Market Roundup
- U.S. blames Iran for tanker attacks in Gulf of Oman, Iran rejects assertion
- Democrats: Trump comments give green light to foreign election meddling
- China raises anti-dumping duties on some U.S., EU steel tubes and pipes
- Competitive currency devaluation could prompt global financial chaos - ex-PBOC chief
- Japan, U.S. deepened understanding over positions on trade - Motegi
- Banks re-open as Hong Kong returns to normal ahead of weekend protest
- Brexit supporter Johnson far ahead in contest to replace British PM
- OPEC, Russia nearing accord on long term oil supply coordination - Nikkei
- Trump loses loyalist Sarah Sanders in another White House departure
- U.S. muni bond funds post $778.4 mln in inflows-Lipper
- Foreign CB US debt holdings +$17.705 bln to $3.461 tln June 12 week
- Treasuries +$17.237 bln to $3.051 tln, agencies +$361 mln to $332.93 bln
Economic Data Ahead
- (0245 ET/0645 GMT) France May CPI (EU Norm) Final YY, 1.1% f'cast, 1.1% prev
Key Events Ahead
- N/A ECB's Luis de Guindos participates at ECOFIN meeting in Luxembourg
- N/A ECB's Andrea Enria and Bank of Italy's Fabio Panetta speak at a conference on banks in Frankfurt
- (0600 ET/1000 GMT) ECB's Sabine Lautenschlager participates at Executive Committee meeting of European Association of Co-operative Banks (EACB) in Berlin
- (0615 ET/1015 GMT) ECB's Andrea Enria chairing panel "NPLs: How and when do we solve the problem, or is it solving itself?" at ILF Conference in Frankfurt
- (0855 ET/1255 GMT) BoE's Mark Carney attends Women in Banking & Finance 22nd Anniversary Awards for Achievement lunch in London
FX Beat
DXY: The dollar surged to a 1-week peak, as investors' await the release of the U.S. retail sales data due later for further insights into the state of domestic demand in the U.S. economy. The greenback against a basket of currencies traded 0.05 percent up at 97.06, having touched a high of 97.09, its highest since June 7. FxWirePro's Hourly Dollar Strength Index stood at 71.61 (Bullish) by 0500 GMT.
EUR/USD: The euro declined, extending losses for the third straight session, as trade disputes between the United States and both China and the European Union stoked fears that German growth will slow or even stall in the second quarter. The European currency traded 0.05 percent down at 1.1272, having touched a low of 1.1268 on Thursday, its lowest since June 7. FxWirePro's Hourly Euro Strength Index stood at -54.48 (Bearish) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies and ECB Lautenschlager and De Guindos' speech, ahead of the U.S. retail sales, capacity utilization, industrial production and business inventories. Immediate resistance is located at 1.1309 (June 6 High), a break above targets 1.1359 (Mar. 18 High). On the downside, support is seen at 1.1251 (June 7 Low), a break below could drag it below 1.1201 (May 14 Low).
USD/JPY: The dollar eased as investor focus turned to next week's Federal Reserve meeting for hints on a possible rate cut amid rising risks to trade and global growth. The pair was trading 0.05 percent down at 108.30, having hit a high of 108.80 on Tuesday, its highest since May 31. FxWirePro's Hourly Yen Strength Index stood at 59.97 (Bullish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, capacity utilization, industrial production and business inventories. Immediate resistance is located at 108.87 (50.0% retracement of 109.92 and 107.81), a break above targets 109.47 (78.6% retracement). On the downside, support is seen at 107.88 (June 3 Low), a break below could take it lower at 107.51 (Jan. 4 Low).
GBP/USD: Sterling consolidated near a 3-day low after Boris Johnson won the support of 114 Conservative lawmakers in the first round of the contest to replace Prime Minister Theresa May. The major traded flat at 1.2673, having hit a high of 1.2763 last week; it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at -11.19 (Neutral) 0500 GMT. Investors’ attention will remain on BoE Governor Carney's speech, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2742 (June 6 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2647 (May 24 Low), a break below targets 1.2580 (May 30 Low). Against the euro, the pound was trading flat at 88.92 pence, having hit a low of 89.32 on Tuesday, it’s lowest since Jan. 15.
AUD/USD: The Australian dollar plunged to a 3-week low as the mixed labour report this week fuelled speculation the RBA would have to cut even deeper, with markets pricing in ever larger, and earlier, rate cuts amid a global shift toward renewed central bank stimulus. The Aussie trades 0.2 percent down at 0.6897, having hit a low of 0.6892, it’s lowest since May 24. FxWirePro's Hourly Aussie Strength Index stood at -26.54 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6871 (May 22 Low), a break below targets 0.6840. On the upside, resistance is located at 0.6959 (May 14 High), a break above could take it near 0.7029 (May 2 High).
NZD/USD: The New Zealand dollar slumped to a 2-week low, as investors wagered that aggressive rate cuts would be required given soft domestic economic data and the fallout from U.S.-China tariffs globally. The Kiwi trades 0.5 percent down at 0.6533, having touched a low of 0.6527 earlier, its lowest level June 3. FxWirePro's Hourly Kiwi Strength Index was at -108.08 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6619 (June 4 High), a break above could take it near 0.6681 (June 7 High). On the downside, support is seen at 0.6550 (May 15 Low), a break below could drag it below 0.6513 (May 17 Low).
Equities Recap
Asian shares held gains on hopes the Federal Reserve will ease monetary policy soon to counter a slowing global economy.
MSCI's broadest index of Asia-Pacific shares outside Japan consolidated within narrow ranges.
Tokyo's Nikkei rallied 0.4 percent to 21,116.89 points, Australia's S&P/ASX 200 index rose 0.2 percent to 6,554.00 points and South Korea's KOSPI slumped 0.5 percent to 2,091.77 points.
Shanghai composite index fell 0.8 percent to 2,888.36 points, while CSI 300 index traded 0.7 percent down at 3,660.65 points.
Hong Kong’s Hang Seng traded 0.7 percent lower at 27,118.12 points. Taiwan shares shed 0.4 percent to 10,524.67 points
Commodities Recap
Crude oil prices rose for a second straight session, as attacks on two oil tankers in the Gulf of Oman stoked concerns of reduced crude flows through one of the world's key shipping routes. International benchmark Brent crude was trading 0.6 percent higher at $61.66 per barrel by 0506 GMT, having hit a low of $59.55 on Wednesday, its lowest since June 5. U.S. West Texas Intermediate was trading 0.4 percent up at $52.38 a barrel, after falling as low as $50.71 on Wednesday, its lowest since the June 5.
Gold prices rose to a 1-week peak and closer to its 14-month high hit last week, as trade and political turmoil, along with U.S. rate cut expectations boosted demand for safe-haven assets. Spot gold was 0.3 percent up at $1,345.43 by 0513 GMT, having touched a high of $1,347.78 earlier, its highest since June 7 and has risen 0.4 percent so far this week. U.S. gold futures rose 0.4 percent to $1,349.50 an ounce.
Treasuries Recap
The Japanese government bond prices broadly rose, with the benchmark 10-year JGB yield and the 20-year yield losing one basis point each, to minus 0.125 percent and 0.245 percent, respectively. The short-dated maturities were a shade stronger, with the two-year yield and the five-year yield off half-a-basis point each, at minus 0.205 percent and minus 0.235 percent, respectively.
The Australian three-year bond contract hit a record high and was last up 1 tick at 99.005. The 10-year contract gained 2.75 ticks to 98.6125, implying a yield of 1.39 percent.
The yields on two-year New Zealand paper dropped to an all-time trough of 1.21 percent.
The Canadian government bond prices were higher across a steeper yield curve. The two-year rose 8.5 Canadian cents to yield 1.402 percent and the 10-year was up 39 Canadian cents to yield 1.455 percent.
