank monetary policy meeting this week that is expected to boost interest rates, and ahead of a U.S.-North Korea summit.
Spot gold gained 0.1 percent to $1,299.83 ounce by 1:46 p.m. EDT (1746 GMT).U.S. gold futures for August delivery settled up 50 cents, or 0.04 percent, at $1,303.20 per ounce.
Oil prices fell in early activity, pulled down by rising Russian production, before regaining momentum later.
U.S. crude rose 0.55 percent to settle at $66.10 per barrel, while Brent settled at $76.46, unchanged
