Market Roundup
- EUR/USD +0.25%, USD/JPY +0.17%, GBP/USD +0.28, EUR/GBP -0.03%
- DXY -0.15%, DAX -0.33%, FTSE +0.27%, Brent 0.44%, Gold -0.20%
- German consumer morale at highest level since Oct. 2001 heading into July
- Germany Jul GfK Consumer Sentiment, +10.6 vs forecast +10.4, last +10.4
- Euro zone economic sentiment jumps in June to almost 10-yr high
- EZ Jun Business Climate, +1.15 vs forecast +0.94, last +0.90
- EZ Jun Industrial Sentiment, +111.1 vs forecast +109.5, last +109.2
- EZ Jun Services Sentiment, +13.4 vs forecast +12.9, last +13.0
- British PM May faces vote test in parliament over government plan
- UK mortgage approvals and consumer lending accelerate unexpectedly in May
- Great Britain May Mortgage Lending, 3.5 bln vs forecast 2.60 bln, last 2.7 bln revised 2.8 bln
- Great Britain May Mortgage Approvals, 65.2k vs forecast 64.0k, last 64.6k revised 65.0k
- UK regulator reviews business models at retail banks
- Greece says can return to bond markets even without ECB
- Oil prices rise to two-week high on dip in U.S. output
- China factory activity seen cooling in June, crackdown on debt risks drag
- MoF flow data week-ended 6/24: Japanese light buyers of foreign bonds, stocks
- MoF flow data: Foreigners sell net Y1.46 trln JGBs
- Japan May retail sales -1.6% m/m, +2.0% y/y, +2.6% y/y eyed, Apr +1.4%, +3.2%
- BoJ Harada: BOJ could cut ETF buying if inflation nears 2 pct
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 1,000 to a seasonally adjusted 241,000 for the week ended Jun. 23 while continuing claims for the week ended Jun.1 6 is expected to decline to 1.940 million from 1.944 million.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that final estimate of gross domestic product increased at a 1.2 percent annual rate in the first quarter.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the first quarter. The index is expected to rise 2.4 percent after posting similar gains in the previous quarter, while core PCE is likely to increase 2.1 percent.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending June 23.
- (1845 ET/2245 GMT) The Statistics New Zealand releases building permits seasonally adjusted data for the month of May. The index posted a fall of 7.6 percent in April.
- (1901 ET/2301 GMT) The GfK Group will release Britain's consumer confidence index for the month of June. The index is expected to decline to 7 after slumping to 5 in May.
- (1930 ET/2330 GMT) Japan's Statistics Bureau will release its National Consumer Price Index for the month of May. The index posted an annualized rise of 0.4 percent in the previous month.
- (1930 ET/2330 GMT) Japan's Statistics Bureau is expected to report that unemployment rate remained unchanged at 2.8 percent for the month of May.
- (1930 ET/2330 GMT) Japan's overall household spending probably declined at an annualized rate of 0.6 percent in May after tumbling 1.4 percent in June.
- (1850 ET/2350 GMT) Japan's Ministry of Economy, Trade, and Industry will release preliminary Industrial Production for the month of May. The indicator posted a final reading of 4.0 percent in the prior month.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade Operation 30-Year Ginnie Mae (max $1.05 bn)
- (1300 ET/1700 GMT) Federal Reserve Bank of St. Louis President James Bullard gives a speech.
FX BEAT
DXY: The dollar weakened against major currencies on bets that central banks in Europe were preparing to scale back monetary stimulus. The greenback against a basket of currencies traded 0.2 percent down at 95.83, having touched a low of 95.69 earlier, it’s lowest since Oct. 4. FxWirePro's Hourly Dollar Strength Index stood at -63.45 (Bearish) by 1000 GMT.
EUR/USD: The euro rallied to a 14-month high above the 1.1400 handle as recent hawkish comments by President Draghi at the ECB Forum boosted the bid tone around for major. The pair was also supported by better-than-expected Eurozone's economic sentiment indicator, which rose to 111.1 in June from 109.2 in May, surpassing expectations of a rise to 109.5. The European currency traded 0.3 percent up at 1.1414, having touched a high of 1.1434 earlier, its highest since May 5, 2016. FxWirePro's Hourly Euro Strength Index stood at 63.72 (Bullish) by 0900 GMT. The break above 1.1400 confirms major reversal, a jump till 1.1500/1.1546 level likely. On the lower side, near term support is around 1.1290 (low made yesterday after hitting high of 1.13880) and any break below will drag the pair down till 1.1250 (daily Kijun-Sen)/1.1200 (10- day MA).
USD/JPY: The dollar rose to a fresh 6-week high as a rebound in commodity prices strengthened risk-on market sentiment. However, downbeat Japanese retail sales data released earlier in the day and ongoing weakness in the greenback provided some support to the safe-haven yen. The major traded 0.1 percent up at 112.43, having hit a high of 112.63 earlier, its highest since May 17. FxWirePro's Hourly Yen Strength Index stood at -122.15 (Highly Bearish) by 0900 GMT. The pair is facing support at 108 and any break below will drag the pair down till 106.80. 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 climbed to a 5-week peak above the 1.3000 handle as investors were left convinced that the Bank of England would begin to tighten monetary policy in near term. On Wednesday, the Bank of England Governor Mark Carney stated that an interest rate hike was probably necessary and the central bank would debate on this in coming months. Sterling traded 0.3 percent up at 1.2960, having hit a high of 1.3007 earlier, its highest since May 25. FxWirePro's Hourly Sterling Strength Index stood at 96.84 (Slightly Bullish) by 1000 GMT. On the lower side, the near term support is around 1.2908 (23.6% retracement of 1.25890 and 1.30072) and any break below will drag the pair till 1.2850/1.2800 (daily Kijun-Sen). The near-term minor resistance is around 1.300 and any break above will take it till 1.3050 (May 18 high). Against the euro, the pound traded flat at 88.00 pence, having hit a 7-month low of 88.79 in the previous session.
USD/CHF: The Swiss franc advanced to an 8-month peak as the greenback tumbled to 9-month lows amid U.S. political concerns. The major trades 0.2 percent down at 0.9578, having touched a low of 0.9561 earlier, its lowest since Nov. 9. FxWirePro's Hourly Swiss Franc Strength Index stood at -14.04 (Neutral) by 1000 GMT. The pair has closed slightly below major support of 0.9614 yesterday which confirms bearish continuation, a decline till 0.9459 (Nov 9 low)/ 0.9520 (Jun 23rd, 2016 low). Bearish invalidation can be seen only above 0.97708 (Jun 15 high) and any break above will take the pair till 0.9850/0.9900.
AUD/USD: The Australian dollar climbed to a 3-month peak as a bounce in the price of iron ore and upbeat domestic data boosted the demand around the major. The Aussie trades 0.4 percent up at 0.7670, having hit a high of 0.7680 earlier, it’s strongest since Mar. 22. FxWirePro's Hourly Aussie Strength Index stood at 33.98 (Neutral) by 1000 GMT. On the lower side, near term support is around 0.7580 (10- day MA) and any break below will drag the pair till 0.7530 (200- MA)/0.7440 (61.8% retracement of 0.7320 and 0.7635)/0.7385 (61.8% retracement of 0.71599 and 0.77493) /0.7325/0.7300. The near term resistance is around 0.7680 and any break above targets 0.7700/0.7745.
Equities Recap
European shares reversed early trade gains, while the euro surged to its highest in over a year after European Central Bank President Mario Draghi hinted that the ECB could trim its stimulus this year.
The pan-European STOXX 600 index declined 0.1 percent to 385.44 points, while the FTSEurofirst 300 index lost 0.04 percent to 1,517.99 points.
Britain's FTSE 100 trades 0.3 percent up at 7,411.31 points, while mid-cap FTSE 250 eased 0.1 percent to 19,447.74 points.
Germany's DAX fell 0.03 percent at 12,643.48 points; France's CAC 40 trades 0.4 percent lower at 5,230.68 points.
Commodities Recap
Crude oil prices rallied to a 2-week high, extending a rally into a sixth consecutive session, as a decline in weekly U.S. production eased concerns about global oversupply. International benchmark Brent crude was trading 0.1 percent up at $47.50 per barrel by 0925 GMT, having hit a high of $47.80 earlier, its strongest since Jun. 14. U.S. West Texas Intermediate traded 0.1 percent up at $44.98 a barrel, after rising as high as $45.21, its strongest since Jun 14.
Gold prices eased after rising for two straight sessions as the dollar gained against the Japanese yen amid slight improvement in risk sentiment. Spot gold fell 0.1 percent to $1,247.12 per ounce at 0929 GMT, hovering towards a low of $1,235.26 hit on Monday, its lowest since May 16. U.S. gold futures for August delivery rose 0.1 percent to $1,249.70 per ounce.
Treasuries Recap
The U.S. Treasuries slumped ahead of the country’s Q1 GDP, initial jobless claims and FOMC member Bullard’s speech, due to be released later in the day. The yield on the benchmark 10-year Treasury, jumped 2-1/2 basis points to 2.25 percent, the super-long 30-year bond yields surged 3 basis points to 2.80 percent and the yield on short-term 2-year note traded nearly 1 basis point higher at 1.36 percent.
The UK gilts trended lower as investors are awaiting the release of the first-quarter gross domestic product (GD) by the end of this week. 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, jumped 4-1/2 basis points to 1.20 percent, the super-long 30-year bond yields climbed nearly 4 basis points to 1.81percent and the yield on the short-term 2-year traded nearly 3-1/2 basis points higher at 0.32 percent.
The Eurozone periphery bonds slumped as the global sell-off continues post-European Central Bank President Mario Draghi’s speech on Tuesday, with the benchmark German 10-year bund yields hitting over a month’s high ahead of the release of euro area CPI inflation data by end of this week. The benchmark German 10-year bond yields, jumped 5-1/2 basis points to 0.41 percent, the French 10-year bond yields, surged 4-1/2 basis points to 0.75 percent, Irish 10-year bond yield hovered around 0.81 percent, Italian equivalent also climbed 4-1/2 basis points to 2.06 percent, Netherlands 10-year bonds yield jumped 5 basis points to 0.60 percent, Portuguese equivalents rose nearly 3 basis points to 2.99 percent and the Spanish 10-year yields traded 3 basis points higher at 1.44 percent.
The Japanese government bonds slipped as investors remained cautious ahead of the country’s core consumer price inflation for the month of May, scheduled to be released on June 30. In addition, the unemployment rate for the month of May, due on the same day will add further direction to the bond market. The benchmark 10-year bond yield, rose nearly 1 basis point to 0.06 percent, the long-term 30-year bond yields hovered around 0.82 percent and the yield on the short-term 2-year note traded nearly 1/2 basis point higher at -0.12 percent.
The New Zealand bonds remained unnerved at the time of closing as investors remain sidelined in any major trading activity due to lack of any significant economic data. However, the solid sell-off in global bonds has cushioned any further fall in yields. At the time of closing, the yield on the benchmark 10-year bond, fell 1/2 basis point to 2.89 percent, the yield on 7-year note hovered around 2.79 percent and the yield on short-term 2-year note ended flat at 2.03 percent.
The Australian bonds slumped as the massive sell-off continued in global debt markets in response to the European Central Bank (ECB) President Mario Draghi’s comments late Tuesday and Wednesday. The yield on the benchmark 10-year Treasury note, jumped 4-1/2 basis points to 2.51 percent, the yield on 15-year note also surged 4-1/2 basis points to 2.86 percent and the yield on short-term 2-year traded 2-1/2 basis points higher at 1.72 percent.
