Market Roundup
- RBNZ holds rate at record lows of 1.75%
- Policy to remain accommodative for "considerable period"-RBNZ
- BOJ Iwata - No need to raise rates now, ultra-easy stance way to go
- Needed to achieve 2% inflation target, calls for abandoning target wrong
- MoF flow data w/e Jun 17 – Japanese buy more foreign -bonds, net Y1.09 tln
- Foreign stocks also bought, foreigners sell Japan stocks, JGBs, bills
- China not facing same pressure as Fed to shrink balance sheet-PBOC adviser
- In high-level talks, U.S. asks China to do more to rein in NoKorea
Economic Data Ahead
- (0400 ET/0800 GMT) Norway Central Bank Rate Decision, 0.50% eyed. last 0.50%
- (1000 ET/1400 GMT) Eurozone Jun Consumer Confid. Flash, -3.00 eyed, last -3.30
Key Events Ahead
- (0420 ET/0820 GMT) ECB's Hakkarainen, Irish c.bank speak at a banking conf in Dublin
- (0430 ET/0830 GMT) Norway C.Bank holds press conference
- (0630 ET/1030 GMT) UK 30Y 2.250 bln auction
- (0800 ET/1200 GMT) BoE's Chris Salmon speaks at the City Mental Health Alliance
- (1400 ET/1800 GMT) Kristin Forbes gives speech at the London Business School
- N/A General Council meeting of the ECB in Frankfurt
- N/A Swiss Nat Bank's Maechler speaks at event on collateral policy
FX Beat
DXY: The dollar tumbled against the Japanese yen as a continuous decline in crude oil prices supported risk-off sentiment. The greenback against a basket of currencies traded 0.1 percent down at 97.46, having touched a high of 97.87 earlier in the week, it’s highest since May 19. FxWirePro's Hourly Dollar Strength Index stood at -46.37 (Neutral) by 0500 GMT.
EUR/USD: The euro slightly edged up amid a steady fall seen in the dollar against its main peers, as U.S. Treasury yields continued to trade in the negative territory. The European currency traded up at 1.1168, having touched a low of 1.1119 on Tuesday, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at 49.52 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone economic bulletin report, ahead of U.S. unemployment benefits claims and housing price index for further clues on the pair. Immediate resistance is located at 1.1183 (10-DMA), a break above targets 1.1269 (June 8 High). On the downside, support is seen at 1.1132 (June 15 Low), a break below could drag it near 1.1100.
USD/JPY: The dollar declined, extending losses for the third consecutive session, as a continuous slide in the crude oil and expectations that the next Fed rate hike could be delayed until December, weighed heavily on the pair. The major traded 0.2 percent down at 111.08, having hit a high of 111.78 on Tuesday, its highest since May 26. FxWirePro's Hourly Yen Strength Index stood at 16.16 (Neutral) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. unemployment benefits claims and housing price index. Immediate resistance is located at 111.50, a break above targets 111.95 (May 25 High). On the downside, support is seen at 110.63 (61.8 % retracement of 108.81 and 111.78), a break below could take it near 110.28 (50.0 % retracement).
GBP/USD: Sterling steadied after rebounding from a two-month low in the previous session following hawkish Bank of England Chief Economist Andy Haldane’s comments. BoE chief economist Haldane signalled he would support a rise in interest rates in the second half of this year. Sterling traded up at 1.2671, having hit a low of 1.2589 the prior day, its weakest since Apr 18. FxWirePro's Hourly Sterling Strength Index stood at -19.60 (Neutral) by 0400 GMT. Investors’ focus will remain on the UK CBI industrial trends survey, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.2739 (61.8% retrace of 1.2978 and 1.2589), a break above could take it near 1.2785 (50% retrace). On the downside, support is seen at 1.2600, a break below targets 1.2521 (Apr 18 Low). Against the euro, the pound traded flat at 88.13 pence, having hit a 1-week low of 88.45 the prior day.
AUD/USD: The Australian dollar rebounded after falling to a 1-week low earlier in the session on the back of slumping crude oil prices. The Aussie trades 0.1 percent up at 0.7556, having hit a low of 0.7541 earlier, it’s weakest since June 14. FxWirePro's Hourly Aussie Strength Index stood at -40.50 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7541 (Session Low), a break below targets 0.7519 (June 9). On the upside, resistance is located at 0.7585 (5-DMA), a break above could take it near 0.7635 (June 14 High).
NZD/USD: The New Zealand dollar rallied after the central bank held official cash rates at record lows but sounded less dovish than the market initially expected. The Reserve Bank of New Zealand maintained an upbeat view on the economy, despite latest dismal GDP numbers. The Kiwi trades 0.6 percent up at 0.7256, having touched a peak of 0.7319 last week its strongest level since Feb. 8. FxWirePro's Hourly Kiwi Strength Index was at 80.35 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7300, a break above could take it near 0.7350. On the downside, support is seen at 0.7200, a break below could drag it till 0.7171 (June 12 Low).
Equities Recap
Asian shares rose, while the dollar eased against the Japanese yen as oil prices struggled to climb off a 10-month low hit overnight on concerns over a supply glut.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.3 percent.
Tokyo's Nikkei edged up 0.1 percent to 20,152.21 points, Australia's S&P/ASX 200 index gained 0.1 percent to 5,716.90 points and South Korea's KOSPI added 0.3 percent to 2,365.01 points.
Shanghai composite index rose 0.7 percent to 3,179.29 points, while CSI300 index was trading 1.0 percent up at 3,625.32 points.
Hong Kong’s Hang Seng was trading 0.5 percent higher at 25,834.44 points. Taiwan shares added 0.5 percent to 10,399.06 points.
Commodities Recap
Crude oil prices declined on worries over whether OPEC-led output cuts would be able to rein in a three-year glut. International benchmark Brent crude was trading down at $44.76 per barrel by 0409 GMT, having hit a low of $44.34 the day before, its weakest since Nov. 14. U.S. West Texas Intermediate traded 0.1 percent up at $42.52 a barrel, after falling as low as $42.03 on Wednesday, its lowest since Nov 8.
Gold prices rallied as an easing greenback flattened U.S. Treasury yields to their lowest in nearly a decade. Spot gold gained 0.5 percent to $1,252.40 per ounce at 0419 GMT, after falling as low as $1,240.73 on Wednesday, its lowest since May 17. U.S. gold futures for August delivery gained 0.6 percent to $1,253.10 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.152 percent lower by 0.002 bps, while 5-year yield was 0.003 down up at 1.764 percent.
The Australian bonds witnessed a sharp rally, owing to ongoing global uncertainties amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note slumped 1-1/2 basis points to 2.39 percent, the yield on 15-year note plunged 2 basis points to 2.74 percent and the yield on short-term 2-year traded 1 basis point lower at 1.68 percent.
The New Zealand bonds ended on the upside after the Reserve Bank of New Zealand remained unchanged in its monetary policy decision, revealed early today while maintaining a balanced outlook of the economy. At the time of closing, the yield on the benchmark 10-year bond slumped 1-1/2 basis points to 2.78 percent, the yield on 7-year note also slipped 1-1/2 basis points to 2.69 percent and the yield on short-term 2-year note traded flat at 1.99 percent.
The Canadian government bond prices were mostly higher across the yield curve, with the two-year up half a Canadian cent to yield 0.908 percent and the 10-year rising 10 cents to yield 1.489 percent.
