Market Roundup
- EUR/USD -0.03%, USD/JPY -0.2%, GBP/USD -0.07%, EUR/GBP 0.01%
- DXY 0.03%, DAX 0.26%, FTSE 0.23%, Brent 0.68%, Gold -0.05%
- Hot weather helps UK retail sales grow at fastest pace in 9 months - CBI
- Britain committed to free trade, Hammond tells China
- Euro's past rise could weigh on inflation for several more quarters: ECB
- EZ May Money-M3 Annual Growth, 4.0%, 3.8% forecast, 3.9% previous
- EZ May Loans to households, 2.9%, 2.9% previous
- EZ May Loans to non-fin, 3.6%, 3.3% previous
- Great Britain Jun Nationwide house price mm, 0.5%, 0.3% forecast, -0.2% previous
- Great Britain Jun Nationwide house price yy, 2.0%, 1.7% forecast, -2.4% previous
- Great Britain Jun CBI Distributive Trades, 32, 11 f'cast, 11 previous
- France Jun Consumer Confidence, 97, 100 forecast, 100 previous
- Euro zone corporate lending growth hits post crisis high
- Italy business and consumer morale rise in June after new government formed
- China should take "self-defence measures" in trade war -Global Times
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Census Bureau is likely to report that preliminary wholesale inventories rose 0.2 percent in May after posting a gain of 0.1 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 $67.34 billion in the previous month.
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have decreased 1.0 percent in May after declining 1.6 percent in April, while durable goods orders excluding transportation are likely to have risen 0.5 percent after gaining 0.9 percent the prior month.
- (1000 ET/1400 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 0.5 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 22.
Key Events Ahead
- (1100 ET/1500 GMT) Federal Reserve Vice Chairman for Supervision Randal Quarles speaks on "International Regulatory Participation and Cooperation" before the Utah Bankers Association 110th Annual Convention, in Sun Valley, Idaho.
- (1230 ET/1630 GMT) Federal Reserve Bank of Boston President Eric Rosengren talks on economics in Washington.
- (1515 ET/1915 GMT) Bank of Canada Governor Stephen Poloz will give a speech and press conference at Greater Victoria Chamber of Commerce.
FX Beat
DXY: The dollar index rose to a 3-day peak as investors awaited a host of speeches by the Federal Open Market Committee (FOMC) members Quarles and Rosengren. The greenback against a basket of currencies trades 0.2 percent up at 94.86, having touched a low of 94.17 the prior session, its lowest since June 14. FxWirePro's Hourly Dollar Strength Index stood at 65.75 (Bullish) by 1000 GMT.
EUR/USD: The euro declined, extending previous session losses after a research article of the European Central Bank showed the past appreciation of the euro may still weigh on inflation for several more quarters. Moreover, developing political crisis in Germany and European Union summit continued to weigh on the major. The European currency traded 0.05 percent down at 1.1641, having touched a high of 1.1719 the day before, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 14.17 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1732 (June 5 Low), a break above targets 1.1750 (May 24 Low). On the downside, support is seen at 1.1598 (June 22 Low), a break below could drag it till 1.1530 (June 19 Low).
USD/JPY: The dollar slumped, reversing some of its previous session gains, amid increasing worries that a full-blown trade war could break out between Beijing and Washington. The major was trading 0.2 percent down at 109.84, having hit a low of 109.36 the day before, its lowest since June 11. FxWirePro's Hourly Yen Strength Index stood at -24.67 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. good trade balance, durable goods orders, wholesale inventories, pending home sales and Fed Quarles and Rosengren's speech. Immediate resistance is located at 110.90 (June 15 High), a break above targets 111.08 (June 18 High). On the downside, support is seen at 109.55 (June 19 Low), a break below could take it lower 109.19 (June 8 Low).
GBP/USD: Sterling tumbled to a 6-day low after Bank of England Governor Mark Carney stated that Britain's banks could deal with a hard Brexit next March if necessary, rejecting European Union warnings that lenders are inadequately prepared. The major traded 0.1 percent down at 1.3202, having hit a high of 1.3314 on Friday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at -23.62 (Neutral) 1000 GMT. Immediate resistance is located at 1.3302 (21-DMA), a break above could take it near 1.3348 (May 31 Low). On the downside, support is seen at 1.3150 (June 19 Low), a break below targets 1.3102 (June 21 Low). Against the euro, the pound was trading 0.05 percent down at 88.08pence, having hit a low of 88.22 pence the day before, it’s lowest since June 13.
USD/CHF: The Swiss franc plunged to a 6-day low as the greenback steadied against a basket of currencies ahead of a host of speeches by the Federal Open Market Committee members Quarles and Rosengren. The major trades 0.3 percent up at 0.9927, having touched a high of 0.9929, it’s highest since June 21. FxWirePro's Hourly Swiss Franc Strength Index stood at -44.46 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9940 and any break above will take the pair to next level till 0.9980. The near-term support is around 0.9840 (June 13 Low) and any close below that level will drag it till 0.9825 (June 14 Low).
Equities Recap
European shares slumped amid fears over higher global barriers, while sterling eased following the Bank of England governor Mark Carney's comments.
The pan-European STOXX 600 index plunged 0.4 percent at 375.89 points, while the FTSEurofirst 300 index eased 0.1 percent to 1,473.56 points.
Britain's FTSE 100 trades 0.1 percent down at 7,545.40 points, while mid-cap FTSE 250 fell 0.2 percent to 20,716.20 points.
Germany's DAX declined 0.2 percent at 12,214.32 points; France's CAC 40 trades 0.2 percent lower at 5,269.11 points.
Commodities Recap
Crude oil prices eased after rising to a 2-week peak earlier in the day on the back of supply disruption in Canada, uncertainty over Libyan exports, falling U.S. crude stocks and after U.S. officials told importers to stop buying Iranian crude from November. International benchmark Brent crude was trading 0.1 percent down at $76.44 per barrel by 0953 GMT, having hit a high of $76.91 earlier, its highest since June 12. U.S. West Texas Intermediate was trading 0.6 percent up at $71.08 a barrel, after rising as high as $71.14 earlier, its highest since May 24.
Gold prices touched a fresh 6-1/2 month low as the U.S. dollar steadied amid expectations of more interest rate hikes by the U.S. Federal Reserve. Spot gold tumbled for a third straight day and was 0.1 percent down at $1,257.75 an ounce by 0958 GMT, after hitting its lowest since mid-December at $1,253.28 earlier in the session. U.S. gold futures for August delivery were 0.2 percent lower at $1,257.30 per ounce.
Treasuries Recap
The U.S. 10-year Treasuries jumped, tracking fears of an ongoing trade war, spiked by the imposition of trade tariffs by President Donald Trump over China, EU and other trading partners as well. The yield on the benchmark 10-year Treasuries slumped nearly 3 basis points to 2.85 percent, the super-long 30-year bond yields suffered nearly 2-1/2 basis points to 3.00 percent and the yield on the short-term 2-year also traded nearly 3 basis points lower at 2.52 percent.
The UK’s benchmark 10-year gilt yield touched nearly 1-month low during the mid-European session after the Bank of England (BoE) acknowledged that Brexit poses the major tailwind for the country’s economic growth, in its Financial Stability Report (FSR) released now. The yield on the benchmark 10-year gilts slumped nearly 5 basis points to 1.25 percent, the super-long 40-year bond yields also plunged 5 basis points to 1.72 percent and the yield on the short-term 2-year traded 2 basis points lower at 0.72 percent.
The New Zealand bonds gained at the time of closing as investors have largely shrug-off the better-than-expected trade surplus for the month of May and investors will now wait to watch the Reserve Bank of
New Zealand’s (RBNZ) monetary policy meeting, scheduled for today by 22:45GMT and 21:00GMT respectively. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped 2 basis points to 2.95 percent, the yield on the long-term 20-year note slumped 2-1/2 basis points to 3.27 percent while the yield on short-term 2-year closed flat at 1.92 percent.
The Japanese 10-year government bonds remained flat as investors trade sideways in a muted week that witnessed data of little economic significance. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, remained flat at 0.03 percent, the yield on the long-term 30-year also remained steady at 0.71 percent and the yield on short-term 2-year traded tad higher at -0.12 percent.
The Australian bonds gained on the back of safe-haven demand amid rising tensions of a trade war between the White House and other major economies, leaving the market in a holding pattern for now. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 1 basis point to 2.643 percent, the yield on the long-term 30-year Note dipped 2 basis points to 3.125 percent and the yield on short-term 2-year down 1/2 basis point to 2.030 percent.
