Market Roundup
Trump asked Comey to end investigation of Michael Flynn -source
Japan's Mar core machinery orders +1.4% m/m vs forecast +2.1%, last 1.5%
Machinery orders -0.7% y/y vs forecast +0.6%, last 5.6%
BOJ's Kuroda: Told Abe will continue ultra-easy policy
BOJ's Kuroda expected to serve another term as governor -poll
S&P affirms Australia's AAA rating, retains negative outlook
Australia May consumer confidence m/m -1.1% vs last -0.7%
Australia Q1 wage price index up 0.5%, last 0.5%
Australia annual wage growth stood unchanged at 1.9%
Australia annual pay hike in private sector 1.8 pct; 2.4 pct in public
China fixes yuan midpoint at 6.8635/dollar, strongest level in 3-mths
China deleveraging to continue as goals not yet achieved - state paper
Hong Kong, China regulators approve "Bond Connect" scheme
US finds Japanese, Turkish rebar exports dumped
World’s rich confident they can scale wall of global risk – Reuter’s survey
S. Korea says it wants to reopen communications with North amid missile crisis
Economic Data Ahead
(0430 ET/0830 GMT) Great Britain Mar ILO Unemployment Rate, +4.7% forecast; last +4.7%
(0430 ET/0830 GMT) Great Britain Mar Avg Earnings (Ex-Bonus), +2.2% forecast; last +2.2%
(0430 ET/0830 GMT) Great Britain Mar Avg Wk Earnings 3M y/y, +2.4% forecast; last +2.3%
(0430 ET/0830 GMT) Great Britain Apr Claimant Count Unemp Chng, 7.5k forecast; last 25.5k
(0500 ET/0900 GMT) Eurozone Apr Inflation Final, +0.4% m/m, +1.9% y/y forecast; last +0.8%, +1.9%
(0500 ET/0900 GMT) Eurozone Apr Inflation Ex Food & Energy, +1.2% y/y, +0.5% m/m forecast; last +0.8%, 1.2%
Key Events Ahead
N/A ECB governing council non-monetary policy meeting in Frankfurt
(0530 ET/0930 GMT) Germany 30Y 1.000 bln auction
(0730 ET/1130 GMT) Riksbank's Martin Floden will discuss current monetary policy
(1400 ET/1800 GMT) BoE's John Haldane speaks at Finance Foundation's annual lecture
FX Beat
DXY: The dollar eased across the board in the wake of the political uncertainty surrounding the US President Trump. The greenback against a basket of currencies traded 0.2 percent down at 97.98, having hit a low of 97.91 earlier, it’s lowest since Nov. 9. FxWirePro's Hourly Dollar Strength Index stood at -65.21 (Bearish) by 0500 GMT.
EUR/USD: The euro rose above the 1.1100 handle to hit a fresh 6-month high as the greenback eased on heightened turmoil in Washington and downbeat housing data that reduced expectations of a June Federal Reserve rate hike. Moreover, increasing odds of Chancellor Merkel winning the German elections later this year and Macron’s victory in the French Presidential election continued to extend support to the major. The European currency traded 0.2 percent up at 1.1110, having touched a high of 1.1116 earlier, its highest since Nov. 9. FxWirePro's Hourly Euro Strength Index stood at 63.48 (Bullish) by 0400 GMT. Investors’ attention will remain on Eurozone's consumer price index and core CPI data, amid a lack of relevant economic data from the U.S. docket. Immediate resistance is located at 1.1150, a break above targets 1.1200. On the downside, support is seen at 1.1056 (78.6% retracement of 1.0839 and 1.1116 ), a break below could drag it near 1.1010 (61.8% retrace).
USD/JPY: The dollar tumbled to a near 2-week low amid renewed political uncertainty surrounding the U.S. President Trump over his disclosure of classified information to Russia and Comey memo. Moreover, downbeat economic data dampened expectations of June Fed rate hike. The pair traded 0.5 percent down at 112.49, having touched a low of 112.36 earlier, its lowest since May 5. FxWirePro's Hourly Yen Strength Index stood at 56.61 (Bullish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, as the U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 112.83 (23.6% retracement of 114.36 and 112.36), a break above targets 113.00. On the downside, support is seen at 112.00 (May 5- Low), a break below could take it near 111.78 (May 2 Low).
GBP/USD: Sterling rose, extending gains for the third consecutive session, amid persisting broad-based U.S. dollar weakness. Meanwhile, investors expect an increase in the hourly earnings data due to be reported alongside the employment report later in the day. Sterling trades 0.1 percent up at 1.2930, having hit a high of 1.2957 the prior session, its strongest since May 10. FxWirePro's Hourly Sterling Strength Index stood at -0.60 (Neutral) by 0400 GMT. Investors’ attention will remain on UK employment report, amid a lack of U.S economic data. Immediate resistance is located at 1.2957 (Previous Session High), a break above could take it near 1.2987 (May 10 High). On the downside, support is seen at 1.2880 (May 15 Low), a break below targets 1.2850. Against the euro, the pound traded 0.1 percent down at 85.86 pence, having hit a fresh 1-1/2 month low of 86.01 earlier in the session.
AUD/USD: The Australian dollar declined, halting its 5-day rally as the global political uncertainty overshadowed the uptick in the wage price inflation and the strong Yuan fix by the PBoC. The economy's wage price inflation rose 0.5 percent in the first quarter, while on an annualized basis it came in at 1.9 percent, both in line with estimates. The Aussie trades 0.1 percent down at 0.7415, having hit a high of 0.7445 on Monday, it’s strongest since May. 3. FxWirePro's Hourly Aussie Strength Index stood at 53.15 (Bullish) by 0500 GMT. Investors will continue to track political developments, in absence of relevant U.S economic releases. Immediate support is seen at 0.7393 (10-DMA), a break below targets 0.7368 (May 12 Low). On the upside, resistance is located at 0.7445 (May 15 High), a break above could take it near 0.7459 (21-DMA).
NZD/USD: The New Zealand dollar continued to gain against its U.S. counterpart as persistent bearish sentiment surrounding the greenback underpinned the bid tone around the major. The Kiwi trades 0.2 percent up at 0.6896, having retreated from a low of 0.6817 touched on Thursday, its weakest since Jun. 03. FxWirePro's Hourly Kiwi Strength Index was at 48.74 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment. Immediate resistance is located at 0.6918 (23.6% retracement of 0.6950 and 0.6817), a break above could take it near 0.6950. On the downside, support is seen at 0.6849 (Previous Session Low), a break below could drag it till 0.6800.
Equities Recap
Asian stocks declined, while the greenback tumbled to a 6-month low against a basket of currencies on reports that President Donald Trump asked then-FBI Director James Comey to end an investigation into his former national security advisor.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.5 percent.
Tokyo's Nikkei fell 0.5 percent to 19,811.25 points, Australia's S&P/ASX 200 index declined 1.1 percent to 5,785.40 points and South Korea's KOSPI eased 0.1 percent to 2,291.77 points.
Shanghai composite index edged down 0.1 percent to 3,108.95 points, while CSI300 index was trading 0.3 percent lower at 3,418.61 points.
Hong Kong’s Hang Seng was trading 0.1 percent lower at 25,315.34 points. Taiwan shares shed 0.2 percent to 10,013.67 points.
Commodities Recap
Crude oil prices declined, extending previous session losses after data showed an increase in U.S. crude inventories, fuelling concerns that markets will remain oversupplied despite efforts by Saudi Arabia and Russia to extend output cuts. International benchmark Brent crude was trading 0.06 percent down at $51.19 per barrel by 0420 GMT, having hit a high of $52.58 on Monday, its strongest since Apr. 21. U.S. West Texas Intermediate fell 0.1 percent to $48.16 a barrel, after rising as high as $49.63 on Monday, its highest since Apr. 28.
Gold prices rallied to a two-week high as equity markets slipped and the dollar declined after downbeat U.S. housing data and reports that U.S. President Donald Trump sought an end to an FBI probe into his former security adviser. Spot gold advanced 0.6 percent to $1,243.12 per ounce by 0423 GMT, after touching its strongest since May 3 at $1,244.79 earlier. U.S. gold futures were up 0.5 percent at $1,242.90 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.295 percent lower by 0.031 bps, while 5-year yield was 0.035 bps down at 1.815 percent.
The Australian government 10-year bond yields slumped, tracking strength in U.S. Treasuries. The yield on the benchmark 10-year Treasury note slumped nearly 5 basis points to 2.54 percent, the yield on 15-year note remained flat at 2.99 percent and the yield on short-term 2-year also remained steady at 1.66 percent.
The New Zealand bonds gained at the time of closing despite witnessing a rise in dairy prices at the latest GlobalDairyTrade (GDT) price auction. At the time of closing, the yield on the benchmark 10-year bond slumped 2-1/2 basis points to 2.93 percent, the yield on 7-year note also plunged 2-1/2 basis points to 2.60 percent and the yield on the short-term 2-year note too traded 1 basis point lower at 1.94 percent.
The Canadian government bond prices rose across much of a flatter yield curve in sympathy with U.S. Treasuries. The 10-year rose 21 Canadian cents to yield 1.571 percent, while the gap between the 2-year and 10-year yields narrowed 2.8 basis points to a spread of 87 basis points as longer-dated maturities outperformed.
