Market Roundup
- EUR/USD -0.05%, USD/JPY -0.08%, GBP/USD 0.53%, EUR/GBP -0.56%
- DXY -0.02%, DAX 0.92%, FTSE -0.54%, Brent -1.29%, Gold 0.06%
- EU Markit Serv Final PMI, 53.8, 53.9 f'cast, 53.9 prev
- EU Markit Comp Final PMI, 54.1, 54.1 f'cast, 54.1 prev
- FR Budget Balance, -54.34 bln, -33.10 bln prev
- FR Markit Serv PMI, 54.3, 54.3 f'csat, 54.3 prev
- FR Markit Comp PMI, 54.2, 54.5 f'cast, 54.5 prev
- DE Markit Services PMI, 52.1, 52.1 f'cast, 52.1 prev
- DE Markit Comp Final PMI, 53.4, 53.1 f'cast, 53.1 prev
- GB BRC Retail Sales YY, 2.80%, -4.20% prev
- GB Markit/CIPS Serv PMI, 54, 53 f'cast, 52.8 prev
- Italy's "government for change" seeking parliament's backing
- Spain's Socialists to name Maria Jesus Montero as new budget minister - PM aide
- Financial services to remain 'national priority' after Brexit - UK minister
- Qatar accuses Saudis of reckless behaviour after military threat report
- Gold steady amid rising risk appetite and U.S. rate-hike prospects
- Brent crude tilts lower as investors weigh supply rises
Economic Data Ahead
- (0830 ET/1230 GMT) CA Labor Productivity Rate, 0.2% prev
- (0855 ET/1255 GMT) US Redbook YY, 4.3% prev
- (0945 ET/1345 GMT) US Markit Comp Final PMI, 55.7 prev
- (0945 ET/1345 GMT) US Markit Svcs PMI Final, 55.7 prev
- (1000 ET/1400 GMT) US ISM N-Mfg PMI, 57.5 f'cast, 56.8 prev
- (1000 ET/1400 GMT) US JOLTS Job Openings, 6.400 mln f'cast, 6.550 mln prev
Key Events Ahead
- (0720 ET/1120 GMT) The Head of Division at Bank of England, Martin Etheridge, speaks in London
- (1330 ET/1730 GMT) Jens Weidmann, president of Deutsche Bundesbank, speaks in Brussels
FX Beat
DXY: U.S dollar index has formed a minor top around 95.10 and started to decline from that level. It is currently trading around 94.09. In the weekly chart, index upside capped by 200 W MA at 94.85 and any weekly close above will take the DXY till 96/97. On the lower side, any break below 93.60 will drag the index till 93/91.90 in the short term.
EUR/USD: EUR/USD is trading in an extremely narrow range as markets await US ISM non-manufacturing PMI release. Minor recovery attempts were thwarted by downbeat Eurozone retail sales and final services PMI. The common currency failed to sustain the uptick above the 1.17 handle. Near term major intraday resistance is around 1.1750 (50% fib) and any break above will take the pair to next level till 1.1800/1.1830 .Short term bearish invalidation only above 1.2020 (200- day MA).
GBP/USD: Cable rose to 1.3392 after UK service sector PMI beat. UK services PMI for the month of May came at 54% compared to forecast of 52.9. GBPUSD has shown a jump of almost 90 pips after release and is currently trading around 1.33636. The near term resistance is around 1.3420 (20- day MA) any break above will take the pair to next level till 1.3489 (daily Kijun-Sen)/ 1.3545 (34- day EMA). Short term trend is still weak as long as resistance 1.3620 holds. The major support is around 1.3300 and any break below will drag the pair down till 1.3230/1.3200.
USD/JPY: USD/JPY upside capped at 110 handle, further upside only on break above. Focus on FOMC meeting this week where the divergence between the BoJ and Fed remains the key driver. Technically, the pair is trading with a bullish bias on the intraday charts. Bulls likely to target 200-DMA at 110.17. The major finds strong support at 21-EMA at 109.49. Retrace below could see weakness. ISM PMI numbers will be the key driver, with forecasts being Dollar positive, as the U.S economy gains momentum through the 2nd quarter.
USD/CHF: USD/CHF hits temporary top at 1.00563 and started to fall from that level. It is currently trading around 0.98612. The pair is facing support near 0.9800 and any close below will drag the pair till 0.9719 (200 –day MA) in the short term. The bearish continuation can be seen only below 0.9700. On the higher side, near term major resistance is around 0.9900 and any break above will take the pair till 0.9950/1.000/1.0060.Bullish continuation only above 1.0060.
EUR/JPY: The single currency dampened on downbeat Eurozone retail sales and final services PMI. Eurozone final services PMI for May came in at 53.8 versus 53.9 flash reading while the bloc’s retail sales numbers arrived at 0.1% m/m in May versus +0.5% expected. EUR/JPY edged lower from 128.70 levels and is currently trading at 128.17. Technical indicators are turning bullish. Stochs and RSI have rolled over from oversold levels and MACD is on verge on a bullish crossover. The major has broken above 23.6% Fib and is on track to test 38.2% Fib at 129.54.
Equities Recap
European shares slightly lower on Monday. The pan-European STOXX 600 index was up 0.46 percent at 389.89 points, while the FTSEurofirst 300 index up 0.43 percent to 1,524.14 points.
Britain's FTSE 100 trades 0.38 percent lower at 7,711.49 points, while mid-cap FTSE 250 was up 0.05 percent to 21,121.83 points.
Germany's DAX was down 1.17 percent at 12,920.62 points; France's CAC 40 was down 0.70% at 5,511.26 points.
Commodities Recap
Brent crude futures erased early gains, fell 11 cents to $75.18 a barrel by 0924 GMT. Focus on OPEC meeting on June 22 as investors weigh supply rises. U.S. West Texas Intermediate crude edged up 30 cents to $65.05.
Gold extends grind lower amid rising risk appetite and U.S. rate-hike prospects. Spot gold was flat at $1,292.23 per ounce by 0943 GMT. U.S. gold futures for August delivery were down 0.1 percent at $1,296.20 per ounce.
Silver stood at $16.39 an ounce. Platinum fell 0.6 percent at $894.90 an ounce. Palladium off six week highs, was 0.3 percent lower at $990.80 per ounce.
Treasuries Recap
U.S.: The U.S. Treasuries slumped Monday, as investors wait to watch the country’s ISM non-manufacturing PMI data for the month of May and JOLTs job openings for April, scheduled to be released on June 5 by 14:00GMT respectively. The yield on the benchmark 10-year Treasuries slumped nearly 2 basis points to 2.92 percent, the super-long 30-year bond yields fell 1 basis point to 3.07 percent and the yield on the short-term 2-year also traded nearly 1 basis point lower at 2.50 percent.
EUR: The German bunds jumped during European session Tuesday as investors crowded into safe-haven assets, despite witnessing a lower-than-expected Eurozone economic indicators, including services PMI and retail sales for the month of May and April respectively. The German 10-year bond yields, which move inversely to its price, slumped 2-1/2 basis points to 0.39 percent, the yield on 30-year note fell close to 1 basis point to 1.10 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at -0.65 percent.
NZD: New Zealand government bonds slumped at the time of closing Tuesday, tracking a similar movement in the United States Treasuries after the US jobs market report released overnight cheered market participants, leading to confidence among investors on the economy's prospects and the likelihood that the Federal Reserve will be forced to increase rates at a fast pace. Also, investors will be awaiting the country’s GlobalDairyTrade (GDT) price auction, scheduled to be released later today. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, jumped 4 basis points to 2.81 percent, the yield on the long-term 20-year note climbed 5-1/2 basis points to 3.34 percent and the yield on short-term 2-year closed 1/2 basis point higher at 1.89 percent.
JGBs: The Japanese government bonds remained flat during mid-Asian session Tuesday after the country’s household spending disappointed market sentiments. Also, investors will now remain focused on Japan’s first-quarter 2018 gross domestic product (GDP), scheduled to be released on June 7 by 23:50GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note flattened at 0.73 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.12 percent.
AUD: Australian government bonds slumped Tuesday after the Reserve Bank of Australia (RBA) remained on hold in its monetary policy meeting held early today, keeping the benchmark interest rate at 1.50 percent, citing sustainable economic growth and expectations of reaching the 3 percent GDP target, on an average this year. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, jumped 2 basis points to 2.75 percent, the yield on the long-term 30-year Note remained tad higher at 3.23 percent and the yield on short-term 2-year remained flat at 2.05 percent.
