Market Roundup
- EUR/USD 0.03%, USD/JPY 0.06%, GBP/USD 0.16%, EUR/GBP -0.15%
- DXY -0.03%, DAX 0.14%, FTSE -0.25%, Brent -1.19%, Gold -0.26%
- EU Jun Business Climate, 0.17, 0.23 f'cast, 0.30 prev
- EU Jun Economic Sentiment, 103.3, 104.6 f'cast, 105.1 prev 105.2 rvsd
- EU Jun Business Climate, 0.17, 0.23 f'cast, 0.30 prev
- EU Jun Industrial Sentiment, -5.6, -3.1 f'cast, -2.9 prev
- EU Jun Services Sentiment, 11.0, 12.4 f'cast, 12.2 prev 12.1 rvsd
- EU Jun Consumer Confidence Final, -7.2, -7.2 f'cast, -7.2 prev -6.5 rvsd
- China urges U.S. to cancel sanctions on Huawei as Trump-Xi meeting looms
- Bitcoin slides 12%, ending recent surge
- Democrats clash on healthcare, border in scrappy first U.S. presidential debate
- Second Democratic debate could come down to Biden vs. Sanders
- Iran still short of nuclear deal's enriched uranium cap -diplomats
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 6,000 to a seasonally adjusted 220,000 for the week ended Jun. 21, while continuing claims for the week ended Jun. 14 is expected to rise to 1.665 million from a previous reading of 1.662 million.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that gross domestic product increased at a 3.1 percent annual rate in its third reading of first-quarter GDP growth.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the preliminary personal consumption expenditures (PCE) price index for the first quarter. The index rose 0.4 percent in the previous quarter, while core PCE increased 1.0 percent in the same period.
- (1000 ET/1400 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 1.0 percent in May after declining 1.5 percent in April.
- (1000 ET/1500 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending June 21.
- (1100 ET/1500 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of June. The indicator stood at 2 in the previous month.
Key Events Ahead
- N/A The U.S. Federal Reserve will report results from its annual stress test of large bank operations.
- N/A Mexico's central bank will hold its monetary policy meeting.
FX Beat
DXY: The dollar index gained, supported by the probability of a less aggressive Federal Reserve and expectations of a U.S.-China trade truce. The greenback against a basket of currencies traded 0.05 percent up at 96.20, having touched a low of 95.84 on Tuesday, its lowest since Mar. 21. FxWirePro's Hourly Dollar Strength Index stood at -42.81 (Neutral) by 1000 GMT.
EUR/USD: The euro tumbled after data showed Eurozone economic sentiment declined to its lowest point in nearly three years in June as confidence fell drastically in the bloc's largest economies. The European currency traded 0.05 percent down at 1.1360, having touched a high of 1.1412 on Tuesday, its highest since Mar. 21. FxWirePro's Hourly Euro Strength Index stood at 37.16 (Neutral) by 1000 GMT. 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 surged to a 1-week high on growing hopes the United States and China will agree a trade truce before a G20 summit in Japan this weekend. The pair was trading 0.1 percent up at 107.86, having hit a low of 106.78 on Tuesday, its lowest since Jan. 3. FxWirePro's Hourly Yen Strength Index stood at -60.81 (Bearish) by 1000 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 rose above the 1.2700 handle, as traders unwound some of their short bets against the British pound ahead of a Group of 20 meeting this weekend. However, the upside appears limited as investors wait out the Conservative party leadership contest. The major traded 0.2 percent up at 1.2711, having hit a high of 1.2783 on Tuesday, it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at 6.50 (Neutral) 1000 GMT. 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 0.2 percent up at 89.44 pence, having hit a low of 89.76 on Wednesday, it’s lowest since Jan. 15.
USD/CHF: The Swiss franc trimmed losses after falling to a 6-day low as investors preferred to stay on the sidelines ahead of a highly-anticipated weekend meeting of G20 leaders in Tokyo. The major trades flat at 0.9776, having touched a low of 0.9693 on Tuesday; it’s lowest since Sept. 25. FxWirePro's Hourly Swiss Franc Strength Index stood at -62.75 (Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9855 (50.0% retracement 1.0014 and 0.9693) and any break above will take the pair to next level till 0.9893 (61.8% retracement). The near-term support is around 0.9710 (June. 24 Low), and any close below that level will drag it till 0.0.9635 (Sept. 25).
Equities Recap
European shares declined, amid fears U.S. President Donald Trump was prepared to impose tariffs on virtually all remaining Chinese imports if talks fail.
The pan-European STOXX 600 index plunged 0.3 percent at 381.03 points, while the FTSEurofirst 300 tumbled 0.3 percent to 1,501.65 points.
Britain's FTSE 100 trades 0.4 percent down at 7,387.39 points, while mid-cap FTSE 250 slumped 0.1 to 19,233.49 points.
Germany's DAX rose 0.1 percent at 12,257.40 points; France's CAC 40 trades 0.3 percent lower at 5,484.50 points.
Commodities Recap
Crude oil prices declined, weighed down by concerns over whether the G20 summit will produce a breakthrough on trade. International benchmark Brent crude was trading 0.8 percent lower at $65.71 per barrel by 1013 GMT, having hit a high of $66.83 on Wednesday, its highest since May 30. U.S. West Texas Intermediate was trading 0.8 percent down at $58.69 a barrel, after rising as high as $59.90 on Wednesday, its highest since the May 23.
Gold prices slumped as the dollar rallied to a near 1-week high, while investors waited on any U.S.-China trade developments later this week in Japan. Spot gold was trading 0.3 percent down at $1,404.31 per ounce by 1015 GMT, having touched a high of $1,439.14 on Friday, its highest since May 14, 2013. U.S. gold futures slipped 0.6 percent to $1,406.30 an ounce.
Treasuries Recap
The U.S. Treasuries edged higher during the afternoon session, ahead of the country’s gross domestic product (GDP) for the first quarter of this year, scheduled to be released today by 12:30GMT, besides, the weekly initial jobless claims and the 7-year Note auction, both due today by 12:30GMT and 17:00GMT respectively. The yield on the benchmark 10-year Treasury yield slipped nearly 1 basis point to 2.042 percent, the super-long 30-year bond yields hovered tad lower at 2.560 percent and the yield on the short-term 2-year suffered nearly 2 basis points to 1.761 percent.
The German bunds suffered during European trading session ahead of the country’s and eurozone’s consumer price inflation (CPI) data for the month of June, scheduled to be released on June 27 and 28 by 12:00GMT and 09:00GMT respectively. The German 10-year bond yields, which move inversely to its price, traded tad nearly 1 basis point higher at -0.296 percent, the yield on 30-year note surged 1-1/2 basis points to 0.284 percent and the yield on short-term 2-year remained flat at -0.717 percent.
The Japanese government bond yields close on a higher note as investors continued to stay away from safe-haven instruments in the run-up to the G-20 Summit starting Friday, where the United States and China are expected to strike a chord on the long-pending trade agreement. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, jumped 7 basis points to -0.140 percent, the yield on the long-term 30-year edged 2 basis points higher to 0.390 percent and the yield on short-term 2-year surged 5 basis points to -0.210 percent.
The Australian government bonds plunged during Asian trading session, tracking a similar movement in the United States’ Treasuries on hopes of a trade deal with China in the upcoming G-20 Summit in Osaka, Japan, scheduled to start from tomorrow, which repelled investors from buying safe-haven assets. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 7 basis points to 1.356 percent, the yield on the long-term 30-year bond also surged 7 basis points to 1.971 percent and the yield on short-term 2-year gained 6-1/2 basis points to 0.996 percent.
