Market Roundup
- U.S., China agree tentative trade truce ahead of G20 summit - SCMP
- Trump-Xi trade meeting set for Saturday morning in Osaka -White House
- BOJ's deputy chief warns of heightening economic risks as trade war bites
- Trump renews criticism of Japan-US alliance before G20 summit
- China's industrial profits up 1.1% in May as sales quicken
- Japan May Retail Sales YY, 1.2%, 1.2% f'cast, 0.5% prev, 0.4% r'vsd
- New Zealand Jun NBNZ Business Outlook, -38.1, -32.0 prev
- Boris Johnson says chances of no-deal Brexit are 'a million-to-one'
- Democrats clash on healthcare, border in scrappy first U.S. presidential debate
- No 'boots on the ground' in Iran dispute, Trump says; cites 'unlimited time' for new deal
- N.Korea says time running out for fresh U.S. talks - KCNA
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Jun Consumer Confidence, 111.3 f'cast, 111.8 prev
- (0500 ET/0900 GMT) EZ Jun Business Climate, 0.23 f'cast, 0.30 prev
- (0500 ET/0900 GMT) EZ Jun Economic Sentiment, 104.6 f'cast, 105.1 prev
- (0500 ET/0900 GMT) EZ Jun Industrial Sentiment, -3.1 f'cast, -2.9 prev
- (0500 ET/0900 GMT) EZ Jun Services Sentiment, 12.4 f'cast, 12.2 prev
- (0500 ET/0900 GMT) EZ Jun Consumer Confid. Final, -7.2 f'cast, -7.2 prev
- (0800 ET/1200 GMT) Germany Jun HICP Prelim YY, 1.3% f'cast, 1.3% prev
- (0800 ET/1200 GMT) Germany Jun CPI Prelim YY, 1.4% f'cast, 1.4% prev
Key Events Ahead
- (0540 ET/0940 GMT) BoE Executive Director, Markets, Andrew Hauser, delivers a speech at Risk Live 2019 in London
FX Beat
DXY: The dollar index rose to a 6-day peak, boosted by comments from U.S. Treasury Secretary Steven Mnuchin that the trade deal between the United States and China is about 90 percent complete. The greenback against a basket of currencies traded 0.2 percent up at 96.37, having touched a low of 95.84 on Tuesday, its lowest since Mar. 21. FxWirePro's Hourly Dollar Strength Index stood at 38.26 (Neutral) by 0500 GMT.
EUR/USD: The euro declined after a senior government source stated that Italy aims to secure a deal with the European Commission over its contested public finances without setting a new goal for next year's budget deficit. The European currency traded 0.2 percent down at 1.1351, having touched a high of 1.1412 on Tuesday, its highest since Mar. 21. FxWirePro's Hourly Euro Strength Index stood at -39.80 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone economic sentiment indicator, and German consumer price index, ahead of the U.S. unemployment benefit claims, gross domestic product, and pending home sales. Immediate resistance is located at 1.1437 (Mar. 21 High), a break above targets 1.1474 (Dec. 21 High). On the downside, support is seen at 1.1319 (Mar 18 Low), a break below could drag it below 1.1277 (Mar. 13 Low).
USD/JPY: The dollar rallied to a 7-day peak, as risk sentiment improved after data showed China's industrial profits rose 1.1 percent in May from a year earlier to 565.6 billion yuan, bolstered by improving sales and better margins. The pair was trading 0.3 percent up at 108.10, having hit a low of 106.78 on Tuesday, its lowest since Jan. 3. FxWirePro's Hourly Yen Strength Index stood at -55.09 (Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, gross domestic product, and pending home sales. Immediate resistance is located at 108.30 (78.6% retracement of 108.72 and 106.78), a break above targets 108.80 (June 11 High). On the downside, support is seen at 107.37 (5-DMA), a break below could take it lower at 106.78 (June 25 Low).
GBP/USD: Sterling consolidated within narrow as investors refrained from taking big positions after Boris Johnson, the top contender to replace Prime Minister Theresa May reaffirmed his desire to take Britain out of the European Union with or without an agreement. The major traded flat at 1.2686, having hit a high of 1.2783 on Tuesday, it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at -14.03 (Neutral) 0500 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of data from the UK docket. Immediate resistance is located at 1.2743 (June 5 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2642 (Jun. 21 Low), a break below targets 1.2611 (May 29 Low). Against the euro, the pound was trading 0.1 percent up at 89.51 pence, having hit a low of 89.76 on Wednesday, it’s lowest since Jan. 15.
AUD/USD: The Australian dollar surged to a 2-1/2 week peak, as risk appetite improved by a report the United States and China had tentatively agreed on another truce in their extended trade dispute. The Aussie trades 0.1 percent up at 0.6990, having hit a high of 0.6999 earlier, it’s highest since Jun. 10. FxWirePro's Hourly Aussie Strength Index stood at 92.59 (Slightly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6925 (June 12 Low), a break below targets 0.6881 (May 24 Low). On the upside, resistance is located at 0.7022 (June 7 High), a break above could take it near 0.7048 (May 7 High).
NZD/USD: The New Zealand dollar eased from a 2-1/2 month high after an ANZ Bank survey showed domestic business sentiment weakened in June, as the economy faced rising pressure both at home and abroad. The Kiwi trades 0.1 percent down at 0.6675, having touched a high of 0.6692 on Wednesday, its highest level April 19. FxWirePro's Hourly Kiwi Strength Index was at 133.11 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6729 (Apr. 18 High), a break above could take it near 0.6782 (Apr. 15 High). On the downside, support is seen at 0.6621 (5-DMA), a break below could drag it below 0.6540 (May 27 Low).
Equities Recap
Asian shares climbed on news that Washington and Beijing were laying out an agreement that would help avert the next round of tariffs on an additional $300 billion of Chinese imports.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.6 percent.
Tokyo's Nikkei rallied 1.2 percent to 21,338.17 points, Australia's S&P/ASX 200 index surged 0.4 percent to 6,666.30 points and South Korea's KOSPI advanced 0.6 percent to 2,133.53 points.
Shanghai composite index rose 0.5 percent to 2,991.99 points, while CSI 300 index traded 0.9 percent up at 3,827.83 points.
Hong Kong’s Hang Seng traded 1.2 percent higher at 28,572.75 points. Taiwan shares added 1.1 percent to 10,773.90 points.
Commodities Recap
Crude oil prices consolidated within narrow ranges, as traders await the G20 summit in Japan and a meeting of OPEC and other oil producers to decide on an extension of output cuts. International benchmark Brent crude was trading 0.05 percent higher at $66.23 per barrel by 0521 GMT, having hit a high of $66.83 on Wednesday, its highest since May 30. U.S. West Texas Intermediate was trading 0.1 percent down at $59.09 a barrel, after rising as high as $59.90 on Wednesday, its highest since the May 23.
Gold prices declined, extending previous session losses, as investors looked forward to trade talks between Washington and Beijing in Japan. Spot gold was trading 0.2 percent down at $1,406.28 per ounce by 0527 GMT, having touched a high of $1,439.14 on Friday, its highest since May 14, 2013. U.S. gold futures were 0.2 percent lower at $1,412.80 an ounce.
Treasuries Recap
The Japanese government bond prices dipped, with the benchmark 10-year JGB yield rising 1 basis point to minus 0.140 percent. The 30-year yield climbed 2 basis points to 0.385 percent.
The Australian three-year futures retreated 6 ticks to 99.060.
The Canadian government bond prices were lower across the yield curve. The two-year fell 9.5 Canadian cents to yield 1.454 percent and the 10-year declined 59 Canadian cents to yield 1.497 percent. The 10-year yield touched its highest intraday since June 12 at 1.499 percent.
