Market Roundup
• US Build Permits R Numb MM May 1.168m, 1.168m previous.
• US Durable Goods May -1.1% vs -0.6% forecast, -0.9% previous.
• US National Activity Index May -0.26%, 0.57% previous.
• US Dallas Fed Mfg Business Index Jun 15, 17.20 previous.
• US economy seen growing 2.9% in Q2, unchanged from June 16 - Atlanta Fed.
• Fed's Dudley: Recent easing of US financial conditions another reason to tighten policy.
• Dudley: Taken 'very measured and careful' approach to shrinking bond portfolio.
• US Supreme Court lifts most of injunction that blocked trump's travel ban.
• Gauge of long-term Euro Zone inflation expectations highest in almost 2 weeks.
• UK's May strikes $1.3 billion deal with N.Irish party to prop up government.
• Mexican economy grows 0.1 pct in April from March.
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand Trade Imports May, 4.17b previous
• 22:45 New Zealand Trade Balance May, 578m previous
• 22:45 New Zealand Trade Exports May, 4.75b previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.1164 levels and currently trading at 1.1174 levels. The pair has made session high at 1.1217 and hit lows at 1.1174 levels. The dollar strengthened against euro on Monday after the European Central Bank chief defended the ECB's easy monetary policy, and as investors awaited Federal Reserve Chair Janet Yellen's speech on Tuesday. The euro, which hit a more than one-week high against the U.S. dollar of $1.1219 earlier in the session after weaker-than-expected U.S. May durable goods orders data fueled doubts about the U.S. economy and the Federal Reserve's aggressive rate increase outlook, eased after Draghi's remarks. ECB President Mario Draghi, speaking to university students in Lisbon, said super low rates create jobs, foster growth and benefit borrowers, ultimately easing inequality. The euro fell earlier this month after the ECB said policymakers had not discussed scaling back its massive bond-buying program. Fed Chair Yellen is set to deliver a speech in Europe on Tuesday. Analysts said traders were expecting Yellen to maintain a positive outlook on the U.S. economy despite a recent batch of weak U.S. economic data. The dollar index, which measures the greenback against a basket of six major rivals, was last up 0.2 percent at 97.440.
GBP/USD is supported in the range of 1.2637 levels and currently trading at 1.2716 levels. It reached session high at 1.2752 and dropped to session low at 1.2708 levels. Sterling strengthened against the dollar on Monday after Prime Minister Theresa May struck a deal to prop up her minority government, peeling away one layer of uncertainty for Britain as its negotiates its exit from the European Union. May secured the backing of Northern Ireland's Democratic Unionist Party (DUP) and its 10 lawmakers, concluding two weeks of talks since she lost her majority in an election on June 8. The pound hit a one-week high against the dollar of $1.2759 in European trade in anticipation of the deal, before briefly turning negative in the US session. Sterling has recovered more than a cent of its losses since the election as investors have upped their expectations for a rise in record-low-interest rates in Britain. Data on first-quarter economic output, a consumer confidence survey, business investment numbers and a reading of Britain's current account are all due later this week.
USD/CAD is supported at 1.3200 levels and is trading at 1.3248 levels. It has made session high at 1.3252 and lows at 1.3211 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday as oil prices rose, while softer-than-expected U.S. data weighed on the greenback. Oil edged up for a third straight session, climbing off last week's seven-month lows, but gains were capped by a relentless rise in U.S. supply and bloated global inventories. U.S. oil is still set for a near 20 percent drop in the first half of the year. The Organization of the Petroleum Exporting Countries and its partners have been trying to reduce a global crude glut with production cuts. OPEC states and 11 other exporters agreed in May to extend cuts of 1.8 million barrels per day (BPD) until March. However, Nigeria and Libya, OPEC members exempt from the cuts, have hiked output. The Canadian dollar last was trading at C$1.3248 to the greenback, or 75.64 U.S. cents, up 0.2 percent. The currency traded in a range of C$1.3215 to C$1.3277.
AUD/USD is supported around 0.7567 levels and currently trading at 0.7584 levels. It hit session high at 0.7600 and made session lows at 0.7581 levels. The Australian dollar was little changed against the greenback on Monday as investors avoided making big bets ahead of Yellen speeches this week. The Australian dollar was at $0.7582 compared with a low of $0.7539 touched in the previous session. The Aussie is up nearly 1.9 percent in June so far, its best monthly performance since January. The currency, however, faces stiff resistance at $0.7636 a level it touched earlier this month but has repeatedly failed to breach. On the data front, new orders for key U.S.-made capital goods unexpectedly fell in May and shipments also declined, suggesting a loss of momentum in the manufacturing sector halfway through the second quarter.
Equities Recap
European shares rose on Monday as banks rallied after Italy reached a deal to wind up two failed regional banks and Nestle climbed to a new record after an activist investor urged changes at the consumer bellwether.
The pan-European FTSEurofirst 300 index ended up 0.47 percent, UK's benchmark FTSE 100 closed up by 0.4 percent, Germany's Dax ended up by 0.3 percent, France’s CAC finished the day up by 0.7 percent.
The S&P 500 and the Dow closed up slightly Monday but a fall in technology stocks nudged the Nasdaq lower as investors turned to more defensive sectors.
Dow Jones down ended up by 0.07 percent, S&P 500 ended up 0.03 percent, Nasdaq finished the day down 0.29 percent.
Treasuries Recap
Long-dated U.S. Treasury bond yields dropped to seven-month lows on Monday and the yield curve between five-year notes and 30-year bonds fell to its flattest level since 2007 after weak U.S. economic data raised concerns about tepid growth and falling inflation.
Thirty-year bond yields slipped to 2.68 percent, the lowest since Nov. 9.The difference in yield between five-year notes and 30-year bonds narrowed to as little as 93 basis points, producing the flattest yield curve since late 2007.
Commodities Recap
Gold tumbled to its lowest price in nearly six weeks as a large sell order hit sentiment on Monday, though losses were limited by political uncertainty around the world.
Spot gold was down 0.9 percent at $1,244.82 an ounce by 2:22 p.m. EDT (1822 GMT), having dropped as far as $1,236.46, its lowest since May 17 and just above the 200-day moving average.
U.S. gold futures for August delivery settled down 0.8 percent at $1,246.40, after making an $18 drop in heavy volume to $1,236.50 and then rebounding by $10, all within 60 seconds around 4 a.m. EDT (0800 GMT).
Oil prices settled more than half a percent higher on Monday as some traders found bargains after last week's seven-month lows, but rising crude supply in the United States and other countries limited gains.
Brent crude futures settled up 29 cents, or 0.6 percent, at $45.83 a barrel. The benchmark was still set to end the first half of the year down nearly 20 percent.U.S. crude futures were up 37 cents, or 0.8 percent, at $43.38 a barrel.
