Market Roundup
- EUR/USD 0.16%, USD/JPY 0.14%, GBP/USD -0.25%, EUR/GBP 0.42%
- DXY -0.02%, DAX 0.19%, FTSE 0.45%, Brent 0.11%, Gold -0.07%
- EU Employment YY, 1.4%, 1.6% previous
- EU Industrial Production YY, 1.7%, 2.8% forecast, 3% previous
- Great Britain Core CPI YY, 2.4%, 2.5% forecast, 2.4% previous
- Great Britain PPI Input Prices YY NSA, 9.2%, 7.6% forecast, 5.3% previous
- Great Britain RPI MM, 0.4%, 0.4% forecast, 0.5% previous
- Great Britain RPI YY, 3.3%, 3.4% forecast, 3.4% previous
- Great Britain RPI Index, 280.7, 279.7 previous
- North Korea highlights Trump concessions on war games after summit
- Italy, trade worries bite into German growth forecast
- After compromise, Britain's May set to avoid defeat in parliament on customs
- Oil demand seen steady in 2019 but OPEC supply, trade risks loom-IEA
- Gold eases ahead of expected U.S. rate rise
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. producer price index is likely to have increased 0.3 percent in May, while in the 12 months through the same period, it is expected to have advanced 2.8 percent. PPI excluding food and energy probably edged up 0.2 percent after posting similar gains in April.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending June 8.
- (1400 ET/1800 GMT) The U.S. Federal Reserve concludes its two-day policy meeting and issues a statement on interest rates.
- (1430 ET/1830 GMT) The FOMC releases its statement regarding monetary policy and economic projections.
- (1800 ET/2200 GMT) Chile's central bank will meet to set its benchmark interest rate, where is widely expected to keep it unchanged at 2.5 percent.
Key Events Ahead
- (1315 ET/1715 GMT) Bank of England's Anil Kashyap speaks at OMFIF City lecture - London
- (1430 ET/1830 GMT) Federal Reserve Chair Chair Jerome Powell will address news conference
- N/A European Banking Association Day on banking tech topics – Munich
FX Beat
DXY: The dollar index steadied as investors wait to scrutinize the Fed monetary policy statement on whether the Fed signals tightening policy four times in 2018, from the three times indicated earlier this year. The greenback against a basket of currencies trades 0.05 percent up at 93.86, having touched a high of 93.98 earlier, its highest since June 5. FxWirePro's Hourly Dollar Strength Index stood at 59.77 (Bullish) by 1000 GMT.
EUR/USD: The euro rose, reversing some of its previous session losses, amid speculation that the ECB could signal its intention to unwind its massive bond-purchasing program in 2018. The European currency traded 0.2 percent up at 1.1764, having touched a high of 1.1839 on Thursday, its highest since May 16. FxWirePro's Hourly Euro Strength Index stood at 60.01 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1839 (Jun. 7 High), a break above targets 1.1896 (May 5 High). On the downside, support is seen at 1.1690 (May 24 Low), a break below could drag it till 1.1652 (June 5 Low).
USD/JPY: The dollar surged to a 1-week peak as investors awaited the Federal Reserve monetary policy statement that could provide clues on how many more U.S. rate hikes there will be this year. The FOMC concludes its two-day policy meeting later in the day, where it is widely expected to hike rates for the second time this year. The major was trading 0.2 percent up at 110.54, having hit a high of 110.71 earlier, its highest since May 23. FxWirePro's Hourly Yen Strength Index stood at -115.24 (Highly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. producer price index, FOMC policy meeting outcome and Federal Reserve Chairman Jerome Powell's press conference. Immediate resistance is located at 110.85 (May 17 Low), a break above targets 111.18 (May 22 High). On the downside, support is seen at 109.95 (5-DMA), a break below could take it lower 109.65 (10-DMA).
GBP/USD: Sterling slumped to a 1-week low as British consumer price inflation unexpectedly held at a one-year low in May, slashing expectations that the Bank of England would hike interest rate in near term. The economy's consumer price inflation held at an annual rate of 2.4 percent in May, its joint-lowest since March 2017, and below forecasts for a rise to 2.5 percent. Sterling traded 0.3 percent down at 1.3330, having hit a low of 1.3308 earlier, it’s lowest since June 8. FxWirePro's Hourly Sterling Strength Index stood at -56.55 (Bearish) by 1000 GMT. Immediate resistance is located at 1.3439 (June 8 High), a break above could take it near 1.3483 (May 21 High). On the downside, support is seen at 1.3302 (June 6 Low), a break below targets 1.3253 (June 1 Low). Against the euro, the pound was trading 0.5 percent down at 88.21 pence, having hit a low of 88.37 pence on Thursday, it’s lowest since May 7.
USD/CHF: The Swiss franc tumbled to a near 2-week low as the greenback gained ahead of the Federal Reserve policy announcement and Fed Chair Jerome Powell news conference. The major trades 0.1 percent up at 0.9878, having touched a high of 0.9895, it’s highest since Jun. 1. FxWirePro's Hourly Swiss Franc Strength Index stood at -59.00 (Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9900 and any break above will take the pair to next level till 0.9935 (May 30 High). The near-term support is around 0.9846 (5-DMA) and any close below that level will drag it till 0.9782 (Apr. 25 Low).
Equities Recap
European shares advanced, while the dollar rallied against the Japanese yen as investors awaited further guidance from the Federal Reserve on future U.S. rate rises.
The pan-European STOXX 600 index surged 0.3 percent at 388.73 points, while the FTSEurofirst 300 index rallied 0.2 percent to 1,518.98 points.
Britain's FTSE 100 trades 0.4 percent up at 7,733.35 points, while mid-cap FTSE 250 gained 0.2 percent to 21,293.52 points.
Germany's DAX rose 0.2 percent at 12,866.40 points; France's CAC 40 trades 0.3 percent higher at 5,469.32 points.
Commodities Recap
Crude oil prices rose, despite rising supplies in the United States and expectations that producer group OPEC could relax voluntary output cuts. International benchmark Brent crude was trading 0.6 percent up at $75.89 per barrel by 1023 GMT, having hit a high of $77.58 on Friday, its highest since June 1. U.S. West Texas Intermediate was trading 0.3 percent up at $66.22 a barrel, after rising as high as $66.32 on Monday, its highest since June 1.
Gold prices declined to a near a 1-week low as investors waited for the U.S. Federal Reserve policy meeting outcome for clues on the pace of future interest rate hikes this year. Spot gold was trading 0.1 percent down at $1,294.81 per ounce at 1027 GMT, having hit a low of $1,291.94 earlier, its lowest since June 8. U.S. gold futures for August delivery were 0.1 percent lower at $1,298.50 per ounce.
Treasuries Recap
The U.S. Treasuries traded flat, as investors wait to watch the country’s producer price inflation (PPI) data for the month of May, scheduled to be released today by 12:30GMT and the Federal Open Market Committee’s (FOMC) policy statement, also due later today will provide added direction in the debt market. The yield on the benchmark 10-year Treasuries hovered around 2.95 percent, the super-long 30-year bond yields steadied at 3.09 percent and the yield on the short-term 2-year too remained flat at 2.54 percent.
The United Kingdom’s gilts rose after the country’s consumer price inflation (CPI) data for the month of May remained unchanged and investors will now focus on the retail sales data for the similar period, scheduled to be released on June 14 by 08:30GMT for further direction in the debt market. The yield on the benchmark 10-year gilts, slipped 1 basis point to 1.38 percent, the super-long 30-year bond yields slumped nearly 2-1/2 basis points to 1.82 percent and the yield on the short-term 3-year traded tad lower at 0.79 percent.
The German bunds gained during European session as investors wait to watch the European Central Bank’s (ECB) monetary policy decision, scheduled to be unveiled on June 14 and eurozone’s consumer price inflation for the month of May, due on June 15 will provide further direction to the debt market. The German 10-year bond yields, which move inversely to its price, slumped 1-1/2 basis points to 0.47 percent, the yield on 30-year note plunged nearly 2 basis points to 1.16 percent and the yield on short-term 2-year too traded tad lower at -0.61 percent
The New Zealand bonds closed mixed as investors remained side-lined in a muted trading week that is scheduled to witness no data of major economic significance. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slid 1/2 basis point to 3.01 percent, the yield on the long-term rose 1/2 basis point to 3.33 percent and the yield on short-term 2-year too closed 1/2 basis point lower at 1.91 percent.
The Japanese government bonds remained flat during late Asian session as investors remained side-lined in choppy trade amid lack of significant economic data. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note flat at 0.73 percent and the yield on short-term 2-year remained steady at -0.13 percent.
The Australian government bonds gained ahead of the FOMC monetary policy decision, where the U.S. central bank is widely expected to hike its fed funds rate. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 2-1/2 basis points to 2.787 percent, the yield on the long-term 30-year Note dipped 5 basis points to 3.284 percent and the yield on short-term 2-year down 1 basis point to 2.073 percent.
