Market Roundup
- North Korean, U.S. officials try narrowing differences on eve of Trump-Kim summit
- U.S.-Canada dispute escalates after tense G7; Trump renews criticism of Trudeau
- North Korea seen looking to China, not U.S., for help in any economic transformation
- Mexico leftist's pitch to Trump: growth, not walls to fix migration
- Japan Apr Machinery Orders YY, 9.6%, f'cast 3.9%, last -2.4%
- Japan Apr Machinery Orders MM, 10.1%, f'cast 2.8%, last -3.9%
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Apr Manufacturing Output YY, f'cast 3.1%, last 2.9%
- (0430 ET/0830 GMT) Great Britain Apr Industrial Output YY, f'cast 2.7%, last 2.9%
- (0430 ET/0830 GMT) Great Britain Apr Goods Trade Balance GBP, f'cast -11.35 bln, last -12.29 bln
- (0430 ET/0830 GMT) Great Britain Apr Goods Trade Balance non-EU, SA, GBP, f'cast -3.20 bln, last -3.64 bln
- (0430 ET/0830 GMT) Great Britain GB Apr Construction O/P Vol YY, f'cast -1.8%, last -4.9%
Key Events Ahead
- (0700 ET/1100 GMT) Riksbank executive board meeting - Stockholm
- (1100 ET/1500 GMT) Angela Merkel meets heads of the IMF, WTO, World Bank, ILO and OECD for talks - Berlin
- (1320 ET/1720 GMT) German Minister for Economic Affairs Peter Altmaier speaks at opening of CEBIT Business Fair – Hanover
FX Beat
DXY: The dollar index eased after U.S. President Donald Trump threw the G7's efforts into disarray following a verbal argument with Canadian Prime Minister Justin Trudeau. The greenback against a basket of currencies trades 0.1 percent down at 93.46, having touched a low of 93.21 on Thursday, its lowest since May 17. FxWirePro's Hourly Dollar Strength Index stood at -9.90 (Neutral) by 0500 GMT.
EUR/USD: The euro rose, reversing most of its previous session losses, ahead of the European Central Bank policy meeting on June 14, where it could signal intentions to start unwinding its massive bond-purchasing programme. The European currency traded 0.3 percent up at 1.1797, having touched a high of 1.1839 on Friday, its highest since May 16. FxWirePro's Hourly Euro Strength Index stood at 150.08 (Highly Bullish) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies, amid a lack of economic data from the U.S. docket. Immediate resistance is located at 1.1839 (Jun. 7 High), a break above targets 1.1896 (May 5 High). On the downside, support is seen at 1.1744 (5-DMA), a break below could drag it till 1.1693 (10-DMA).
USD/JPY: The dollar rebounded on the back of positive geopolitical news that Japan PM Abe and U.S. President Trump's meeting ended well, where Trump vowed to improve the trading relationship with Japan and stated that Abe assured Japan would invest more in the U.S. The major was trading 0.2 percent up at 109.77, having hit a high of 110.26 on Wednesday, its highest since May 23. FxWirePro's Hourly Yen Strength Index stood at -107.36 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 110.28, a break above targets 110.85 (May 17 Low). On the downside, support is seen at 108.95 (May 24 Low), a break below could take it lower 108.50.
GBP/USD: Sterling consolidated above the 1.3400 handle, as investors focused on the differences that persist between the European Union and Britain in agreeing on the terms of their relationship post-Brexit deal. The major traded flat at 1.3409, having hit a high of 1.3471 on Thursday, it’s highest since May 22. FxWirePro's Hourly Sterling Strength Index stood at 70.69 (Bullish) by 0500 GMT. Investors’ attention will remain on the UK goods trade balance, GDP estimate, industrial and manufacturing production figures, amid a lack of economic data from the U.S. docket. Immediate resistance is located at 1.3483 (May 21 High), a break above could take it near 1.3527 (May 18 High). On the downside, support is seen at 1.3343 (10-DMA), a break below targets 1.3305 (May 23 Low). Against the euro, the pound was trading 0.3 percent down at 87.97 pence, having hit a low of 88.37 pence on Thursday, it’s lowest since May 7.
AUD/USD: The Australian dollar rose above the 0.7600 handle, as trading was light with the country on holiday for the Queen's Birthday. The Aussie trades 0.1 percent up at 0.7603, having hit a high of 0.7676 on Wednesday; it’s highest since Apr. 23. FxWirePro's Hourly Aussie Strength Index stood at -108.18 (Highly Bearish) by 0500 GMT. Immediate support is seen at 0.7580, a break below targets 0.7552 (May 31 Low). On the upside, resistance is located at 0.7630 (5-DMA), a break above could take it near 0.7682 (Apr 23 High).
NZD/USD: The New Zealand dollar consolidated below recent peaks amid concerns over the possibility of new trade conflicts after a G7 meeting ended in disagreement. The Kiwi trades 0.2 percent up at 0.7040, having touched a high of 0.7060 on Wednesday, its highest level since Apr. 30. FxWirePro's Hourly Kiwi Strength Index was at 76.67 (Slightly Bullish) by 0500 GMT. Immediate resistance is located at 0.7089, a break above could take it near 0.7120. On the downside, support is seen at 0.6997 (June 5 Low), a break below could drag it below 0.6962.
Equities Recap
Asian shares reversed early session losses, as investors awaited the U.S.-North Korea summit that might ease regional tensions and also the key central bank meetings later this week.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.3 percent.
Tokyo's Nikkei rose 0.6 percent to 22,818.12 points, and South Korea's KOSPI advanced 0.7 percent to 2,468.17 points.
Shanghai composite index fell 0.8 percent to 3,042.33 points, while CSI300 index was trading 0.4 percent down at 3,765.03 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 31,040.03 points. Taiwan shares shed 0.1 percent to 11,149.23 points.
Commodities Recap
Crude oil prices declined, amid a downward pull in rising Russian production and U.S. oil drilling activity rising at its highest since 2015. International benchmark Brent crude was trading 0.2 percent down at $76.27 per barrel by 0440 GMT, having hit a low of $73.80 on Tuesday, its lowest since May 8. U.S. West Texas Intermediate was trading 0.1 percent down at $65.53 a barrel, after falling as low as $64.26 on Tuesday, its lowest since Apr. 10.
Gold prices edged up as the dollar eased ahead of key central bank policy meetings and the U.S.-North Korea summit this week. Spot gold was 0.05 percent up at $1,299.10 per ounce at 0443 GMT, having hit a high of $1,303.09 on Thursday, its highest price level since May 31. U.S. gold futures for August delivery were 0.1 percent higher at $1,303.40 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.964 percent higher by 0.03 bps, while 5-year yield was 0.027 bps up at 2802 percent.
The Japanese government bonds traded range-bound at the start of the week on Monday as investors await the global central banks’ monetary policy decisions this week. The yield on the benchmark 10-year JGB note, which moves inversely to its price, traded 1/2 basis point lower at 0.046 percent, the yield on the long-term 30-year note remained steady at 0.719 percent and the yield on short-term 1-year moved 1/2 basis point down to -0.127 percent.
The New Zealand bonds remained mixed at the time of closing Monday as investors wait to watch the Federal Open Market Committee’s (FOMC) monetary policy decision, scheduled to be unveiled on June 13 at 18:00 GMT, followed by the press conference. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slid 1/2 basis point to 3.01 percent, the yield on the long-term rose 1/2 basis point to 3.33 percent and the yield on short-term 2-year closed 1 basis point lower at 1.91 percent.
