Market Roundup
- Gold steadies as surprise U.S. jobs rebound dents demand
- Oil prices extend gains on OPEC+ cuts
- China May exports slip back into contraction
- China May imports worst in 4 years
Economic Data Ahead
- (0430 ET/0830 GMT) EZ Sentix Investor Confidence (Jun)
Key Events Ahead
- (0600 ET/1000 GMT) OPEC-Press Conference
FX Beat
DXY: The dollar index held near recent lows, supported by recent gains in long-term Treasury yields as investors await the outcome of a two-day U.S. Federal Reserve meeting ending on Wednesday. The greenback against a basket of currencies traded flat at 96.96, having touched a low of 96.44 on Friday, its lowest since March 12.
EUR/USD: The euro plunged below the 1.1300 handle following weaker than expected German industrial production figures. On Friday, the major rose to a near 3-month peak on a wave of optimism after the European Central Bank said last week it will increase bond purchases to help the bloc's weakest economies. The European currency traded 0.05 percent down at 1.1286, having touched a high of 1.1383 last session, its highest since March 10. Investors’ attention will remain on a series of data from Eurozone economies and EZ Sentix investors confidence, amid a lack of economic data from the U.S. docket. Immediate resistance is located at 1.1340, a break above targets 1.1390. On the downside, support is seen at 1.1232 (5-DMA), a break below could drag it below 1.1194.
USD/JPY: The dollar eased after rising to a 2-1/2 month peak in the prior session on data showing a surprising recovery in U.S. employment in May after the economy suffered record job losses in April. The jobless rate fell to 13.3 percent last month from a post-World War II high of 14.7 percent in April, offering hope that the U.S. economy is starting to stabilise after the pandemic triggered a wave of job cuts. The major was trading 0.1 percent down at 109.48, having hit a high of 109.85 on Friday, its highest since March 26. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 109.90, a break above targets 110.29. On the downside, support is seen at 109.14, a break below could take it near at 108.76 (5-DMA).
GBP/USD: Sterling rose, extending gains for the eighth straight session, as the Bank of England played down the prospect of negative rates soon. On Thursday, the Bank of England’s executive director for markets said that a negative interest rate would not be introduced in the near term. The major traded 0.3 percent up at 1.2699, having hit a high of 1.2731 on Friday, it’s highest since April 30. Immediate resistance is located at 1.2740, a break above could take it near 1.2785. On the downside, support is seen at 1.2615, a break below targets 1.2574 (5-DMA). Against the euro, the pound was trading 0.2 percent up at 88.88 pence, having hit a high of 88.66 last week, it’s highest since May 15.
AUD/USD: The Australian dollar rose to its strongest level since January after data showed a smaller-than-expected fall in Chinese exports. Exports in May fell 3.3 percent from a year earlier, after a surprising 3.5 percent gain in April, and compared with a 7 percent drop forecast. While imports tumbled 16.7 percent compared with a year earlier, worsening from a 14.2 percent decline the previous month and recording the sharpest decline since January 2016. The Aussie trades 0.05 percent up at 0.6971, having hit a high of 0.7012 on Friday, it’s highest since Jan 2. Immediate resistance is located at 0.7030, a break above could take it near 0.7082. On the downside, support is seen at 0.6904 (5-DMA), a break below targets 0.6882.
Equities Recap
Asian shares gained after a surprise recovery in U.S. employment boosted hopes of a quicker global economic revival.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.2 percent.
Tokyo's Nikkei rallied 1.4 percent to 23,178.10 points, South Korea's KOSPI jumped 0.05 percent to 2,182.28 points.
Shanghai composite index rose 0.3 percent to 2,938.57 points, while CSI 300 index traded 0.6 percent up at 4,023.17 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 24,791.44 points. Taiwan shares shed 1.2 percent to 11,610.32 points.
Commodities Recap
Crude oil rallied to a new multi-month peaks after major producers agreed to extend a deal on record output cuts to the end of July and as China’s crude imports hit an all-time high in May. International benchmark Brent crude was trading 2.9 percent higher at $43.08 per barrel by 0528 GMT, having hit a high of $43.29 earlier, its highest since March 9. U.S. West Texas Intermediate was trading 2.4 percent up at $40.00 a barrel, after rising as high as $40.42 earlier, its highest since March 9.
Gold prices steadied after tumbling to a more than 1-month low in the last session on an unexpected jump in U.S. employment that boosted hopes for a swift economic recovery. Spot gold was trading 0.2 percent up at $1,688.31 per ounce by 0539 GMT, having touched a low of $1,670.43 on Friday, its lowest since April 21. U.S. gold futures rose 0.5 percent to $1,691.40.
Treasuries Recap
On Friday, the benchmark 10-year yield was up 10.5 basis points at 0.9252 percent, its first time above 0.9 percent since March 20. The 2-year U.S. Treasury yield was up 2.2 basis points at 0.2161 percent.
