Market Roundup
- Japan May retail sales -1.6% m/m, +2.0% y/y, +2.6% y/y eyed, Apr +1.4%, +3.2%
- MoF flow data w/e 6/24 -Japanese light buyers of foreign bonds, stocks
- Foreigners sell net Y1.46 trln JGBs, good Nikkei trading but net change small
- Global coordination important as world economy changes -China vice finmin
- China should balance between deleveraging and support for some sectors -IMF
- Moody's gives China-backed AIIB a triple-A credit rating
- Australia job vacancies rise to six-year peak -ABS
- New Zealand business confidence hits nine-month high in June -ANZ survey
- Insurers' financial strength disclosure falls short of requirements -RBNZ
- Fed gives big U.S. banks a green light for buyback, dividend plans
- Singapore, global economy will be able adjust to Fed hikes -MAS
Economic Data Ahead
- (0200 ET/0600 GMT) Germany Jul GfK Consumer Sentiment, 10.40 eyed, last 10.40
- (0300 ET/0700 GMT) Spain Jun HICP Flash, 1.50% y/y eyed, last 2.00
- (0430 ET/0830 GMT) Great Britain May Mortgage Approvals, 64.00k eyed, last 64.65k
- (0430 ET/0830 GMT) Great Britain May Mortgage Lending, 2.60bln eyed, last 2.73bln
- (0430 ET/0830 GMT) Great Britain May BOE Consumer Credit, 1.40bln eyed, last 1.53 eyed
- (0500 ET/0900 GMT) Eurozone Jun Consumer Confid. Final, -1.30 eyed, last -1.30
- (0500 ET/0900 GMT) Eurozone Jun Business Climate, 0.94 eyed, last 0.90
- (0500 ET/0900 GMT) Eurozone Jun Economic Sentiment, 109.50 eyed, last 109.20
- (0800 ET/1200 GMT) Germany Jun HICP Prelim, 0.00% m/m, 1.30% y/y eyed; last -0.20%, 1.40%
Key Events Ahead
- (0230 ET/0630 GMT) BOJ's Yutaka Harada speaks at capital markets seminar in Tokyo
- (0815 ET/1215 GMT) Austria's Finmin Hans Joerg Schelling to speak at a conf.
- (1430 ET/1830 GMT) ECB's Ignazio Angeloni speaks at a seminar in Florence
- N/A Austrian National Bank gov speaks at economic conf. (to June 30)
FX Beat
DXY: The dollar continued to decline versus its major peers, hitting multi-month lows as investors wagered on policy tightening in Europe and Britain. The greenback against a basket of currencies traded 0.1 percent down at 95.91, having touched a low of 95.75 earlier, it’s lowest since Oct. 3. FxWirePro's Hourly Dollar Strength Index stood at -47.26 (Neutral) by 0500 GMT.
EUR/USD: The euro rallied to a fresh 1-year high against the dollar as investors priced in tighter monetary policy in Europe. The European currency traded 0.3 percent up at 1.1406, having touched a high of 1.1419 earlier, its highest since June 24. FxWirePro's Hourly Euro Strength Index stood at 81.09 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on Eurozone's economic sentiment indicator, ahead of U.S. unemployment claims benefits, gross domestic product and personal consumption expenditure for further clues on the pair. Immediate resistance is located at 1.1454, a break above targets 1.1500. On the downside, support is seen at 1.1353 (78.6% retrace of 1.1118 and 1.1353), a break below could drag it near 1.1303 (61.8% retrace).
USD/JPY: The dollar edged down as series of mixed economic data recently raised doubts on whether the Federal Reserve would be able to stay on its planned tightening path. However, the downside was limited as investors worried that the Bank of Japan will be in any position to begin winding back its stimulus in near term. The major traded down at 112.28, having hit a high of 112.46 on Tuesday day, its highest since May 17. FxWirePro's Hourly Yen Strength Index stood at -115.90 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. unemployment claims benefits, gross domestic product, personal consumption expenditure, and Fed Bullard's speech. Immediate resistance is located at 112.50, a break above targets 113.00. On the downside, support is seen at 111.82 (5-DMA), a break below could take it near 111.52 (10-DMA).
GBP/USD: Sterling rose to a fresh 3-week high against the dollar after Bank of England Governor Mark Carney stated that an interest rate hike was probably necessary and the central bank would discuss this in the near term. The major traded 0.2 percent up at 1.2952, having hit a high of 1.2975 earlier, its highest since June 08. FxWirePro's Hourly Sterling Strength Index stood at 97.14 (Slightly Bullish) by 0400 GMT. Investors’ focus will remain on the UK Mortgage Approvals and Consumer Credit data, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.2300, a break above could take it near 1.3047 (May 18 High). On the downside, support is seen at 1.2891 (78.6% retracement of 1.2589 and 1.2975), a break below targets 1.2850. Against the euro, the pound traded flat at 88.01 pence, having hit a 7-month low of 88.79 in the previous session.
AUD/USD: The Australian dollar advanced to a 3-month peak as a bounce in the price of iron ore and upbeat domestic new home sales figures strengthened the bid tone around the major. A separate report showed that the Australian labor market continued to improve, as job vacancies in three months to May rose 1.5 percent, and on annualized basis, it rose 11.4 percent; the highest reading since 2010. The Aussie trades 0.3 percent up at 0.7656, having hit a high of 0.7664 earlier, it’s strongest since Mar. 30. FxWirePro's Hourly Aussie Strength Index stood at 45.06 (Neutral) by 0400 GMT. Investors will continue to digest upbeat domestic data, ahead of U.S. economic releases. Immediate support is seen at 0.7636 (78.6% retracement of 0.7535 and 0.7664), a break below targets 0.7614 (61.8% retracement). On the upside, resistance is located at 0.7679 (Mar. 30 High), a break above could take it near 0.7700.
NZD/USD: The New Zealand dollar rose, extending previous session gains after a report published by ANZ showed New Zealand’s business confidence jumped to fresh 9-month high at 24.8 in June from 14.9 previous. The Kiwi trades 0.2 percent up at 0.7316, having touched a peak of 0.7344 on Tuesday, its strongest level since Feb. 2. FxWirePro's Hourly Kiwi Strength Index was at -98.99 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7350, a break above could take it near 0.7370. On the downside, support is seen at 0.7281 (5-DMA), a break below could drag it till 0.7255 (10-DMA).
Equities Recap
Asian shares advanced as the prospect of higher interest rates bolstered banking stocks, while the euro and sterling hit multi-month highs as investors wagered on policy tightening in Europe and Britain.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.8 percent to its highest since May 2015.
Tokyo's Nikkei edged up 0.4 percent to 20,207.83 points, Australia's S&P/ASX 200 index climbed 0.9 percent to 5,807.10 points and South Korea's KOSPI gained 0.6 percent to 2,395.62 points.
Shanghai composite index rose 0.2 percent to 3,181.05 points, while CSI300 index was trading 0.3 percent up at 3,656.34 points.
Hong Kong’s Hang Seng was trading 0.8 percent higher at 25,889.81 points. Taiwan shares added 0.3 percent to 10,421.65 points.
Commodities Recap
Crude oil rose, extending gains for a sixth straight session, supported by a decline in U.S. output, however, ongoing worries about global oversupply continued to weigh on prices. International benchmark Brent crude was trading up at $47.44 per barrel by 0321 GMT, having hit a high of $47.58 earlier, its strongest since Jun. 19. U.S. West Texas Intermediate traded 0.1 percent up at $44.91 a barrel, after rising as high as $45.00, its strongest since Jun 20.
Gold prices extended gains for the third consecutive day as the dollar hovered near 9-month lows on bets that central banks in Europe and Britain are preparing to scale back monetary stimulus. Spot gold 0.2 percent up at $1,251.64 per ounce at 0338 GMT, rebounding from a low of $1,235.26 hit on Monday, its lowest since May 16. U.S. gold futures for August delivery rose 0.1 percent to $1,249.70 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.224 percent higher by 0.001 bps, while 5-year yield was 0.003 up at 1.818 percent.
The Australian bonds slumped as the massive sell-off continued in global debt markets in response to the European Central Bank (ECB) President Mario Draghi’s comments late Tuesday and Wednesday. The yield on the benchmark 10-year Treasury note jumped 4-1/2 basis points to 2.51 percent, the yield on 15-year note also surged 4-1/2 basis points to 2.86 percent and the yield on short-term 2-year traded 2-1/2 basis points higher at 1.72 percent.
The New Zealand government bonds eased, sending yields 7.5 basis points higher at the long end of the curve.
The Canadian government bond prices were lower across a flatter yield curve. The two-year notes fell 10.5 Canadian cents to yield 1.039 percent, the first move above 1 percent in nearly 2-1/2 years, while the 10-year declined 38 Canadian cents to yield 1.614 percent.
