Market Roundup
• US Redbook YY 2.5%, 1.8% - previous.
• US JOLTS Jobs opening 6.04 mln, 5.79 mln –previous.
• US Treasury’s Mnuchin: US imbalance in trade with China is a 'significant concern'.
• Trump says Qatar row shows his Middle East trip "paying off".
• US, Mexico reach sugar pact but US producers not on board.
• UK Conservatives to win 304 seats in UK election - YouGov election model.
• Germany's Merkel: renewed EU-US trade talks should not start until after German election in Sept.
Looking Ahead - Economic Data (GMT)
• --:-- China FX Reserves (Monthly) 3.040 trln forecast, 3.030 –previous
• 23:50 Japan Foreign reserves (USD) 1242.3 bln – previous
• 01:30 Australia GDP YY* 1.5% forecast, 2.4% - previous
Looking Ahead - Events, Other Releases (GMT)
• G20 leaders meet for International summit in Hamburg till June 8
Currency Summaries
EUR/USD is likely to find support at 1.1161 levels and currently trading at 1.1278 levels. The pair has made session high at 1.1283 and hit lows at 1.1250 levels. Euro inched higher against the dollar on Tuesday as investors shunned riskier assets ahead of what is expected to be a busy Thursday when Britain goes to the polls and former FBI director James Comey testifies before Congress. Comey, who was investigating a possible collusion between Donald Trump's presidential campaign and Russia to sway the 2016 U.S. election, was fired in May. Comey will be grilled by the Senate Intelligence Committee on whether Trump tried to get him to back off an investigation of alleged ties between his 2016 campaign and Russia. His testimony could dampen already flagging momentum for Trump's legislative agenda of rolling back healthcare reforms and overhauling the tax code. Investors will also watch out for the European Central Bank's meet, where policymakers are expected to take a more benign view of the economy. The euro was up 0.16 percent against the dollar to $1.127. The dollar index, which tracks the greenback against six major rivals, was down 0.18 percent at 96.624.
GBP/USD is supported in the range of 1.2853 levels and currently trading at 1.2890 levels. It reached session high at 1.2902 and dropped to session low at 1.2876 levels. Sterling initially rose against the dollar on Tuesday but reversed course as investors expectations of victory for the ruling Conservative Party in a general election eased. The pound has seen choppy trading on polls suggesting outcomes ranging from a majority for Prime Minister Theresa May's party to a 'hung' parliament in which no party has an overall majority. A poll late on Monday from Survation for ITV television put the Conservatives' lead over the opposition labour party at just 1 percentage point. That contrasted with an earlier ICM poll showing the Conservatives with an 11 point lead, which sent sterling higher on Monday. Investors had bet a predicted landslide win for May would strengthen her position in Britain's exit talks with the European Union, due to start later this month. But the latest polls were moderating some of those expectations. The pound peaked on Tuesday at $1.2951 against a broadly weaker dollar, its highest in 12 days, before edging back to trade 0.1 percent lower on the day by 1800 GMT at $1.2886.
USD/CAD is supported at 1.3435 levels and is trading at 1.3454 levels. It has made session high at 1.3485 and lows at 1.3441 levels. The Canadian dollar was little changed against its U.S. counterpart on Tuesday, pulling back from an earlier six-day high as oil prices fell and investors braced for key events later in the week. Prices of oil, one of Canada's major exports, retreated on concerns that a diplomatic rift between Qatar and several Arab states including Saudi Arabia could undermine efforts by the Organization of the Petroleum Exporting Countries to tighten the market. A European Central Bank meeting, a parliamentary election in the UK and testimony by James Comey, former director of the U.S. Federal Bureau of Investigation, to a Senate committee are also due on Thursday, while Canada's employment report for May is due on Friday. The Canadian dollar was trading at C$1.3471 to the greenback, or 74.23 U.S. cents, nearly unchanged. The currency's weakest level of the session was C$1.3485, while it touched its strongest since May 31 at C$1.3444.
AUD/USD is supported around 0.7455 levels and currently trading at 0.7512 levels. It hit session high at 0.7520 and made session lows at 0.7499 levels. The Australian dollar rose against the greenback on Tuesday as Australian dollar was boosted after Reserve Bank of Australia stuck to its optimistic outlook for the economy, despite the likelihood of a soft reading on first-quarter growth. The Australian dollar was firm at $0.7507, having recovered from daily low of $0.7455. Resistance was found at Monday's high of 0.7520 cents and a break above would target $0.7554. Earlier on Tuesday, the Aussie had dropped a third of a U.S. cent after news Australia's current account deficit narrowed to A$3.1 billion in the first quarter. The Reserve Bank of Australia (RBA) kept rates at a record low of 1.5 percent at its monthly policy review and affirmed its neutral bias. Australia's first-quarter gross domestic product data is due on Wednesday. The median forecast from a poll predicts growth of 0.2 percent in the first quarter from the previous period, with some analysts seeing a small contraction.
Equities Recap
European shares extended their fall on Tuesday, with healthcare stocks particularly weak, as a diplomatic spat in the Middle East weakened appetite for risky assets across the board.
UK's benchmark FTSE 100 closed down by 0.06 percent, the pan-European FTSEurofirst 300 ended the day down by 0.64 percent, Germany's Dax ended down by 1.06 percent, France’s CAC finished the day down by 0.79 percent.
U.S. stocks edged lower on Tuesday as investors shunned riskier assets ahead of what is expected to be a busy Thursday when Britain goes to the polls and former FBI director James Comey testifies before Congress.
Dow Jones closed down by 0.22 percent, S&P 500 ended down 0.28 percent, Nasdaq finished the day down by 0.33 percent.
Treasuries Recap
U.S. Treasury yields fell on Tuesday as nervous investors favoured bonds and other safe-haven assets ahead of a trio of events on Thursday: Britain's general election, the European Central Bank's policy meeting and former FBI Director James Comey's testimony before a Senate panel.
At late trading, the 10-year yield was 2.145 percent, down nearly 4 basis points from late on Monday.
U.S. 30-year bonds rose 22/32 in price, yielding 2.807 percent, compared with Monday's 2.84 percent.
U.S. two-year yields, meanwhile, were at 1.294 percent, from 1.306 percent late on Monday.
Commodities Recap
Gold rose to the highest in seven months on Tuesday on a slump in the dollar to a seven-month low and safe-haven demand driven by a rift in the Middle East, an upcoming European Central Bank meeting and the British election.
Spot gold was up 1.1 percent at $1,294.34 an ounce by 2:25 p.m. EDT (1825 GMT), having earlier touched its highest since Nov. 9 at $1,295.97. U.S. gold futures rose 1.2 percent to settle at $1,297.50.
Oil prices edged upward Tuesday, finding technical support after sliding below $47 a barrel on pressure from a diplomatic rift in the Middle East and sustained high crude inventories in the United States.
U.S. crude oil futures settled up 79 cents, or 1.67 percent, at $48.19 per barrel. Brent was last up 1.17 percent on the day, or 58 cents, at $50.05.
