Market Roundup
- China firms' Q2 revenue, hiring up but deleveraging poses risks -survey
- PBOC sets yuan mid point at 6.8053/dlr, strongest since June 19
- Trump growing frustrated with China, weighs trade steps -officials
- CNPC suspends fuel sales to N. Korea as risks mount -sources
- Japan plots delay to balancing budget without spooking markets, G20 partners
- RBNZ sees global uncertainty, housing as risks
- 'What's the rush' on interest rate hikes, asks Fed's Kashkari
- U.S. Senate Republicans delay vote on healthcare bill
- Cyber attack sweeps globe, researchers see 'WannaCry' link
Economic Data Ahead
- (0245 ET/0645 GMT) France Jun Consumer Conf, 103.00 eyed, last 102.00
- (0300 ET/0700 GMT) Spain May Retail Sales, 1.90% eyed, last 1.80
- (0400 ET/0800 GMT) Eurozone May Money-M3 Annual Growth, 5.00% eyed, last 4.90%
- (0400 ET/0800 GMT) Eurozone May Loans to Non-Fin, 2.40% eyed, last 2.40%
Key Events Ahead
- (0500 ET/0900 GMT) ECB's Mersch is chairing a Session in Portugal
- (0645 ET/1045 GMT) ECB's Lautenschlager speaks at a panel in Bonn, Germany
- (0730 ET/1130 GMT) ECB's Constancio is chairing a Panel in Portugal
- (0930 ET/1330 GMT) BoE's Carney speaks at policy panel in Portugal
- (0930 ET/1330 GMT) BOC's Poloz will give Panel remarks in Portugal
- (1030 ET/1430 GMT) ECB's Draghi participates in Policy Panel at Portugal
FX Beat
DXY: The dollar tumbled versus its major peers in the wake of a delay to a U.S. healthcare reform vote. The greenback against a basket of currencies traded 0.2 percent down at 96.32, having touched a low of 96.31 earlier, it’s lowest since Nov. 9. FxWirePro's Hourly Dollar Strength Index stood at -36.60 (Neutral) by 0500 GMT.
EUR/USD: The euro rallied to a 10-month high after the European Central Bank President Draghi cited that softer inflation is temporary and hinted the days of the central bank's aggressive stimulus are numbered. The European currency traded 0.1 percent up at 1.1346, having touched a high of 1.1355 earlier, its highest since Aug. 23. FxWirePro's Hourly Euro Strength Index stood at 83.14 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on Eurozone's M3 money supply and ECB President Draghi's speech, ahead of U.S. pending home sales for further clues on the pair. Immediate resistance is located at 1.1366 (Aug 18 High), a break above targets 1.1400. On the downside, support is seen at 1.1303 (78.6% retrace of 1.1118 and 1.1353), a break below could drag it near 1.1263 (61.8% retrace).
USD/JPY: The dollar eased from a 6-week high touched in the previous session after a vote on U.S. healthcare legislation was delayed. The major traded 0.1 percent down at 112.18, having hit a high of 112.46 the prior day, its highest since May 17. FxWirePro's Hourly Yen Strength Index stood at -106.61 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. pending home sales. Immediate resistance is located at 112.50, a break above targets 113.00. On the downside, support is seen at 111.62 (5-DMA), a break below could take it near 111.24 (10-DMA).
GBP/USD: Sterling steadied after rising to a near 3-week high above the 1.2800 handle in the prior session, as investors awaited the Bank of England Governor Carney's speech. On Tuesday, the central bank presented the Financial Stability Report, showing no surprises. Sterling traded up at 1.2814, having hit a high of 1.2859 the day before, its highest since June 09. FxWirePro's Hourly Sterling Strength Index stood at 5.77 (Neutral) by 0400 GMT. Investors’ focus will remain on the BoE Carney’s speech, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.2880, a break above could take it near 1.2921 (May 31 High). On the downside, support is seen at 1.2792 (21-DMA), a break below targets 1.2750. Against the euro, the pound traded 0.1 percent down at 88.56 pence, having hit a 2-week low of 88.62 in the previous session.
AUD/USD: The Australian dollar rallied above the 0.7600 handle following hawkish comments from ex-RBA board member Edwards. Moreover, a rise in the crude oil prices continued to support the upside in the major. The Aussie trades 0.3 percent up at 0.7608, having hit a high of 0.7624 the day before, it’s strongest since June 19. FxWirePro's Hourly Aussie Strength Index stood at 9.82 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7565 (5-DMA), a break below targets 0.7535 (June 22 Low). On the upside, resistance is located at 0.7620, a break above could take it near 0.7635 (June 14 High).
NZD/USD: The New Zealand dollar gained, reversing most of its previous session losses, as the U.S. dollar eased across the board. The Kiwi trades 0.3 percent up at 0.7291, having touched a peak of 0.7344 the day before, its strongest level since Feb. 2. FxWirePro's Hourly Kiwi Strength Index was at -63.55 (Bearish) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7320, a break above could take it near 0.7350. On the downside, support is seen at 0.7251 (10-DMA), a break below could drag it till 0.7171 (June 12 Low).
Equities Recap
Asian shares slumped following losses on the Wall Street in the wake of a delay to a U.S. healthcare reform vote, while the euro rallied to 10-month peak after European Central Bank President Mario Draghi hinted that the central bank could cut its stimulus this year.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.4 percent.
Tokyo's Nikkei edged down 0.5 percent to 20,123.36 points, Australia's S&P/ASX 200 index rose 0.6 percent to 5,750.00 points and South Korea's KOSPI declined 0.3 percent to 2,382.64 points.
Shanghai composite index fell 0.2 percent to 3,185.25 points, while CSI300 index was trading 0.3 percent down at 3,662.22 points.
Hong Kong’s Hang Seng was trading 0.4 percent lower at 25,720.44 points. Taiwan shares shed 1.2 percent to 10,390.55 points.
Commodities Recap
Crude oil prices rose for the fifth consecutive session, despite a report showing a rise in U.S. fuel and crude inventories, raising concerns over a persisting three-year supply glut. International benchmark Brent crude was trading 0.9 percent up at $46.57 per barrel by 0426 GMT, having hit a high of $47.03 the prior day, its strongest since Jun. 20. U.S. West Texas Intermediate traded 0.9 percent up at $44.05 a barrel, after falling as high as $44.42 on Tuesday, its strongest since Jun 20.
Gold prices rose, extending previous session gains, strengthened by lower equities and a weaker U.S. dollar after European Central Bank President Mario Draghi hinted the ECB could trim its stimulus this year. Spot gold rallied 0.5 percent to $1,252.10 per ounce by 0430 GMT, having hit a low of $1,235.26 on Monday, its lowest since May 16. U.S. gold futures for August delivery climbed 0.2 percent to $1,249.40 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.215 percent higher by 0.018 bps, while 5-year yield was 0.009 up at 1.833 percent.
The Australian bonds witnessed a sharp decline as investors involved in a massive global sell-off after the European Central Bank (ECB) President Mario Draghi remained slightly bullish in his commentary late Tuesday. The yield on the benchmark 10-year Treasury note jumped 7 basis points to 2.44 percent, the yield on 15-year note surged nearly 8 basis points to 2.80 percent and the yield on short-term 2-year traded 2-1/2 basis points higher at 1.68 percent.
The New Zealand bonds closed mixed Wednesday, following a subdued trading week that releases data of less economic significance. However, a heavy sell-off in the global bond market has limited the slight losses in yields. At the time of closing, the yield on the benchmark 10-year bond fell 1 basis point to 2.81 percent, the yield on 7-year note also slipped 1 basis point to 2.71 percent while the yield on short-term 2-year note ended 4-1/2 basis points higher at 2.01 percent.
The Canadian government bond prices were lower across the yield curve, with the two-year price down 13 Canadian cents to yield 0.975 percent and the 10-year declining 95 Canadian cents to yield 1.570 percent. The gap between Canada's two-year yield and its U.S. equivalent narrowed by 4.3 basis points to a spread of -40.6 basis points as Canadian bonds underperformed.
