Market Roundup
- Australia June RBA cash rate stays flat at 1.5 % (forecast 1.5 %) vs previous 1.5 %.
- Australia Q1 Net Exports Contribution, 0.3%, forecast 0.5%, last -0.5%.
- Australia Q1 Current Account Balance, -10.50 bln, forecast-9.95 bln, last 14.00 bln, revised -14.70 bln.
- White House says 'powerful' sanctions to remain on North Korea.
- China pushes state banks into home rental market at their own risk.
- UK consumers hit the shops after early 2018 freeze – surveys.
- Australia central bank holds rates at 1.5%, as expected.
- At delicate moment, U.S. weighs warship passage through Taiwan Strait.
- Mexico set to impose 20 pct tariff on U.S. pork legs –sources.
- China May Caixin Services PMI, 52.9, last 52.9.
- Japan April All Household Spending YY, -1.3%, forecast 0.8%, last -0.7%.
- Japan May Services PMI, 51.0, last 52.5.
Economic Data Ahead
- (0350 ET/0750 GMT) France May Markit Composite PMI forecast 54.5, last 54.5.
- (0350 ET/0750 GMT) France May Markit Services PMI, forecast 54.3, last 54.3.
- (0355 ET/0755 GMT) Germany May Markit Services PMI, forecast 52.1, last 52.1.
- (0355 ET/0755 GMT) Germany May Markit Composite Final PMI, forecast 53.1, last 53.1.
- (0400 ET/0800 GMT) euro zone May Markit Services Final PMI, forecast 53.9, last 53.9.
- (0400 ET/0800 GMT) euro zone May Markit Composite Final PMI, forecast 54.1, last 54.1.
- (0430 ET/0830 GMT) UK May Markit/CIPS Services PMI, forecast 53.0, last 52.8.
- (0500 ET/0900 GMT) UK April Retail Sales YY, forecast 1.7%, last 0.8%.
Key Events Ahead
- (0330 ET/0730 GMT) BoE's Anil Kashyap speaks at National Bank of Slovakia event in Bratislava.
- (0330 ET/0730 GMT) Czech Republic, Austrian and Switzerland Central Bank governors speak at conference in Bratislava.
- (0600 ET/1000 GMT) BoE's Jon Cunliffe speaks at Futures Industry Association International Derivatives Expo in London.
- (0720 ET/1120 GMT) BoE's Martin Etheridge speaks at Money 20/20 Europe conference in London.
- (0900 ET/1300 GMT) ECB's Mario Draghi speaks at an event in Frankfurt.
- (1330 ET/1730 GMT) Deutsche Bundesbank's Jens Weidmann speaks on "Reforms for a stable monetary union" in Brussels.
FX Recap
USD: The dollar index, which measures the greenback against a basket of six major currencies, was up 0.1 percent at 94.063.
EUR/USD: The euro trades almost flat against U.S. dollar and currently trading around $1.1686 mark. A consistent close below $1.1657 will drag the parity down towards key supports around $1.1510 and $1.1390 levels respectively. Alternatively, current upside movement will drag the parity higher towards key resistances around $1.1724, $1.1822, $1.1938 and $1.1996 marks respectively.
USD/JPY: The Japanese yen falls gradually against U.S. dollar on the back of lower than expected households spending data. It made intraday high at 110.00 and low at 109.77 levels. A sustained close above 109.81 is required to take the parity higher towards key resistance around 112.96 marks. Alternatively, a daily close below 109.81 will drag the parity down towards key supports around 108.72, 107.90, 106.71 and 105.32 marks respectively.
GBP/USD: The sterling trades almost against U.S. dollar concerns about Brexit clouded the outlook for the currency after a brief rally encouraged by stronger-than-expected data on Britain's construction sector. The pound fell 3.43 percent versus the dollar in May, its biggest monthly decline since 2016, as weakness in the UK economy and non-UK factors including new U.S. trade tariffs impacted the currency. Sterling started June on the front foot, buoyed by data showing signs of a possible strengthening of the British economy after a sluggish first quarter. A sustained close below $1.3249 requires for dragging the parity down towards key support around $1.3024 mark. On the other side, key resistances are seen at $1.3387 and $1.3490 levels respectively.
AUD/USD: The Australian dollar depreciates against major peers after the Reserve Bank of Australia remained on hold in its monetary policy meeting held early today, keeping the benchmark interest rate at 1.50 percent, citing sustainable economic growth and expectations of reaching the 3 percent GDP target, on an average this year. Pair made intraday high at $0.7655 and low at $0.7628 mark. Intraday bias remains bearish till the time pair holds key resistance at $0.7666 marks. Immediate support was seen at $0.7505 mark.
NZD/USD: The New Zealand dollar remains almost unchanged against U.S. dollar. Pair made intraday high at $0.7039 and low at $0.7018 levels. A sustained close above $0.7027 is required to take the parity higher towards $0.7150 mark. Alternatively reversal from key resistance will take the parity down towards key supports around $0.6851 levels.
Equities Recap
Japan’s Nikkei was trading 0.21 pct higher at 22,522.55 points.
Shanghai composite index to open down 0.1 pct at 3,088.01 points and China's CSI300 index to open up 0.1 pct at 3,811.29 points.
South Korea’s kospi was trading around 0.07 percent higher at 2,448.01 points.
Hong Kong’s hang seng was trading 0.24 percent higher at 31,070.02 points.
Australia's S&P/ASX 200 index was down 0.37 pct at 6,003.50 points in early trade.
Taiwanese stock was trading around 0.32 percent lower at 11,075.75 points.
India’s NSE Nifty was trading around 0.50 percent lower at 10,575.80 points while BSE Sensex was trading 0.35 points lower at 34,876.88 points.
Commodities Recap
Oil prices rebounded on Tuesday after falling in the previous session on expectations that inventories in the United States may decline but increasing U.S. production and concerns that OPEC may raise output continue to weigh on sentiment. Brent crude futures added 14 cents, or 0.19 percent, to $75.43 a barrel at 0301 GMT, after settling down 2 percent at $75.29 on Monday. U.S. West Texas Intermediate (WTI) crude was up 32 cents, or 0.49 percent, at $65.07 a barrel. It finished the previous session 1.6 percent lower at $64.75.
Gold prices held steady on Tuesday after three days of falls, as the dollar rose to a near two-week high against the yen after strong U.S. economic data sparked expectations of more U.S. interest rate hikes. Spot gold was nearly unchanged at $1,291.40 per ounce by 0112 GMT. U.S. gold futures for August delivery were down 0.2 percent at $1,295.40 per ounce.
Treasuries Recap
Australian government bonds slumped Tuesday after the Reserve Bank of Australia (RBA) remained on hold in its monetary policy meeting held early today, keeping the benchmark interest rate at 1.50 percent, citing sustainable economic growth and expectations of reaching the 3 percent GDP target, on an average this year.
The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, jumped 2 basis points to 2.75 percent, the yield on the long-term 30-year Note remained tad higher at 3.23 percent and the yield on short-term 2-year remained flat at 2.05 percent by 04:30 GMT.
New Zealand government bonds slumped at the time of closing Tuesday, tracking a similar movement in the United States Treasuries after the US jobs market report released overnight cheered market participants, leading to confidence among investors on the economy's prospects and the likelihood that the Federal Reserve will be forced to increase rates at a fast pace.
At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, jumped 4 basis points to 2.81 percent, the yield on the long-term 20-year note climbed 5-1/2 basis points to 3.34 percent and the yield on short-term 2-year closed 1/2 basis point higher at 1.89 percent.
