Market Roundup
•Japan BSI Large Manufacturing Conditions (Q2): -1.8, 4.2 forecast, 3.8 previous
•Japan BSI Large Manufacturing Conditions (Q2): -1.8, 4.2 forecast, 3.8 previous
•Japan Foreign Bonds Buying: 197.5B, -184.4B previous
•Japan Foreign Investments in Japanese Stocks: -701.0B, -491.5B previous
•Australia MI Inflation Expectations (Jun): 5.5%, 5.6% previous
Looking Ahead Economic Data (GMT)
• 10:30 Italian 3-Year BTP Auction: 2.98% previous
• 10:30 Italian 7-Year BTP Auction: 3.55% previous
Looking Ahead Events And Other Releases (GMT
•11:00 EU Eurogroup Meetings
Currency Summaries
EUR/USD : The euro recovered some ground against dollar on Thursday as investors awaited the European Central Bank's policy announcement on Thursday. The European Central Bank is all but certain to raise interest rates on Thursday in the hope of nipping higher inflation in the bud before a surge in energy costs triggered by the Iran war spreads more broadly across the euro zone economy.The well-telegraphed move would come as inflation in the 21-country currency bloc is already above 3%, well in excess of the ECB's 2% target, and economic growth is very weak - a backdrop that has economists split over the case for tighter policy.ECB policymakers, some of whom had already pushed for action in April, are nonetheless expected to press ahead, seeking to keep a lid on inflation expectations and to safeguard their credibility after being slow to react to a post-pandemic inflation spike in 2022. Immediate resistance can be seen at 1.1633(SMA20), an upside break can trigger rise towards 1.1673(50%fib).On the downside, immediate support is seen at 1.1505(61.8%fib), a break below could take the pair towards 1.1481(Lower BB).
GBP/USD: Sterling wobbled on Thursday as new U.S. strikes in the Middle East undermined sentiment.The currency markets have been muted this week, with a renewed cycle of tit-for-tat strikes between the U.S. and Iran eroding hopes for a near-term peace agreement in the Middle East.The United States began a fresh round of strikes overnight in Iran as President Donald Trump vowed even more attacks if no peace deal is secured. The latest escalation kept markets jittery, pushing oil prices higher . Meanhile, The Fed is expected to hold rates steady in Kevin Warsh's first meeting as Fed chair next week, with a strong majority of economists in a Reuters poll predicting that the U.S. central bank will keep rates unchanged for the rest of 2026.Immediate resistance can be seen at 1.3463(SMA 20), an upside break can trigger rise towards 1.3526(50%fib).On the downside, immediate support is seen at 1.3317(50%fib), a break below could take the pair towards1.3265(Lower BB).
AUD/USD: Australian dollar traded largely flat on Thursday but the broader tone remained tilted to the downside as negative sentiment continues to build due to escalalating Middle East conflict. Geopolitical tensions intensified further following reports of explosions across Iran after U.S. officials signaled strikes on several key facilities, prompting investors to adopt a more cautious stance.Oil prices surged after Iran reiterated threats to close the Strait of Hormuz, a vital global energy shipping route.Market participants are awaiting U.S. economic data later on Thursday, including weekly initial jobless claims, expected at 219,000, and the May Producer Price Index report, both of which could influence expectations for Federal Reserve policy. In Australia, interest rate expectations remain firmly anchored, with futures markets assigning a 99% probability that the Reserve Bank of Australia will leave its cash rate unchanged at next Tuesday's policy meeting. Immediate resistance can be seen at 0.7170(38.2%fib), an upside break can trigger rise towards 0.7189(SMA 20).On the downside, immediate support is seen at 0.7027(50%fib), a break below could take the pair towards 0.7000(50%fib).
USD/JPY: The dollar consolidated gains on Thursday as ongoing Middle East tensions continued to weigh on the yen.Despite the gradual grind higher, Japanese authorities have so far refrained from intervening in the FX market, suggesting a continued wait-and-see approach.Market participants note that the Ministry of Finance (MOF) may still be conserving intervention capacity, potentially coordinating any future action with the Bank of Japan to maximise impact.On monetary policy expectations, a 25-basis-point hike by the BOJ is already largely priced in, but markets are increasingly focused on whether policymakers could deliver a larger move or signal additional tightening in July.Speculation is also building around Governor Kazuo Ueda’s absence from key discussions, adding uncertainty and fueling market chatter about internal policy dynamics. Immediate resistance can be seen at 160.85(23.6%fib) an upside break can trigger rise towards 161.06(Higher BB) .On the downside, immediate support is seen at 159.68(SMA 20) a break below could take the pair towards 159.00(Psychological level).
Equities Recap
Asian stocks turned lower on Thursday after a tentative early rise, dragged by a Wall Street selloff sparked by a hot U.S. inflation reading and renewed U.S. strikes on Iran that drove oil higher.
Japan’s Nikkei 225 was up by 0.19% , Hang Seng was down at 1.09%, China A50 was down at 1.15%
Commodities Recap
Gold prices stabilized after touching a six-month low on Thursday as markets awaited key U.S. inflation data for cues on the Federal Reserve’s policy outlook.
Spot gold rose 0.1% to $4,077.39 per ounce by 0429 GMT, after hitting its lowest since November 21 at $4,022.09 earlier in the day. U.S. gold futures for August delivery were down 0.8% at $4,098.90.
Oil prices surged on Thursday after Iran declared the Strait of Hormuz closed following additional U.S. strikes, while President Trump warned of further attacks if no peace deal is reached.
Brent futures rose $1.48, or 1.59%, to $94.58 a barrel as of 0243 GMT, while U.S. West Texas Intermediate (WTI) crude climbed $1.71, or 1.90%, to $91.74. U.S. crude futures gained more than $3 earlier in the session.
