Market Roundup
- EUR/USD 0.19%, USD/JPY 0.04%, GBP/USD 0.05%, EUR/GBP 0.11%
- DXY -0.19%, DAX -0.47%, FTSE -0.06%, Brent 0.12%, Gold 0.54%
- Germany Jun Ifo Business Climate New, 97.4, 97.2 f'cast, 97.9 prev
- Germany Jun Ifo Current Conditions New, 100.8, 100.2 f'cast, 100.6 prev 100.7 rvsd
- Germany Jun Ifo Expectations New, 94.2, 94.5 f'cast, 95.3 prev 95.2 rvsd
- Bitcoin tests 15-month highs after 10% weekend jump
- Iran says U.S. cyber attacks fail, hints at possible talks
- China says both U.S., China should make compromises in trade talks
- Trump to visit S.Korea as Pompeo raises hope for new N.Korea talks after letter
- Biden details immigration vision ahead of first Democratic 2020 debate
- Turkish assets rally after opposition wins Istanbul election
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of May. The index stood at -0.45 in the prior month.
- (1030 ET/1430 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of June. The index posted a rise of -5.3 percent in the previous month.
Key Events Ahead
- (1950 ET/2350 GMT) Bank of Japan to release Minutes of Monetary Policy Meeting held on April 24 and 25 in Tokyo
FX Beat
DXY: The dollar index plunged to a 5-week trough as the U.S. Treasury yields continued to decline following last week's signals by the Federal Reserve that it may cut interest rates soon to bolster the U.S. economy. The greenback against a basket of currencies traded 0.05 percent down at 96.04, having touched a low of 96.03 earlier, its lowest since Mar. 21. FxWirePro's Hourly Dollar Strength Index stood at -154.80 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro surged to a fresh 3-month peak after Bank of Italy Governor Ignazio Visco stated that the country needs to respect its fiscal targets if it wants to retain the confidence of investors over its capacity to repay its debt. The European currency traded 0.2 percent up at 1.1390, having touched a high of 1.1395 earlier, its highest since Mar. 21. FxWirePro's Hourly Euro Strength Index stood at 92.01 (Slightly Bullish) by 1000 GMT. Immediate resistance is located at 1.1419 (Feb. 28 High), a break above targets 1.1474 (Dec. 21 High). On the downside, support is seen at 1.1345 (Feb 26 Low), a break below could drag it below 1.1301 (Jun. 11 Low).
USD/JPY: The dollar consolidated within narrow ranges, just above a 5-1/2 month low hit in the previous session, as traders remained cautious about the prospects of trade talks between the United States and China at this week's G20 summit. The pair was trading 0.05 percent up at 107.35, having hit a low of 107.04 on Friday, its lowest since Jan. 3. FxWirePro's Hourly Yen Strength Index stood at -94.61 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the Chicago Fed national activity index and Dallas Feb manufacturing business index. Immediate resistance is located at 107.93 (5-DMA), a break above targets 108.52 (21-DMA). On the downside, support is seen at 106.88 (Apr. 17, 2018), a break below could take it lower at 106.26 (Mar. 29, 2018).
GBP/USD: Sterling rallied to a 5-week peak, supported by last week’s less dovish Bank of England meeting. However, the upside is limited as traders remained reluctant to take big positions until the conclusion of the Conservative Party leadership contest. The major traded 0.1 percent up at 1.2755, having hit a high of 1.2766 earlier, it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at 129.66 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.2798 (May 17 High), a break above could take it near 1.2853 (May 16 High). On the downside, support is seen at 1.2681 (Jun. 12 Low), a break below targets 1.2628 (Jun. 20 Low). Against the euro, the pound was trading 0.2 percent down at 89.37 pence, having hit a high of 88.72 on Thursday, it’s highest since Jun. 7.
USD/CHF: The Swiss franc advanced to a 5-1/2 month peak amid rising tensions between Iran and the United States, after Iran shot down an American drone. The major trades 0.1 percent down at 0.9751, having touched a low of 0.9749 on Thursday; it’s lowest since Jan. 10. FxWirePro's Hourly Swiss Franc Strength Index stood at 115.88 (Highly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9851 (38.2% retracement 1.0014 and 0.9749) and any break above will take the pair to next level till 0.9920 (June 10 High). The near-term support is around 0.9737 (Sept. 28 2018 Low), and any close below that level will drag it till 0.9700.
Equities Recap
European shares plunged, weighed down by losses in the auto sector, while investors await the G20 summit this week that brings the U.S. and Chinese leaders together after a long pause in talks.
The pan-European STOXX 600 index slumped 0.2 percent at 384.05 points, while the FTSEurofirst 300 tumbled 0.2 percent to 1,512.87 points.
Britain's FTSE 100 trades 0.05 percent up at 7,410.32 points, while mid-cap FTSE 250 eased 0.05 to 19,317.26 points.
Germany's DAX eased 0.6 percent at 12,270.93 points; France's CAC 40 trades 0.2 percent lower at 5,517.34 points.
Commodities Recap
Crude oil prices surged to an over 3-week peak, boosted by tensions between Iran and the United States, as Washington was set to impose new sanctions on Tehran. International benchmark Brent crude was trading 0.1 percent higher at $65.35 per barrel by 0956 GMT, having hit a high of $65.77 earlier, its highest since May 31. U.S. West Texas Intermediate was trading 0.4 percent up at $57.84 a barrel, after rising as high as $58.20, its highest since the May 30.
Gold prices advanced, hovering near a 6-year high touched in the previous session, as dovish signals from major central banks and heightened tensions between the United States and Iran boosted the safe-havens demand. Spot gold was trading 0.5 percent up at $1,406.19 per ounce as of 1013 GMT, having touched a high of $1,411.75 on Friday, its highest since Sept. 4 2013; and was heading for a fifth straight session of gains. U.S. gold futures rose 0.5 percent to $1,407.10 an ounce.
Treasuries Recap
The U.S. Treasuries jumped during the afternoon session, which started on a mild note in terms of economic data releases ahead of a host of speeches by FOMC members on Tuesday and also a handful of data to watch out for. The yield on the benchmark 10-year Treasury yield slumped 3-1/2 basis points to 2.032 percent, the super-long 30-year bond yields plunged nearly 4-1/2 basis points to 2.548 percent while the yield on the short-term 2-year traded 3 basis points lower at 1.749 percent.
The United Kingdom’s gilts gained during European session ahead of the super-long 30-year auction, scheduled to be held on June 25 by 09:45GMT and Governor of Bank of England (BoE), Mark Carney, on June 26 by 09:15GMT. The yield on the benchmark 10-year gilts, plunged 4 basis points to 0.804 percent, the 30-year yield slumped nearly 3-1/2 basis points to 1.414 percent, and the yield on the short-term 2-year traded 3 basis points lower at 0.578 percent.
The Australian government bonds fell during Asian trading session amid a muted day that witnessed data of little economic significance ahead of a keynote speech by Reserve Bank of Australia’s (RBA) Assistant Governor Michele Bullock’s speech, scheduled to be delivered on June 25 by 07:05GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, edged tad higher to 1.289 percent, the yield on the long-term 30-year bond barely rose 1 basis point to 1.909 percent and the yield on short-term 2-year remained steady at 0.90 percent.
