Market Roundup
- EUR/USD +0.24%, USD/JPY -0.15%, GBP/USD flat, EUR/GBP +0.24%
- DXY -0.12%, DAX -0.47%, FTSE -0.01%, Brent -0.17%, Gold +0.40%
- Cyber-attack sweeps globe, researchers see 'WannaCry' link
- Japan, EU press ahead on free trade pact to counter U.S. protectionism
- BoE's Cunliffe: Now is not the time to raise interest rates
- UK orders sweeping changes to boost transparency of funds industry
- UK house price growth bounces back in June - Nationwide
- Great Britain Jun Nationwide House Price, +1.1% m/m, +3.1% y/y; previous -0.2%, +2.1%
- Eurozone household lending at fresh post-crisis high: ECB
- EZ May Money-M3 Annual Growth, +5.0% vs forecast +5.0%, previous +4.9%
- EZ May Loans to Households, +2.6%, last +2.4%
- EZ May Loans to Non-Fin, +2.4% vs forecast +2/4%, last +2.4%
- Germany May Import Prices, -1.0% m/m, +4.1% y/y vs forecast -0.6%, +4.6%, last -0.15, +6.1%
- Facing revolt on healthcare bill, U.S. Senate Republicans delay vote
- Bank bailouts not the end of Italy's bad loans saga
- Oil slips further below $47 as U.S. inventory report revives glut worries
- Gold rises as U.S. healthcare vote delay weighs on stocks, dollar
- China to further relax curbs on foreign investment
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Census Bureau reports its preliminary wholesale inventories for the month of May. The indicator posting a decline of 0.5 percent in April.
- (0830 ET/1230 GMT) The United States releases goods trade balance data for the month of May. The economy recorded a trade deficit of $68.0 billion in the previous month.
- (1000 ET/1400 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 0.8 percent in May after declining 1.3 percent in April.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending June 23.
- (1950 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending June 23.
- (1950 ET/2350 GMT) Japan's Ministry of Economy, Trade, and Industry releases retail trade data for the month of May. The indicator is likely to post an annualized rise of 2.6 percent after jumping 3.2 percent in the prior month.
Key Events Ahead
- (0900 ET/1300 GMT) ECB President Mario Draghi, Bank of England Governor Mark Carney, Bank of Japan Governor Haruhiko Kuroda, Bank of Canada Governor Stephen Poloz, ECB Vice President Vitor Constancio and ECB Board Member Yves Mersch will speak at an event in Sintra, Portugal.
- (1145 ET/1545 GMT) FedTrade Operation 30-Year Fannie Mae / Freddie Mac (max $1.625 bn)
- (1405 ET/1805 GMT) Bank of Canada Deputy Governor Lynn Patterson will give a speech in Calgary, Alberta.
- (1630 ET/2030 GMT) Fed Big-Bank Test Results (Verdicts on Individual Bank Capital Plans)
FX Beat
DXY: The dollar slumped versus its major peers as U.S. Senate Republican leaders delayed a vote on a healthcare overhaul until next month, adding to investor concerns about President Trump's ability to deliver on his promises of tax reform and deregulation. The greenback against a basket of currencies traded 0.3 percent down at 96.21, having touched a low of 96.16 earlier, it’s lowest since Nov. 9. FxWirePro's Hourly Dollar Strength Index stood at -19.01 (Neutral) by 1000 GMT.
EUR/USD: The euro rallied to a 1-year high after European Central Bank President Mario Draghi hinted that the ECB could trim its stimulus this year, fuelling market expectations that the central bank could announce a reduction of stimulus as soon as September. The European currency traded 0.2 percent up at 1.1366, having touched a high of 1.1388 earlier, its highest since June 24, 2016. FxWirePro's Hourly Euro Strength Index stood at 128.21 (Highly Bullish) by 1000 GMT. On the lower side, near-term support stands at 1.1320 (23.6% retracement of 1.11191 and 1.13882) and any break below will drag the pair down till 1.1285 (Hourly Kijun-Sen)/1.1250 (23.6% retracement of 1.0840 and 1.13880). The near term resistance is around 1.1400 and any break above will take it till 1.14279 /1.1478 (88.6% retracement of 1.16163 and 1.0340)/1.3550.
USD/JPY: The dollar trimmed losses to trade near a 6-week high touched in the previous session, as ongoing strength in U.S. Treasury yields provided some support to the major. Investors’ attention now shifts towards the ECB Symposium, where BoJ Governor Kuroda is due to participate in a panel discussion. 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 -158.26 (Highly Bearish) by 1000 GMT. The pair is facing support at 108 and any break below will drag the pair down till 106.80. On the higher side, near term resistance is around 112.12 (May 24 high) will take it to next level till 113/114.35 likely.
GBP/USD: Sterling rose towards a near 3-week high above the 1.2800 handle, as investors awaited the Bank of England Governor Carney's speech at the policy panel at the ECB Forum on Central Banking. The major traded 0.1 percent up at 1.2823, having hit a high of 1.2859 the day before, its highest since June 09. FxWirePro's Hourly Sterling Strength Index stood at -9.25 (Neutral) by 1000 GMT. On the lower side, the near term support is around 1.2770 (21- EMA) and any break below will drag the pair till 1.2730 (10 day SMA)/ 1.2690 (61.8% retracement of 1.2585 and 1.2850). The near-term minor resistance is around 1.2858 (Jun 27 high) and any break above will take it till 1.2900/1.2979 (Jun 8 high). Against the euro, the pound traded 0.1 percent down at 88.57 pence, having hit a 7-month low of 88.79 earlier in the session.
USD/CHF: The Swiss franc rallied to an 8-month high as the dollar eased across the board after a vote on U.S. healthcare legislation was delayed. The major trades 0.1 percent down at 0.9599, having touched a low of 0.9584 earlier, its lowest since Nov. 9. FxWirePro's Hourly Swiss Franc Strength Index stood at 106.34 (Highly Bullish) by 1000 GMT. Break below the major support of 0.9613 will drag the pair till 0.9549 (Nov 8 low)/0.94430 (May 3 low). Bearish invalidation can be seen only above 0.9770 (Jun 15 high) and any break above will take it till 0.9850/0.9900.
AUD/USD: The Australian dollar rose, reversing most of its previous session losses as weakness in the U.S. dollar and a rise in the crude oil prices supported the upside in the major. The Aussie trades 0.1 percent up at 0.7590, having hit a high of 0.7624 the day before, it’s strongest since June 19. FxWirePro's Hourly Aussie Strength Index stood at -8.43 (Neutral) by 1000 GMT. On the lower side, near term support is around 0.7530 (200- day MA) and any break below will drag it till 0.7440 (61.8% retracement of 0.7320 and 0.7635)/0.7385 (61.8% retracement of 0.71599 and 0.77493) /0.7325/0.7300. The near term resistance is around 0.7650 and any break above targets 0.7700/0.7745.
Equities Recap
European shares tumbled to their lowest in two months, weighed down by a slump in technology stocks following a global cyber-attack, while the euro rallied to 1-year high as Draghi opened the door to tweaks in the ECB's previously aggressive stimulus policy
The pan-European STOXX 600 index declined 0.3 percent to 384.81 points, while the FTSEurofirst 300 index lost 0.3 percent to 1,514.99 points.
Britain's FTSE 100 trades 0.03 percent down at 7,434.22 points, while mid-cap FTSE 250 eased 0.1 percent to 19,506.01 points.
Germany's DAX fell 0.5 percent at 12,609.07 points; France's CAC 40 trades 0.3 percent lower at 5,243.08 points.
Commodities Recap
Crude oil prices rose, extending gains for the fifth consecutive session, despite an industry report showing a rise in U.S. fuel and crude inventories, reviving concerns over a persisting three-year supply glut. International benchmark Brent crude was trading 0.9 percent up at $46.59 per barrel by 1011 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 $44.08 a barrel, after rising as high as $44.42 on Tuesday, its strongest since Jun 20.
Gold prices rebounded from recent lows as the dollar struggled and equity markets weakened after a vote on U.S. healthcare reforms was postponed. Spot gold rose 0.5 percent to $1,251.88 per ounce by 1014 GMT, having hit a low of $1,235.26 on Monday, its lowest since May 16. U.S. gold futures for August delivery was up 0.6 percent to $1,253.90 per ounce.
Treasuries Recap
The U.S. Treasuries slumped ahead of the 7-year auction, due to be held later in the day. The yield on the benchmark 10-year Treasury, jumped nearly 5-1/2 basis points to 2.25 percent, the super-long 30-year bond yields surged nearly 6 basis points to 2.80 percent and the yield on short-term 2-year note traded 1-1/2 basis points higher at 1.38 percent.
The UK 10-year gilt yields jumped to a 1-1/2 month high as investors wait to watch the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be held later in the day. The yield on the benchmark 10-year gilts, jumped 5 -1/2 basis points to 1.15 percent, the super-long 30-year bond yields surged 4 basis points to 1.77 percent and the yield on the short-term 2-year traded nearly 2 basis points higher at 0.28 percent.
The Eurozone periphery bonds remained mixed as investors are looking forward to the release of benchmark German consumer price inflation for the month of June, due on June 29. The benchmark German 10-year bond yields, jumped 2-1/2 basis points to 0.38 percent, the French 10-year bond yields, rose 1 basis point to 0.74 percent, Irish 10-year bond yield fell 1 basis point to 0.78 percent, Italian equivalent climbed 3 basis points to 2.05 percent, Netherlands 10-year bonds yield surged 3 basis points to 0.58 percent, Portuguese equivalents slumped nearly 2 basis points to 3.01 percent and the Spanish 10-year yields traded nearly 1 basis point higher at 1.46 percent.
The Japanese government bonds slid on expectations of a slight rise in the country’s core consumer price inflation for the month of May, scheduled to be released on June 30. In addition, the Bank of Japan’s (BoJ) Governor Kuroda’s speech, at the European Central Bank’s Sintra Forum on Central Banking late today will add further clarity to the debt market. The benchmark 10-year bond yield, rose nearly 1 basis point to 0.05 percent, the long-term 30-year bond yields hovered around 0.82 percent and the yield on the short-term 2-year note also traded flat at -0.12 percent.
The New Zealand bonds closed mixed, 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 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.
