Market Roundup
- EUR/USD -0.31%, USD/JPY -0.02%, GBP/USD -0.17, EUR/GBP -0.11%
- DXY +0.12%, DAX +0.24%, FTSE +0.18%, Brent +0.67%, Gold -0.14%
- Eurozone core inflation ticks up in relief for ECB
- EZ Jun Inflation Flash y/y, +1.3% vs forecast +1.2%, previous +1.4%
- EZ Jun Inflation Flash Ex-Food & Energy, +1.2% vs forecast +1/0%, previous +1.0%
- UK consumers suffer longest decline in spending power since the 1970s
- Great Britain Q1 GDP q/q, +0.2% vs forecast +0.2%, previous +0.2%
- Great Britain Q1 GDP y/y, +2.0% vs forecast +2.0%, previous +2.0%
- Great Britain Q1 Business Invest q/q, +0.6%, previous +0.6%
- Great Britain Q1 Business Invest y/y, +0.7%, previous +0.8%
- German retail sales rise more than expected in May
- Germany May Retail Sales Real m/m, +0.5% vs forecast +0.3%, previous -0.2% revised -0.2%
- Germany May Retail Sales Real y/y, +4.8% vs forecast +2.5%, previous -0.9% revised -0.4%
- Germany Jun Unemployment Chg SA, 7k vs forecast -10k, previous -9k revised -7k
- Germany Jun Unemployment Total NSA, 2.47 mln, previous 2.49 mln
- Germany Jun Unemployment Total SA, 2.55 mln, previous 2.54 mln revised 2.54 mln
- Germany Jun Unemployment Rate SA, +5.7% vs forecast +5.7%, previous +5.7%
- Trump administration reverses policy on fiancés as travel ban takes effect
- Gold heads for first monthly loss this year
- Crude oil prices firm, set for biggest weekly gain since mid-May
- China factory growth unexpectedly quickens, but debt risks pressure economy
- China "outraged" by $1.42 bln planned U.S. arms sales to Taiwan
- LNG price row between India, US crimps Trump's export aims
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department releases personal income figures for May, which is expected to rise 0.3 percent, after rising 0.4 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of May. The index is expected to rise at an annualized rate of 1.5 percent after advancing 1.7 percent in the prior month. While core PCE is likely to have increased 0.1 percent after surging 0.2 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Personal spending is likely to rise 0.1 percent in the month of May after surging 0.4 percent in April.
- (0830 ET/1230 GMT) The Statistics Canada releases its Raw Material Price Index for the month of May. The index posted a rise of 1.6 percent in April.
- (0830 ET/1230 GMT) The Statistics Canada will report its industrial producer prices for the month of May. The indicator rose 0.6 percent in the prior month.
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that gross domestic product increased 0.2 percent in April after rising 0.5 percent in March.
- (0945 ET/1345 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions eased to 58.0 in June from 59.4 last month.
- (1000 ET/1400 GMT) The University of Michigan is likely to report that U.S. consumer sentiment index rose to 94.5 in June, unchanged from previous month's reading.
- (1030 ET/1430 GMT) The Bank of Canada releases Business Outlook Survey.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0945 ET/1345 GMT) FedTrade Operation 30-Year Fannie Mae / Freddie Mac (max $1.8 bn)
FX Beat
DXY: The dollar rebounded from recent lows against its major peers amid a continuous uptick in the U.S. Treasury bond yields. The greenback against a basket of currencies traded 0.1 percent up at 95.71, having touched a low of 95.47 earlier, it’s lowest since Oct. 3. FxWirePro's Hourly Dollar Strength Index stood at -79.84 (Slightly Bearish) by 1100 GMT.
EUR/USD: The euro declined from a 14-month peak hit earlier in the session after data showed Eurozone's inflation eased in June because of more moderate energy price rise. The economy's preliminary consumer price index rose 1.3 percent year-on-year in June, decelerating form 1.4 percent in May and 1.9 percent in April. The European currency traded 0.3 percent down at 1.1410, having touched a high of 1.1445 earlier, its highest since May 5, 2016. FxWirePro's Hourly Euro Strength Index stood at -1.22 (Neutral) by 1100 GMT. The short term trend is still bullish as long as support 1.1290 holds. On the lower side, near term support is around 1.1380 and any break below will drag the pair down till 1.1350 (89- H EMA))/1.13180 (38.2% retracement of 1.1445 and 1.11092)/1.1290.
USD/JPY: The dollar extended losses from the previous session as a fresh wave of global risk aversion drove investors towards safe-haven Japanese yen. The major traded 0.1 percent down at 111.99, having hit a high of 112.92 in the previous session, its highest since May 17. FxWirePro's Hourly Yen Strength Index stood at -68.65 (Bearish) by 1100 GMT. The pair is facing near-term support at 111.75 (100- day MA) and any break below will drag the pair down till 110.95/110. On the higher side, near term resistance is around 113 will take the pair to next level till 113.40/ 114.35.
GBP/USD: Sterling tumbled from a 5-week high, despite data showing the economy expanded 0.2 percent in the first quarter and 2 percent on an annualized basis, both in line with forecasts. Moreover, UK's current account came in at £16.89 billion in the first quarter, bettering expectations, while total business investment expanded 0.6 percent QoQ and 0.1 percent over the last twelve months in Q1. Sterling traded 0.2 percent down at 1.2979, having hit a high of 1.3029 earlier, its highest since May 23. FxWirePro's Hourly Sterling Strength Index stood at 38.10 (Neutral) by 1100 GMT. The pair should break above 1.3050 for further bullishness and any violation above will take it till 1.3110 (113% retracement of 1.30475 and 1.25894)/1.3150/1.33150 (88.6% retracement of 1.3440 and 1.19040). On the lower side, near-term minor support is around 1.2975 (4H Tenkan-Sen) and any break below will drag it down till 1.2940 (55- 4H EMA)/1.29250 (23.6% retracement of 1.25895 and 1.30298). Against the euro, the pound traded 0.1 percent up at 87.90 pence, having hit a 7-month low of 88.79 on Wednesday.
USD/CHF: The Swiss franc edged down after rising to an 8-month high earlier as the greenback rebounded across the board. The major trades 0.2 percent up at 0.9580, having touched a low of 0.9550 earlier, its lowest since Nov. 9. FxWirePro's Hourly Swiss Franc Strength Index stood at -73.14 (Slightly Bearish) by 1100 GMT. The pair near term support is around 0.95480 (Nov 9 low) and any break below will drag the pair till 0.9520 (Jun 23 low)/0.9490. Bearish invalidation can be seen only above 0.97708 (Jun 15 high) and any break above this level will take it till 0.9850/0.9900.
AUD/USD: The Australian dollar trimmed gains after rallying to a three-month peak on the back of better-than-expected Chinese manufacturing and non-manufacturing activity June data. The Aussie trades up at 0.7684, having hit a high of 0.7712 earlier, it’s strongest since Mar. 21. FxWirePro's Hourly Aussie Strength Index stood at 43.27 (Neutral) by 1100 GMT. On the lower side, near term support is around 0.7580 (10- day MA) and any break below will drag the pair till 0.7669 (10- 4 H MA)/0.7620 (23.6% retracement of 0.7320 and 0.77121)/0.7530 (200- MA). The near term resistance is around 0.7750 and any break above targets 0.7800/0.7835.
Equities Recap
European shares advanced on easing political worries and brightening economic prospects in the euro zone, while the dollar rebounded from recent lows amid a rise in the U.S. Treasury bond yields.
The pan-European STOXX 600 index climbed 0.5 percent to 382.73 points, while the FTSEurofirst 300 index rallied 0.5 percent to 1,505.80 points.
Britain's FTSE 100 trades 0.3 percent up at 7,375.66 points, while mid-cap FTSE 250 gained 0.3 percent to 19,400.09 points.
Germany's DAX rose 0.3 percent at 12,451.52 points; France's CAC 40 trades 0.7 percent higher at 5,189.96 points.
Commodities Recap
Crude oil prices gained over 1 percent to hit multi-week highs as a decline in U.S. output supported prices. International benchmark Brent crude was trading 1.01 percent up at $47.96 per barrel by 1106 GMT, having hit a high of $48.13 earlier, its strongest since Jun. 14. U.S. West Texas Intermediate traded 1.0 percent up at $45.28 a barrel, after rising as high as $45.42 the prior day, its strongest since Jun 14.
Gold prices declined, extending previous session losses and were poised for its first monthly loss this year as global central banks hinted monetary tightening in Europe. Spot gold declined 0.2 percent at $1,242.89 an ounce at 1110 GMT, having hit a low of $1,235.26 hit on Monday, its lowest since May 16 and had fallen nearly 2 percent so far in June. U.S. gold futures for August delivery were $1.70 an ounce lower at $1,244.10.
Treasuries Recap
The U.S. Treasuries remained flat in silent trading, following lack of any major significant data after a solid volatility this week. The yield on the benchmark 10-year Treasury, hovered around 2.26 percent, the super-long 30-year bond yields remained flat at 2.82 percent and the yield on short-term 2-year note traded nearly 1 basis point lower at 1.36 percent.
The UK gilts surged after reading the country’s first-quarter gross domestic product (GDP), which remained unchanged, released today. Also, the country’s manufacturing PMI for the month of June, due by early next week will add more clarity to the debt market. The yield on the benchmark 10-year gilts, slumped 2-1/2 basis points to 1.22 percent, the super-long 30-year bond yields plunged 2 basis points to 1.84 percent and the yield on the short-term 2-year also traded 2 basis points lower at 0.34 percent.
The Eurozone periphery bonds rebounded after witnessing a slightly lower consumer price inflation data for the month of June. The benchmark German 10-year bond yields, plunged nearly 2 basis points to 0.43 percent, the French 10-year bond yields slumped 2 basis points to 0.78 percent, Irish 10-year bond yields collapsed nearly 4 basis points to 0.83 percent, Italian fell nearly 2 basis points to 2.13 percent, Netherlands 10-year bond yield slipped 2-1/2 basis points to 0.62 percent, Portuguese equivalents 2 basis points to 3.00 percent and the Spanish 10-year yields traded nearly 1 basis point lower at 1.52 percent.
The Japanese 10-year government bond yields hit a 3-1/2 month high on rising risk sentiments after a flow of hawkish comments from various central bank governors at an ECB event in Portugal earlier this week. In intraday trading, the benchmark 10-year bond yield, rose 1 basis point to 0.08 percent, the long-term 30-year bond yields also climbed 1 basis point to 0.85 percent while the yield on the short-term 2-year note hovered around -0.11 percent.
The New Zealand bonds suffered a sharp plunge at the time of closing, tracking footprints left behind by the global debt market in a massive reaction to the hawkish comments made by the European Central Bank (ECB) Governor Mario Draghi earlier in the week. At the time of closing, the yield on the benchmark 10-year bond, jumped 9-1/2 basis points to 2.99 percent, the yield on 7-year note surged 9 basis points to 2.88 percent and the yield on short-term 2-year note ended 6 basis points higher at 2.09 percent.
The Australian bond yields remained one of the biggest movers in the global debt market, marking a substantial increase through the week after the world’s money market witnessed a massive sell-off, following hawkish comments from various central bank governors. The yield on the benchmark 10-year Treasury note, jumped 10 basis points to 2.60 percent, the yield on 15-year note also surged 10 basis points to 2.96 percent and the yield on short-term 2-year traded nearly 4-1/2 basis points higher at 1.75 percent.
