Market Roundup
- BOJ keeps policy steady, revises up view on consumption
- BOJ maintains short-term interest rate target at -0.1%
- BOJ: Consumption shows "increasing resilience"
- BOJ leaves econ assessment unchanged, ups view on overseas eco
- China's Apr U.S. govt. debt grew to $1.092 tln, Mar $1.088 tln
- Japan's stake slips to $1.107 tln in Apr, Mar $1.119 tln
- U.S. stock ETF inflows balloon to largest of 2017: Lipper
- U.S.-listed stock ETFs attract $17.7 bln in Jun 14 wk: Lipper
- MFs records $6.8 bln in withdrawals: Lipper
- Foreign CB US debt holdings +$11.8 bln to $3.27 trillion June 7 week
- Treasuries $11.7 bln to $2.95 trillion, agencies -$72 mln to $262.8 bln
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Apr Trade Bal (EU), last 1.250 bln
- (0500 ET/0900 GMT) Eurozone May Inflation Final, -0.1% m/m, +1.4% y/y eyed; last +0.4%, +1.4%
- (0500 ET/0900 GMT) Eurozone May Inflation Ex-Food, Energy, -0.1% m/m, 0.9% y/y eyed; last +0.5%, +1.2%
Key Events Ahead
- (0230 ET/0630 GMT) BOJ Gov Kuroda hosts press conference
- (0400 ET/0800 GMT) Riksbank General Council Meeting
- N/A ECB's Nouy, Villeroy de Galhau speak in Paris
- N/A ECB's Constancio to participate in EU council meeting
FX Beat
DXY: The dollar gained versus its major peers as upbeat U.S. economic data revived investors' hope that the U.S. central bank will stick with its plan to hike rates. The greenback against a basket of currencies traded up at 97.53, having touched a high of 97.56 earlier, it’s highest since May 30. FxWirePro's Hourly Dollar Strength Index stood at 27.66 (Neutral) by 0500 GMT.
EUR/USD: The euro steadied after declining to a 2-week low in the previous session as investors awaited Eurozone's CPI data for the month of May. The economy's annualized core inflation growth is expected to have slowed to 0.9 percent from the previous month’s 1.2 percent rise, however, a bigger drop in the CPI reading would weigh over the major. The European currency traded flat at 1.1145, having touched a low of 1.1132 the day before, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at -25.07 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone Consumer price index, ahead of the U.S. building permits, housing starts, Michigan consumer sentiment and labor market conditions index for further clues on the pair. Immediate resistance is located at 1.1194 (5-DMA), a break above targets 1.1225 (10-DMA). On the downside, support is seen at 1.1132 (Previous Session Low), a break below could drag it near 1.1100.
USD/JPY: The dollar rallied to a fresh 2-week high after the Bank of Japan left monetary policy unchanged as expected. However, the upside was limited as the central bank upgraded its assessment of private consumption and overseas growth, indicating its confidence that an economic recovery was broadening and gaining momentum. The major traded 0.3 percent up at 111.23, rebounding from a low of 108.81 touched on Wednesday, its lowest since Apr. 20. FxWirePro's Hourly Yen Strength Index stood at -126.82 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. building permits, housing starts, Michigan consumer sentiment, labor market conditions index and Dallas Fed President Kaplan’s speech. Immediate resistance is located at 111.71 (June 2 High), a break above targets 112.00. On the downside, support is seen at 110.74 (21-DMA), a break below could take it near 110.33 (61.8 % retracement of 108.81 and 111.27).
GBP/USD: Sterling gained against the euro and the dollar after three members of Bank of England's policy committee surprised markets by voting for a hike in interest rates. The major traded 0.5 percent up at 1.2772, retreating from a low of 1.2635 hit on Friday, its weakest since Apr 18. FxWirePro's Hourly Sterling Strength Index stood at 73.95 (Bullish) by 0400 GMT. Investors’ focus now shifts on the BoE quarterly bulletin ahead of series of U.S. economic data scheduled later in the day. Immediate resistance is located at 1.2807 (50.0% retrace of 1.2977 and 1.2365), a break above could take it near 1.2847 (38.2% retrace). On the downside, support is seen at 1.2700, a break below targets 1.2635. Against the euro, the pound traded 0.1 percent up at 87.24 pence, having hit a 1-week high of 87.19 earlier.
AUD/USD: The Australian dollar consolidated within a narrow range but was aiming for a firmer weekly finish as domestic data showed a sharp 42,000 jump in employment in May and a drop in the jobless rate to a four-year low of 5.5 percent. The Aussie trades up at 0.7581, having hit a high of 0.7635 on Wednesday, it’s strongest since Apr 3. FxWirePro's Hourly Aussie Strength Index stood at 30.31 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7555 (5-DMA), a break below targets 0.7530 (10-DMA). On the upside, resistance is located at 0.7635 (June 14 High), a break above could take it near 0.7662 (Mar 31 High).
NZD/USD: The New Zealand dollar further steadied near a 4-month high as investors remained cautious ahead of the RBNZ policy announcement on June 22, where it is widely expected to hold rates steady until late 2019 given a slowing economy. The Kiwi trades flat at 0.7209, having touched a peak of 0.7319 on Wednesday, its strongest level since Feb. 8. FxWirePro's Hourly Kiwi Strength Index was at 33.55 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7250, a break above could take it near 0.7300. On the downside, support is seen at 0.7185 (Previous Session Low), a break below could drag it till 0.7171 (June 12 Low).
Equities Recap
Asian shares were little changed as investors hunted for catalysts, while the Japanese yen hovered near a two-week low against the dollar after the Bank of Japan left monetary policy unchanged as expected.
MSCI's broadest index of Asia-Pacific shares outside Japan steadied but was on track to end the week down 0.7 percent.
Tokyo's Nikkei rose 0.7 percent to 19,968.13 points, Australia's S&P/ASX 200 index gained 0.1 percent to 5,771.50 points and South Korea's KOSPI lost 0.1 percent to 2,358.76 points.
Shanghai composite index fell 0.2 percent to 3,125.38 points, while CSI300 index was trading 0.2 percent down at 3,521.11 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 25,643.95 points. Taiwan shares added 0.7 percent to 10,156.73 points.
Commodities Recap
Crude oil prices steadied after declining to a six-week low in the previous session as an ongoing supply overhang weighed on markets. International benchmark Brent crude was trading 0.3 percent up at $46.91 per barrel by 0418 GMT, having hit a low of $46.70 on Thursday, its weakest since May 5. U.S. West Texas Intermediate traded 0.5 percent at $44.44 a barrel, after falling as low as $44.21 the prior day earlier, its lowest since May 5.
Gold priced traded near a three-week low hit in the previous session on a firmer dollar and strong U.S. economic data and was poised for a second straight weekly fall. Spot gold was trading down at $1,253.06 per ounce by 0423 GMT, having hit its weakest since May 24 at $1,251.32 on Thursday. U.S. gold futures for August delivery rose 0.1 percent, to $1,256 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.172 percent higher by 0.01 bps, while 5-year yield was 0.011 bps up at 1.773 percent.
The Japanese government bonds traded modestly lower after the Bank of Japan (BoJ) maintained its benchmark interest rate unchanged at its 2-day monetary policy meeting, concluded early today. The benchmark 10-year bond yield hovered around 0.05 percent, the long-term 30-year bond yields rose nearly 1 basis point to 0.80 percent and the yield on the short-term 3-year note traded 1/2 basis point higher at -0.10 percent.
The Australian bonds plunged on the last trading day of the week as investors booked profits after a long rally this week. The yield on the benchmark 10-year Treasury note jumped nearly 5-1/2 basis points to 2.42 percent, the yield on 15-year note surged 5 basis points to 2.78 percent while the yield on short-term 2-year traded nearly 4 basis points at 1.69 percent.
The New Zealand bonds slumped at the time of closing as investors remained sidelined in any major trading activity amid a silent session that witnessed data of little economic significance. At the time of closing, the yield on the benchmark 10-year bond surged 5 basis points to 2.79 percent, the yield on 7-year note jumped 3-1/2 basis points to 2.68 percent and the yield on short-term 2-year note ended 2 basis points higher at 1.95 percent.
The Canadian government bond prices were lower across the yield curve, with the two-year price down 7.5 Canadian cents to yield 0.918 percent and the benchmark 10-year falling 38 Canadian cents to yield 1.533 percent.
