Market Roundup
- EUR/USD -0.03%, USD/JPY -0.11%, GBP/USD -0.03%, EUR/GBP flat
- DXY -0.01%, DAX +0.01%, FTSE -0.38%, Brent +1.05%, Gold +0.04%
- ECB sees solid Q2 eurozone growth
- Brexit uncertainty is hurting business investment – UK’s Hammond
- UK factories have the best month for orders since 1988 – CBI
- Great Britain Jun CBI Trends- Orders, 16 vs forecast 7, previous 9
- Very good chance May to get deal on propping up government by Thursday - DUP
- France's Macron taps newcomers for reshuffle as conservatives split
- Turkey's Erdogan, Saudi leaders discuss efforts to end Qatar tension - sources
- Brent crude oil edges back above $45
- Copper holds hefty overnight gains; supply data weighs
- BoJ Iwata: No need to raise rates now, ultra-easy stance way to go
- Iwata: Need to achieve 2% inflation target, abandoning target would be wrong
- Japan MoF flow: wk-ended Jun 17 – Japan buy more foreign bonds, net yen 1.09tn
- Foreign stocks also bought, foreigners sell Japan stocks, JGBs, bills
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 3,000 to a seasonally adjusted 240,000 for the week ended Jun. 16 while continuing claims for the week ended Jun. 9 is expected to decline to 1.928 million from 1.935 million.
- (0830 ET/1230 GMT) Statistics Canada is expected to report that retail sales gained 0.2 percent in April after rising 0.7 percent in March. While excluding autos, retail sales are likely to have gained 0.7 percent, after declining 0.2 percent in the previous month.
- (0900 ET/1300 GMT) The Federal Housing Finance Agency releases its housing price index for the month of April. The index gained 0.6 percent in March.
- (0900 ET/1300 GMT) Mexico's annual inflation rate is expected to have increased 6.25 percent in the 12 months through mid-June, while core annual inflation rate is likely to have edged up to 4.76 percent in the first half of June.
- (1000 ET/1400 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of June. The index posted a final reading of -3.3 in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending June 16.
- (1100 ET/1500 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of June. The indicator stood at -1 in the previous month.
- (1400 ET/1800 GMT) Mexico's central bank meets to decide its interest rate and is expected to raise interest rates by 25 basis points to 7.00 percent.
Key Events Ahead
- N/A U.S. President Donald Trump will discuss advanced wireless technologies and drones with top executives at AT&T, Verizon Communications, T-Mobile US and other firms.
- (1000 ET/1400 GMT) Federal Reserve Board Governor Jerome Powell will testify before a Senate Banking Committee hearing, "Fostering Economic Growth: Regulator Perspective," in Washington.
- (1145 ET/1545 GMT) FedTrade operation 30-year Ginnie Mae securities (max $950 mn)
- (1400 ET/1800 GMT) Bank of England MPC Member Kristin Forbes's Speech
- (1630 ET/2030 GMT) The Federal Reserve will release the results of bank stress tests required by the Dodd-Frank financial reform law.
FX Beat
DXY: The dollar eased against the Japanese yen as increasing geopolitical uncertainties supported safe-haven assets. The greenback against a basket of currencies traded flat at 97.56, 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 -18.54 (Neutral) by 1000 GMT.
EUR/USD: The euro consolidated within a narrow range, despite economic data pointing to solid growth in the Eurozone in the second quarter. The European Central Bank in an economic bulletin stated that the financing conditions and low-interest rates will continue to promote a recovery in investment. The European currency traded flat at 1.1162, having touched a low of 1.1119 on Tuesday, its lowest since May 30. FxWirePro's Hourly Euro Strength Index stood at 6.68 (Neutral) by 1000 GMT. Intraday major resistance is around 1.11800 (89 EMA) in the 4-hour chart and any break above will take the pair till 1.12075 (100 MA)/1.1230/1.12950. On the lower side, any break below 1.1100 confirms minor weakness, a decline till 1.1050/1.1000 likely.
USD/JPY: The dollar tumbled to a 3-day low below the 111.00 handle as the prevalent cautious environment supported the Japanese Yen's safe-haven appeal. However, the major rebounded from session's low of 110.95, as a retreat in oil prices from recent lows and upbeat economic assessment by the RBNZ at its monetary policy meeting revived risk-on sentiment. The pair trades 0.1 percent down at 111.27, having hit a high of 111.78 on Tuesday, its highest since May 26. FxWirePro's Hourly Yen Strength Index stood at 0.67 (Neutral) 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 111.85 (100 -MA) will take it to next level till 112.12/113 likely.
GBP/USD: Sterling traded below the 1.2700 handle as investors cautiously awaited the UK PM May’s post-Brexit Citizens’ rights plan due to be outlined today before the EU leaders in Brussels. However, the downside was limited as markets continued to digest hawkish comments delivered by the BoE Chief Economist Andy Haldane a day before. Sterling traded flat at 1.2667, having hit a low of 1.2589 the prior day, its weakest since Apr 18. FxWirePro's Hourly Sterling Strength Index stood at -95.67 (Slightly Bearish) by 1000 GMT. On the lower side, the major support is around 1.2565 (200- day MA) and any break below will drag the pair till 1.2470 (61.8% retracement of 1.21088 and 1.30470)/1.2400 likely. The near-term minor resistance is around 1.2700 (23.6% retracement of 1.30475 and 1.25890) and any break above will take it till 1.2770 (55- day EMA)/1.2820. Against the euro, the pound traded flat at 88.00 pence, having hit a 1-week low of 88.45 the prior day.
USD/CHF: The Swiss franc edged down, halting its 2-day winning streak amid improving risk sentiment across the markets. The major trades 0.1 percent up at 0.9737, having touched a high of 0.9770 last week, its highest since May 30. FxWirePro's Hourly Swiss Franc Strength Index stood at -8.81 (Neutral) by 1000 GMT. Technically the pair has been facing strong resistance around 0.9808 (May 30 high) and any close above will take it till 0.9845/0.9900. On the lower side, major support is around 0.9615 and any break below will drag it down till 0.9580/0.9520 (161.8% retracement of 0.9614 and 0.97393).
AUD/USD: The Australian dollar declined to a 1-week low earlier in the day amid weaker tone surrounding commodity bloc. The Aussie trades 0.1 percent down at 0.7544, having hit a low of 0.7541 earlier, it’s weakest since June 14. FxWirePro's Hourly Aussie Strength Index stood at -38.57 (Neutral) by 1000 GMT. On the lower side, near term support is around 0.7530 (200- day MA) and any break below will drag the pair till 0.7485 (21 – EMA)/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 slumped, weighed down by a slide in commodities-related sectors, while the investors sought safe-haven assets as the global appetite for risk weakened.
The pan-European STOXX 600 index dropped 0.5 percent to 386.39 points, while the FTSEurofirst 300 index lost 0.6 percent to 1,518.50 points.
Britain's FTSE 100 trades 0.4 percent down at 7,415.51 points, while mid-cap FTSE 250 declined 0.2 percent to 19,639.75 points.
Germany's DAX fell 0.3 percent at 12,731.02 points; France's CAC 40 trades 0.6 percent lower at 5,238.71 points.
Commodities Recap
Crude oil prices rebounded from multi-month lows after U.S. crude and gasoline stockpiles fell, however, worries persisting over a global glut limited the upside. International benchmark Brent crude was trading 0.9 percent up at $45.19 per barrel by 0942 GMT, having hit a low of $44.34 the day before, its weakest since Nov. 14. U.S. West Texas Intermediate traded 0.6 percent up at $42.74 a barrel, after falling as low as $42.03 on Wednesday, its lowest since Nov 8.
Gold prices rallied, extending gains for the third consecutive session, as risk averse sentiment amid a softer dollar and weakness in U.S. Treasury yields boosted the demand for the safe-haven metal. Spot gold rose 0.5 percent to $1,251.89 per ounce at 0946 GMT, retreating from a low of $1,240.73 hit on Wednesday, its lowest since May 17. U.S. gold futures for August delivery rose 0.6 percent to $1,253.30 per ounce.
Treasuries Recap
The U.S. Treasuries gained on expectations of a rise in the country’s initial jobless claims, due late today, besides, the 30-year auction and FOMC member Powell’s speech. The yield on the benchmark 10-year Treasury, fell nearly 1 basis point to 2.14 percent, the super-long 30-year bond yields also slipped nearly 1 basis point to 2.72 percent and the yield on short-term 2-year note hovered around 1.34 percent.
The UK gilts rallied as investors poured into safe-haven instruments ahead of the Brexit negotiations in Brussels with an unstable political situation. The yield on the benchmark 10-year gilts, slumped 3 basis points to 1.00 percent, the super-long 30-year bond yields plunged nearly 3-1/2 basis points to 1.65 percent and the yield on the short-term 2-year traded flat at 0.21 percent.
The Eurozone periphery bonds trended higher on expectations of a rise in the country’s manufacturing PMI for the month of June, due for release on June 23. The benchmark German 10-year bond yields, fell 1-1/2 basis points to 0.24 percent, the French 10-year bond yields, also slipped nearly 1 basis point to 0.59 percent, Irish 10-year bond yield plunged nearly 7-1/2 basis points to 0.64 percent, Italian equivalent slumped 1-1/2 basis points to 1.90 percent, Netherlands 10-year bonds yield traded nearly 2 basis points lower at 0.45 percent, Portuguese equivalents remained almost flat at 2.87 percent and the Spanish 10-year yields traded 2-1/2 basis points lower at 1.36 percent.
The Japanese government bonds traded flat in a silent trading session that witnessed data of least significance. The benchmark 10-year bond yield, hovered around 0.05 percent, the long-term 30-year bond yields traded flat at 0.78 percent and the yield on the short-term 2-year note traded steady at -0.10 percent.
The New Zealand bonds ended on the upside after the Reserve Bank of New Zealand (RBNZ) 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 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.
