Market Roundup
- EUR/USD -0.02%, USD/JPY 0.43%, GBP/USD -0.01%, EUR/GBP -0.06%
- DXY 0.13%, DAX 0.54%, FTSE 0.15%, Brent 1.29%, Gold -1.16%
- U.S. Treasury Secretary says U.S.-China trade deal is 90% done - CNBC
- BoE won't put no-deal Brexit into forecasts unless UK policy changes -Carney
- Great Britain May Finance Mortgage Apps, 42.384k, 42.989k prev 42.898k rvsd
- Germany Jul GfK Consumer Sentiment, 9.8, 10.0 f'cast, 10.1 prev
- Iran's Khamenei says nation will not retreat in face of U.S. sanctions and "insults" - website
- Trump-Xi meet, Iran tension to overshadow G20 summit in Japan
- U.S. Special Counsel Mueller to testify before House panels on July 17 -statement
- Bitcoin reaches 18-month high as Facebook's Libra spurs interest
- Italy Q1 budget deficit narrows marginally y/y to 4.1% of GDP
- U.S., N.Korea in behind-the-scenes talks over third summit, Moon says
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Census Bureau is likely to report that preliminary wholesale inventories rose 0.5 percent in April after posting a gain of 0.8 percent in March.
- (0830 ET/1230 GMT) The United States releases goods trade balance data for the month of May. The economy recorded a trade deficit of $70.92 billion in the previous month.
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have increased 0.2 percent in May after declining 2.1 percent in April, while non-defence capital goods orders excluding aircraft are likely to have risen 0.1 percent after falling 1.0 percent the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending June 21.
Key Events Ahead
- (1130 ET/1530 GMT) Federal Reserve Bank of San Francisco President Mary Daly speaks to The Forecasters Club of New York on "The Dual Mandate in a Flat Phillips Curve Environment" in New York
- N/A The sixth OPEC and non-OPEC ministerial meeting will be held in Vienna.
FX Beat
DXY: The dollar index gained as investors dialled back expectations for aggressive U.S. rate cuts next month after comments by Federal Reserve officials. The greenback against a basket of currencies traded 0.1 percent up at 96.24, having touched a low of 95.84 on Tuesday, its lowest since Mar. 21. FxWirePro's Hourly Dollar Strength Index stood at -12.08 (Neutral) by 1000 GMT.
EUR/USD: The euro plunged from a 3-month high after data showed Germany's consumer morale fell heading into July as the slowdown weighing on German economy undermined income expectations among shoppers. The European currency traded 0.05 percent down at 1.1361, having touched a high of 1.1412 on Tuesday, its highest since Mar. 21. FxWirePro's Hourly Euro Strength Index stood at 64.89 (Bullish) 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 1.1335 (Mar 20 Low), a break below could drag it below 1.1301 (Jun. 11 Low).
USD/JPY: The dollar rebounded from a near 6-month low recorded in the previous session as trade tensions slightly eased after a senior United States official stated that the country hopes to re-launch trade talks with China after President Donald Trump and President Xi Jinping meet in Japan on Saturday. The pair was trading 0.5 percent up at 107.70, having hit a low of 106.78 the day before, its lowest since Jan. 3. FxWirePro's Hourly Yen Strength Index stood at -170.05 (Highly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. prelim wholesale inventories, goods trade balance, durable goods orders, and a speech by Fed's Daly. Immediate resistance is located at 107.98 (61.8% retracement of 108.72 and 106.78), a break above targets 108.30 (78.6% retracement). On the downside, support is seen at 106.26 (Mar. 29, 2018), a break below could take it lower at 106.00.
GBP/USD: Sterling fell to a 5-day low after Boris Johnson, the top contender to replace Prime Minister Theresa May reaffirmed his commitment to take Britain out of the European Union with or without any agreement by Oct. 31. However, the British pound attempted a minor recovery after Bank of England Governor Mark Carney said the BoE won't put no-deal Brexit into its economic forecasts unless UK policy changes. The major traded 0.2 percent up at 1.2704, having hit a high of 1.2783 on Tuesday, it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at -34.25 (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 0.1 percent up at 89.45 pence, having hit a low of 89.73 earlier, it’s lowest since Jun. 18.
USD/CHF: The Swiss franc eased, extending prior session losses, as the greenback rebounded after U.S. Federal Reserve officials played down expectations of aggressive rate cuts. The major trades 0.2 percent up at 0.9775, having touched a low of 0.9693 o Tuesday; it’s lowest since Sept. 25. FxWirePro's Hourly Swiss Franc Strength Index stood at -134.20 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9817 (38.2% 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 0.9635 (Sept. 25), and any close below that level will drag it till 0.9600 (Sept. 18 Low).
Equities Recap
European shares advanced, boosted by gains in the energy stocks as oil prices surged in the face of worries about U.S.-Iran relations.
The pan-European STOXX 600 index gained 0.1 percent at 383.81 points, while the FTSEurofirst 300 surged 0.2 percent to 1,512.43 points.
Britain's FTSE 100 trades 0.1 percent up at 7,432.31 points, while mid-cap FTSE 250 rallied 0.1 to 19,287.94 points.
Germany's DAX rose 0.6 percent at 12,295.98 points; France's CAC 40 trades 0.2 percent higher at 5,524.24 points.
Commodities Recap
Crude oil prices rallied to their highest level in nearly a month, boosted by an outage at a major refinery on the U.S. East Coast and industry data that showed U.S. crude stockpiles fell more than expected. International benchmark Brent crude was trading 0.1 percent higher at $65.85 per barrel by 0956 GMT, having hit a high of $66.24 earlier, its highest since May 31. U.S. West Texas Intermediate was trading 0.2 percent up at $58.85 a barrel, after rising as high as $59.11, its highest since the May 30.
Gold prices declined more than 1 percent, hovering away from a 6-year peak hit in the previous session, as U.S. Federal Reserve officials played down expectations of aggressive rate cuts. Spot gold was trading 1.1 percent down at $1,407.61 per ounce by 0958 GMT, having touched a high of $1,439.14 on Friday, its highest since May 14, 2013. U.S. gold futures fell 0.6 percent to $1,410.60 an ounce.
Treasuries Recap
The U.S. Treasuries plunged during the afternoon session, ahead of a busy day for economic data that brings the advance goods trade and inventories figures for May, as well as durable goods orders data for the same month. Also, the 5-year note auction, scheduled to be held today at 17:00GMT and FOMC member Daly’s speech, due at 15:30GMT for added direction in the debt market. The yield on the benchmark 10-year Treasury yield jumped 3-1/2 basis points to 2.026 percent, the super-long 30-year bond yields edged 1-1/2 basis points higher to 2.541 percent and the yield on the short-term 2-year surged 5-1/2 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, jumped 2 basis points to -0.312 percent, the yield on 30-year note surged nearly 3 basis points to 0.271 percent and the yield on short-term 2-year traded flat at -0.738 percent.
The Japanese government bonds closed lower as investors await the release of the country’s retail sales and industrial production data for the month of May, scheduled to be released on June 26 and 27 by 23:50GMT respectively for further direction in the debt market. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, improved 7 basis points to -0.147 percent, the yield on the long-term 30-year edged 1-1/2 basis points higher to 0.360 percent and the yield on short-term 2-year jumped 12 basis points to -0.215 percent.
The Australian government bonds fell during Asian trading session amid a muted day that witnessed data of little economic significance as investors await a trade talk meeting between President Donald Trump and Chinese leader Xi Jinping at the G-20 meeting in Osaka, Japan on June 28-29. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, surged nearly 2 basis points to 1.293 percent, the yield on the long-term 30-year bond also jumped nearly 2 basis points to 1.905 percent and the yield on short-term 2-year gained nearly 3-1/2 basis points to 0.938 percent.
