Market Roundup
- EUR/USD -0.21%, USD/JPY 0.36%, GBP/USD -0.37%, EUR/GBP 0.11%
- DXY 0.30%, DAX flat, FTSE 0.49%, Brent 0.02%, Gold -0.89%
- Trump defends Mexico migration deal and pledges more detail
- Great Britain Apr GDP Estimate MM, -0.4%, -0.1% f'cast, -0.1% prev
- Great Britain Apr GDP Estimate YY, 1.3%, 1.7% f'cast, 1.9% prev
- Great Britain Apr Industrial Output MM, -2.7%, -0.7% f'cast, 0.7% prev
- Great Britain Apr Industrial Output YY, -1.0%, 1.0% f'cast, 1.3% prev
- Great Britain Apr Manufacturing Output MM, -3.9%, -1.0% f'cast, 0.9% prev
- Great Britain Apr Manufacturing Output YY, -0.8%, 2.2% f'cast, 2.6% prev
- Great Britain Apr Goods Trade Balance (GBP), -12.11 bln, -13.00 bln f'cast, -13.65 bln prev
- ECB policymakers open to cut rates if growth weakens: sources
- China stays silent on G20 Xi-Trump meeting, but says door open for talks
Economic Data Ahead
- (0815 ET/1215 GMT) Canadian Mortgage and Housing Corp will report housing starts for the month of May. The indicator rose at a seasonally adjusted annualized rate of 235,500 in the previous month.
- (0830 ET/1230 GMT) Statistics Canada is likely to report that building permits increased 0.5 percent in April after rising 2.1 percent in March.
- (1000 ET/1400 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of April. The report is expected to show job openings rose to 7.240 million after rising to 7.488 million in March.
Key Events Ahead
- (0815 ET/1215 GMT) Remarks by ECB's Luis de Guindos at IE Business Leadership Forum in Madrid
- (1300 ET/1700 GMT) Member of the Monetary Policy Committee Michael Saunders speaks during regional visit at Southampton Solent University in London
FX Beat
DXY: The dollar index rebounded from multi-week lows, as the 10- year U.S. Treasuries yields bounced back from a 21-month trough hit last week on soft U.S. jobs data. The greenback against a basket of currencies traded 0.3 percent up at 96.86, having touched a low of 96.46 on Friday, its lowest since Mar. 26. FxWirePro's Hourly Dollar Strength Index stood at -14.96 (Neutral) by 1000 GMT.
EUR/USD: The euro plunged below the 1.1300 handle on news that European Central Bank policymakers are open to cutting the central bank's policy rate again if economic growth weakened and a strong euro hurt the bloc. The European currency traded 0.2 percent down at 1.1298, having touched a high of 1.1347 on Friday, its highest since Mar. 22. FxWirePro's Hourly Euro Strength Index stood at 140.13 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.1359 (Mar. 18 High), a break above targets 1.1402 (Feb. 16 High). On the downside, support is seen at 1.1263 (Mar. 26 Low), a break below could drag it below 1.1201 (May 14 Low).
USD/JPY: The dollar surged to an over 1-week peak after the United States and Mexico struck a deal on migration to avert a trade tariff war. However, no clear sign of de-escalation in the U.S.-China trade conflict limited upside. The major was trading 0.4 percent up at 108.61, having hit a high of 108.71, its highest since May 31. FxWirePro's Hourly Yen Strength Index stood at -82.74 (Slightly Bearish) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S.JOLTS Job Opening. Immediate resistance is located at 108.87 (50.0% retracement of 109.92 and 107.81), a break above targets 109.47 (78.6% retracement). On the downside, support is seen at 107.88 (June 3 Low), a break below could take it lower at 107.51 (Jan. 4 Low).
GBP/USD: Sterling slumped from a 2-1/2 week peak hit in the previous session after data showed the British economy slowed sharply in April, while investors await the outcome of the Conservative party leadership contest to succeed May. The major traded 0.5 percent down at 1.2667, having hit a high of 1.2763 on Friday; it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at -37.17 (Neutral) 1100 GMT. Immediate resistance is located at 1.2763 (June 7 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2647 (May 24 Low), a break below targets 1.2580 (May 30 Low). Against the euro, the pound was trading 0.4 percent down at 89.24 pence, having hit a low of 89.27 earlier, it’s lowest since Jan. 15.
USD/CHF: The Swiss franc eased as risk sentiment improved across the board after the United States shelved plans to impose tariffs on Mexico. The major trades 0.3 percent up at 0.9904, having touched a low of 0.9853 on Wednesday; it’s lowest since Jan. 15. FxWirePro's Hourly Swiss Franc Strength Index stood at 33.93 (Neutral) by 1100 GMT. On the higher side, near-term resistance is around 0.9987 (April 3 High) and any break above will take the pair to next level till 1.0121 (May 17 High). The near-term support is around 0.9859 (June 7 Low), and any close below that level will drag it till 0.9820 (Dec. 20 Low).
Equities Recap
European shares surged as risk sentiment improved following the release of strong Chinese export data and the U.S.-Mexico deal to avoid new import tariffs.
The pan-European STOXX 600 index rallied 0.1 percent at 378.01 points, while the FTSEurofirst 300 gained 0.2 percent to 1,488.67 points.
Britain's FTSE 100 trades 0.5 percent up at 7,366.08 points, while mid-cap FTSE 250 surged 0.3 to 19,280.66 points; France's CAC 40 trades 0.2 percent higher at 5,375.64 points
Commodities Recap
Crude oil prices eased as U.S.-China trade tensions continued to threaten demand for oil, but tight crude supply and the swift end to a trade dispute between Mexico and the United States limited the downside. International benchmark Brent crude was trading 0.2 percent lower at $63.22 per barrel by 1046 GMT, having hit a low of $59.42 on Wednesday, its lowest since Jan. 28. U.S. West Texas Intermediate was trading flat at $54.09 a barrel, after falling as low as $50.59 on Wednesday, its lowest since the Feb. 12.
Gold prices slumped more than 1 percent, retreating from a 14-month peak hit in the previous session as an agreement between the United States and Mexico to avert a tariff war dented safe-haven demand. Spot gold was down 1.01 percent at $1,326.92 per ounce by 1051 GMT. In the previous session, having touched a high of $1,348.13 on Friday, its highest since April 19. U.S. gold futures also fell 1 percent, to $1,332.10 an ounce.
Treasuries Recap
The U.S. Treasuries plunged during the afternoon session, ahead of the country’s JOLTS job openings data for the month of April, scheduled to be released today by 14:00GMT, amid an otherwise silent trading day that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury yield jumped over 5-1/2 basis points to 2.140 percent, the super-long 30-year bond yields surged 5 basis points to 2.622 percent and the yield on the short-term 2-year traded 4-1/2 basis points higher at 1.896 percent.
The United Kingdom’s gilts suffered during European session despite investors facing a disappointment in the country’s monthly gross domestic product (GDP) and manufacturing production for the month of April, released early today. The yield on the benchmark 10-year gilts, jumped nearly 2-1/2 basis points to 0.837 percent, the super-long 30-year bond yields rose nearly 2 basis points to 1.417 percent and the yield on the short-term 2-year also traded 2 basis points higher at 0.553 percent.
The Japanese government bonds closed higher on the first trading day of the week after investors have largely shrugged-off the better-than-expected rise in the country’s gross domestic product (GDP) for the first quarter of this year, released late yesterday, while markets still eye the super-long 30-year auction, scheduled to be held on June 13 by 03:35GMT for further direction in the debt market. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1 basis point to -0.122 percent, the yield on the long-term 30-year slumped nearly 2-1/2 basis points to 0.373 percent and the yield on short-term 2-year plunged 19-1/2 basis points to -0.194 percent.
