Market Roundup
• US NAHB steady at 58 vs previous, misses forecast 59.
• Fed’s Dudley: U.S. economy looks good but Fed remains cautious, rate hikes gradual.
• Wall St reverses course as oil pares losses, crude of worst of day after Doha disappointment.
• ECB's Villeroy: risk of Brexit, refugee crisis, terrorism & lower Chinese growth heighten uncertainties, prefers Britain stay in EU.
• BRL falls as impeachment vote triggers profit-taking, BCB unwinds more swaps.
• Fund buying helps copper offset losses triggered by oil, weather concerns disrupt supply.
• Venezuela oil minister: U.S. helped ruin deal in Doha, hopes to raise oil exports by 2.3 mn BPD this year.
• Blackrock sees negative returns from long-dated USTs/EZ bonds over next 5 years.
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events, Other Releases (GMT)
• 01:30 Australia- Reserve Bank of Australia will release the minutes of its April monetary policy meeting
Currency Summaries
EUR/USD is likely to find support at 1.1295 levels and currently trading at 1.1330 levels. The pair has made session high at 1.1330 and hit lows at 1.1295 levels. The euro inched higher against dollar on Monday, after the top oil producers failed to agree to cut oil output, boosting risk appetite and increasing demand for low yielding currencies. During risk in the market euro has been used in recent carry trades, with investors buying euro cheaply because of their zero interest rates. This week’s focus shifts to European Central Bank monetary policy meeting Thursday. The euro was last up 0.27 percent against the dollar at $1.1312 after hitting a session high of $1.1332 .The dollar index, which measures the greenback against a basket of six major currencies, was down 0.22 percent at 94.486. The dollar was down 0.27 percent against the Swiss franc at 0.9643 franc.
GBP/USD is supported in the range of 1.4200 currently trading at 1.4276 levels. It reached session high at 1.4292 and hit low at 1.4265 levels. Sterling surged strongly against the dollar on Monday, as the buyers stepped in as world stock markets rose and on increased demand for higher-yielding currencies, including the pound, even though uncertainty over the prospect of Britain exiting the European Union checked gains. Meanwhile earlier in the European session, sterling had come under pressure as British finance minister George Osborne said a vote to quit the European Union in a referendum on June 23 would leave the economy 6 percent smaller by 2030 than if it stayed in the bloc. Sterling was up 0.2 percent at $1.4250, having fallen to $1.4132 at the start of the European session, while the euro was flat at 79.425, well below a 22-month high of 81.17 hit late last week.
USD/CAD is supported at 1.2750 levels and is trading at 1.2797 levels. It has made session high at 1.2825 and lows at 1.2840 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday as investor optimism was boosted in dollar after oil producers' failed to agree on a plan to curb global supply gut faded. Commodity-linked currencies such as the Australian, New Zealand and Canadian dollars and the Russian ruble turned positive against the U.S. dollar after falling earlier on a collapsed plan to cap oil production at current levels on Sunday at a producers' meeting in Doha, Qatar. The loonie, as Canada’s currency is colloquially known, hit daily lows in afternoon after crude oil prices rebounded towards 42$ per barrel. The currency's strongest level of the session was C$1.2795, while it touched its weakest since April 11 at C$1.2990 early in the session.
AUD/USD is supported around 0.7685 levels and currently trading at 0.7737 levels. It hit session high at 0.7756 and made session lows at 0.7738 levels. The Australian dollar inched higher against US dollar on Monday as growing doubts about Federal Reserve’s raising rates in the coming months and rebound in oil prices weighed on risk appetite and boosted commodity related currencies. Initially The Australian dollar slipped in the early Asian session after a meeting of oil exporters on Sunday hoping to freeze oil output collapsed. The Australian dollar gained around 1 percent in the session to $0.7748, hitting a fresh 10-month peak of $0.7760 touched on Monday. Yet, renewed weakness in US dollar and less demand for risk appetite, sent a wave of buying across commodities and stocks.
Equities Recap
European shares recovered on Monday after a weak open, with auto and travel stocks gaining and the energy sector off its lows after a meeting by major exporters in Doha collapsed without a deal to freeze output.
UK's benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day down by 0.30 percent, Germany's DAX ended up by 0.8 percent, France’s CAC finished the day up by 0.4 percent.
The Dow Jones industrial average climbed to a nine-month high on Monday, as Hasbro and Disney shares lifted the consumer discretionary sector while investors braced for a flurry of quarterly earnings reports through the week.
Dow Jones closed up by 0.59 percent, S&P 500 ended up by 0.65 percent, Nasdaq finished the day up by 0.43 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday as oil prices pared earlier losses and investors focused on next week’s Federal Reserve meeting.
Benchmark 10-year notes fell 6/32 in price to yield 1.77 percent, up from 1.75 percent on Friday.
Commodities Recap
Gold steadied on Monday as the dollar .DXY fell against a basket of major currencies, world stock markets edged higher, and oil prices pared earlier losses that had been triggered by the failure by oil producers to agree an output freeze.
Spot gold was down 0.02 percent at $1,233.35 an ounce. U.S. futures for June delivery GCM6 settled up 0.03 percent at $1,235 an ounce.
Oil prices slid on Monday after a plan by major oil producers to freeze production was scuttled, but a Kuwaiti oil industry strike helped the market pare losses and settle off the day's lows.
Brent settled down 19 cents, or 0.4 percent, at $42.91 a barrel. It had fallen $3 earlier in the session.
U.S. crude's West Texas Intermediate (WTI) benchmark closed down 58 cents, or 1.4 percent, at $39.78 a barrel, after sliding to $37.61 at the day's low.
