Market Roundup
- Trump talks trade at G20, China's Xi warns against protectionism
- Russia's Putin: Attempts to destroy WTO or lower its role counter-productive
- EU leaders warn of damage to global growth from trade war
- BOJ board's debate of more easing at June meet signals possible early action
- Japan May Industrial Output Prelim MM SA, 2.3%, 0.7% f'cast, 0.6% prev
- Japan May Jobs/Applicants Ratio, 1.62, 1.63 f'cast, 1.63 prev
- Japan Jun CPI Tokyo Ex fresh food YY, 0.9%, 0.9% f'cast, 1.1% prev
- Japan May Unemployment Rate, 2.4%, 2.4% f'cast, 2.4% prev
- UK consumers turn gloomier as economy, finance worries grow-GfK
- Iran seen breaking nuclear pact limit in days; Trump says 'no time pressure'
- Foreign CB US debt holdings -$10.088 bln to $3.467 tln Jun 26 week
- Treasuries -$12.850 bln to $3.043 tln, agencies +$2.089 bln to $346.222 bln
- Investors pour $6 bln into U.S.-based high-yield, investment-grade bond funds -Lipper
Economic Data Ahead
- (0430 ET/0830 GMT) UK Q1 GDP QQ, 0.5% f'cast, 0.5% prev
- (0430 ET/0830 GMT) UK Q1 GDP YY, 1.8% f'cast, 1.8% prev
- (0430 ET/0830 GMT) UK Q1 Current Account GBP, -32.000 bln f'cast, -23.707 bln prev
- (0500 ET/0900 GMT) Italy Jun Consumer Price Prelim YY, 0.7% f'cast, 0.8% prev
- (0500 ET/0900 GMT) Italy Jun CPI (EU Norm) Prelim YY, 0.7% f'cast, 0.9% prev
- (0500 ET/0900 GMT) EZ Jun HICP Flash YY, 1.2% f'cast, 1.2% prev
- (0500 ET/0900 GMT) EZ Jun HICP-X F&E Flash YY, 1.0% f'cast, 1.0% prev
Key Events Ahead
- (0330 ET/0730 GMT) Introductory remarks by ECB executive board member Sabine Lautenschlager at the third ECRB meeting organised by the ECB in Frankfurt
- (0500 ET/0900 GMT) Text of the opening speech of BOE Executive Director for Markets Andrew Hauser at an event titled 'Promoting Career Opportunities for Women in Foreign Exchange,' to be released in London
- (1520 ET/1920 GMT) Fed's Mary Daly speaks at the Aspen Ideas Festival in Aspen
FX Beat
DXY: The dollar index held firm ahead of a highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping this weekend that could lead to an easing of trade tensions. The greenback against a basket of currencies traded flat at 96.19, having touched a low of 95.84 on Tuesday, its lowest since Mar. 21. FxWirePro's Hourly Dollar Strength Index stood at -10.05 (Neutral) by 0500 GMT.
EUR/USD: The euro declined after data released yesterday showed Eurozone economic sentiment slumped to its lowest point in nearly three years in June, boosting speculation the European Central Bank will ease monetary policy again if inflation in the bloc fails to gain momentum. The European currency traded 0.05 percent down at 1.1363, having touched a high of 1.1412 on Tuesday, its highest since Mar. 21. FxWirePro's Hourly Euro Strength Index stood at -50.14 (Bearish) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, EZ prelim consumer price index and ECB Lautenschlager's speech, ahead of the U.S. personal consumption expenditure, Chicago Purchasing Manager Index and Michigan consumer sentiment index. Immediate resistance is located at 1.1437 (Mar. 21 High), a break above targets 1.1474 (Dec. 21 High). On the downside, support is seen at 1.1319 (Mar 18 Low), a break below could drag it below 1.1277 (Mar. 13 Low).
USD/JPY: The dollar eased, extending previous session losses, as investors cautiously awaited a crucial meeting between the leaders of the United States and China at a Group of 20 summit over the weekend for signs of progress to end a year-long trade dispute. The pair was trading 0.1 percent down at 107.68, having hit a low of 106.78 on Tuesday, its lowest since Jan. 3. FxWirePro's Hourly Yen Strength Index stood at -52.16 (Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. personal consumption expenditure, Chicago Purchasing Manager Index and Michigan consumer sentiment index. Immediate resistance is located at 108.30 (78.6% retracement of 108.72 and 106.78), a break above targets 108.80 (June 11 High). On the downside, support is seen at 107.24 (June 24 Low), a break below could take it lower at 106.78 (June 25 Low).
GBP/USD: Sterling consolidated within narrow ranges as investors refrained from taking big positions amid growing uncertainty about who will be Britain's next prime minister and on worries about whether the nation would be able to avoid a no-deal, chaotic exit from the European Union. The major traded flat at 1.2668, having hit a high of 1.2783 on Tuesday, it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at -113.26 (Highly Bearish) 0500 GMT. Investors’ attention will remain on the UK gross domestic product and total business investment figures, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2743 (June 5 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2642 (Jun. 21 Low), a break below targets 1.2611 (May 29 Low). Against the euro, the pound was trading flat at 89.73 pence, having hit a low of 89.81 on Thursday, it’s lowest since Jan. 15.
AUD/USD: The Australian dollar rallied to a 3-week peak, as investors speculate U.S.-China trade talks at the G20 meeting would manage to avert a new round of tariffs. The Aussie trades 0.05 percent up at 0.7010, having hit a high of 0.7012 earlier, it’s highest since Jun. 7. FxWirePro's Hourly Aussie Strength Index stood at 114.12 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6967 (5-DMA), a break below targets 0.6925 (June 12 Low). On the upside, resistance is located at 0.7029 (May 2 High), a break above could take it near 0.7069 (Apr. 30 High).
NZD/USD: The New Zealand dollar advanced to a 10-week high, after White House economic adviser Larry Kudlow said that Trump has agreed to no preconditions for the meeting, set to take place on Saturday at the G20 summit in Japan. The Kiwi trades 0.1 percent up at 0.6705, having touched a high of 0.6708 on Thursday, its highest level April 18. FxWirePro's Hourly Kiwi Strength Index was at 98.78 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6729 (Apr. 18 High), a break above could take it near 0.6782 (Apr. 15 High). On the downside, support is seen at 0.6644 (5-DMA), a break below could drag it below 0.6540 (May 27 Low).
Equities Recap
Asian shares tumbled amid growing uncertainty over whether the talks between U.S. President Donald Trump and Chinese President Xi Jinping this weekend will produce progress in ending the year-long trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent.
Tokyo's Nikkei slumped 0.3 percent to 21,275.92 points, Australia's S&P/ASX 200 index fell 0.7 percent to 6,618.80 points and South Korea's KOSPI plunged 0.1 percent to 2,131.50 points.
Shanghai composite index declined 0.6 percent to 2,978.66 points, while CSI 300 index traded 0.3 percent down at 3,824.83 points.
Hong Kong’s Hang Seng traded 0.5 percent lower at 28,475.60 points. Taiwan shares shed 0.4 percent to 10,730.83 points.
Commodities Recap
Crude oil prices declined in a cautious market, as traders eyed a scheduled meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G20 summit and next week's OPEC meeting. International benchmark Brent crude was trading 1.5 percent lower at $65.36 per barrel by 0526 GMT, having hit a high of $66.83 on Wednesday, its highest since May 30. U.S. West Texas Intermediate was trading 0.2 percent down at $59.14 a barrel, after rising as high as $59.90 on Wednesday, its highest since the May 23.
Gold prices surged and were heading for their best month in 3-years, as uncertainty loomed over whether highly anticipated trade talks between China and the United States would yield any progress in ending a year-long trade dispute. Spot gold was trading 0.8 percent up at $1,420.09 per ounce by 0529 GMT, having touched a high of $1,439.14 on Tuesday, its highest since May 14, 2013 and has risen nearly 8.8 percent so far this month, on track for its biggest monthly percentage gain since June 2016. U.S. gold futures climbed 0.7 percent to $1,422.20 an ounce.
Treasuries Recap
The Japanese government bond prices edged higher, with the benchmark 10-year JGB futures rising 0.08 point to 153.82, approaching a record high of 154.13 reached on June 21. Yields on 10-year cash bonds fell 1.5 basis points to minus 0.160 percent. The 20-year JGB yield declined 1 basis point to 0.235 percent. The 30-year JGB yield fell 1.5 basis points to 0.370 percent.
The Australian 10-year bond future was up 2.5 ticks at 98.6750, just off an all-time peak of 98.735.
The yields on New Zealand two-year paper were last at 1.18 percent, not far off a recent record low of 1.123 percent.
The Canadian government bond prices were higher across a flatter yield curve, with the 10-year rising 32 cents Canadian to yield 1.468 percent. Earlier in the session, the 10-year yield touched its highest since June 12 at 1.522 percent.
