Market Roundup
- Trump-Kim summit set for Singapore's Sentosa Island -White House
- Mnuchin said to urge Trump to exempt Canada from tariffs: ABC
- EU expects no breakthrough on U.S. tariffs at G7 summit -EU official
- Japan April real wages unchanged in blow to consumer spending
- Fed's next rate hike may further rock U.S. bond market
- Aiming at Trump strongholds, Mexico hits back with trade tariffs
- China c.bank injects net 203.5 bln yuan with hefty 1-yr MLF rollover
- Australia Q1 GDP YY, 3.1%, f'cast 2.8%, last 2.4%
- Australia Q1 GDP QQ, 1.0%, f'cast 0.9%, last 0.4%, rvsd 0.5%
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- (0530 ET/0930 GMT) Panelist at the Futures Industry Association International Derivatives Expo, David Bailey, speaks - London
- (0600 ET/1000 GMT) BoE's Silvana Tenreyro briefs during visit - Belfast
- (0715 ET/1115 GMT) Irish finance minister speaks at event - Dublin
- (0930 ET/1330 GMT) ECB's Pentti Hakkarainen speaks on "The Digitalisation Of Banking - Supervision Implications" - Lisbon
- (1210 ET/1610 GMT) Deutsche Bundesbank's Johannes Beermann speaks on "Our money - a journey through time" - Dresden
- (1310 ET/1710 GMT) ECB's Ignazio Angeloni participates in panel discussion on "Completing the Banking Union" - Brussels
- N/A BoE's Ian McCafferty takes part in Q&A session on LBC radio – London
FX Beat
DXY: The dollar index tumbled, extending losses for the third straight session on speculation the United States could scrap the North American Free Trade Agreement (NAFTA). The greenback against a basket of currencies trades 0.2 percent down at 93.74, having touched a low of 93.71 on Monday, its lowest since May 24. FxWirePro's Hourly Dollar Strength Index stood at 50.12 (Bullish) by 0500 GMT.
EUR/USD: The euro consolidated within narrow ranges, as investors started to focus on the European Central Bank's policy meeting next week, with traders expecting the ECB to announce on when its quantitative easing program would end. The European currency traded 0.05 percent down at 1.1715, having touched a high of 1.1744 on Monday, its highest since May 24. FxWirePro's Hourly Euro Strength Index stood at 65.12 (Bullish) by 0500 GMT. Investors’ attention will remain on U.S. trade balance and non-farm productivity data, amid a lack of economic data from the Eurozone docket. Immediate resistance is located at 1.1758 (21-DMA), a break above targets 1.1789 (May 23 High). On the downside, support is seen at 1.1641 (May 31 Low), a break below could drag it till 1.1518 (May 30 Low).
USD/JPY: The dollar rose after White House economic adviser Larry Kudlow said that President Donald Trump is considering holding separate talks with Canada and Mexico. The pair was trading 0.1 percent up at 109.91, having hit a low of 108.11 last week, its lowest since May 8. FxWirePro's Hourly Yen Strength Index stood at -79.49 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. trade balance and non-farm productivity data. Immediate resistance is located at 110.28, a break above targets 110.85 (May 17 Low). On the downside, support is seen at 109.35 (5-DMA), a break below could take it lower 108.95 (May 24 Low).
GBP/USD: Sterling surged to a near 2-week peak after a survey released on Tuesday showed companies in Britain's dominant services sector grew more quickly than expected in May. However, the upside remained capped amid uncertainty surrounding Britain's planned exit from the European Union in March 2019 and the Bank of England's path for monetary tightening. Sterling traded 0.1 percent up at 1.3406, having hit a high of 1.3416 earlier, it’s highest since May 24. FxWirePro's Hourly Sterling Strength Index stood at -43.78 (Neutral) by 0500 GMT. Investors’ attention will remain on the BoE MPC member Tenreyro's speech, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3483 (May 21 High), a break above could take it near 1.3527 (May 18 High). On the downside, support is seen at 1.3320 (10-DMA), a break below targets 1.3204 (May 29 Low). Against the euro, the pound was trading 0.05 percent down at 87.44 pence, having hit a low of 88.09 pence on Friday, it’s highest since May 15.
AUD/USD: The Australia dollar rallied to an over 1-month peak after data showed Australia's economy grew 1.0 percent in the first three months of this year from an upwardly revised 0.5 percent the previous quarter. The Aussie trades 0.6 percent up at 0.7664, having hit a high of 0.7672 earlier; it’s highest since Apr. 23. FxWirePro's Hourly Aussie Strength Index stood at 51.43 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7594 (5-DMA), a break below targets 0.7552 (May 31 Low). On the upside, resistance is located at 0.7682 (Apr 23 High), a break above could take it near 0.7711 (Apr. 9 High).
NZD/USD: The New Zealand dollar advanced to a 1-month high despite a poor showing for prices at a fortnightly auction for dairy. The Kiwi trades 0.4 percent up at 0.7053, having touched a high of 0.7055 earlier, its highest level since Apr. 30. FxWirePro's Hourly Kiwi Strength Index was at 54.81 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7089, a break above could take it near 0.7120. On the downside, support is seen at 0.7005 (5-DMA), a break below could drag it below 0.6962.
Equities Recap
Asian shares surged, boosted by gains in the tech sector, while the euro consolidated with narrow ranges on concerns about Italy's debt.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent.
Tokyo's Nikkei gained 0.4 percent to 22,625.73 points, Australia's S&P/ASX 200 index rallied 0.5 percent to 6,025.10 points.
Shanghai composite index rose 0.05 percent to 3,115.22 points, while CSI300 index was trading 0.2 percent down at 3,839.94 points.
Hong Kong’s Hang Seng was trading 0.7 percent higher at 31,303.83 points. Taiwan shares added 0.9 percent to 11,201.83 points.
Commodities Recap
Crude oil prices gained, pulling away from lows hit in the previous session, after industry data showed U.S. crude inventories fell by 2 million barrels, compared with expectations for a decrease of 1.8 million barrels. International benchmark Brent crude was trading 0.8 percent up at $75.64 per barrel by 0446 GMT, having hit a low of $73.80 on Tuesday, its lowest since May 8. U.S. West Texas Intermediate was trading 0.4 percent up at $65.80 a barrel, after falling as low as $64.26 on Tuesday, its lowest since Apr. 10.
Gold prices edged up on the back of a weaker U.S. dollar and lower Treasury yields, however, expectations of a U.S. rate rise next week capped the upside. Spot gold was 0.05 percent up at $1,296.60 per ounce at 0452 GMT, having hit a high of $1,307.65 last month, its highest price level since May 15. U.S. gold futures for August delivery were 0.1-percent lower at $1,301.60 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2940 percent higher by 0.022 bps, while 5-year yield was 0.022 bps up at 2782 percent.
The Japanese government bonds remained flat during late Asian session as investors remained side-lined in a muted trading week ahead of the country’s first quarter 2018 gross domestic product (GDP) data, scheduled to be released on June 7 by 23:50GMT which shall add further direction to the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, traded tad higher at 0.05 percent, the yield on the long-term 30-year note hovered around 0.73 percent and the yield on short-term 2-year remained flat at -0.12 percent.
The Australian government bonds slumped following better-than-expected Q1 economic growth data, which registered the fastest annual expansion in almost 2-years as it entered its 27th year of growth without a recession. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 2 basis points to 2.756 percent, the yield on the long-term 30-year Note jumped 1-1/2 basis points to 3.263 percent and the yield on short-term 2-year up 2-1/2 basis points to 2.073 percent.
The New Zealand bonds declined at the time of closing after dairy prices improved at the latest GlobalDairyTrade (GDT) price auction, albeit still remaining on the downside amid an otherwise, silent market session that witnessed data of little economic significance. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, rose 1 basis point to 2.77 percent, the yield on the long-term remained flat at 3.34 percent and the yield on short-term 2-year too closed 1 basis point higher at 1.90 percent.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 3.5 Canadian cents to yield 1.917 percent and the 10-year climbed 23 Canadian cents to yield 2.251 percent.
