Market Roundup
- China May retail sales y/y, +10.7% vs forecast +10.6%, last +10.7%
- China Jan-May fixed asset inv y/y, +8.6% vs forecast +8.8%, last +8.9%
- China May industrial output y/y, +6.5% vs forecast +6.3%, last +6.5%
- China says nearly 6 mln new urban jobs created in Jan-May
- BoJ – Tweaks to econ assessment may be, easy policy to continue
- Australia Jun cons sentiment m/m, -1.8%, last -1.1%
- Australia risks housing correction with foreign buyer tax hike
- New Zealand Q1 c/a balance, -NZ$8.132 bln vs forecast -NZ$7.28 bln
- New Zealand yr to Mar c/a balance, -3.1% of GDP vs forecast -2.7%
- U.S. attorney general dodges Trump questions, angering Democrats
- UK's May faces calls to soften Brexit as political limbo drags on
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Apr Avg Earnings (Ex-Bonus), +2.0% eyed; last +2.1%
- (0430 ET/0830 GMT) Great Britain Apr ILO Unemployment Rate, +4.6% eyed; last +4.6%
- (0430 ET/0830 GMT) Great Britain May Claimant Count Unemployment Chng, 10.00k eyed; last 19.40k
- (0500 ET/0900 GMT) Eurozone Apr Industrial Prod, +0.5% m/m, +1.3% y/y eyed; last -0.1%, +1.9%
- (0500 ET/0900 GMT) Eurozone Q1 Employment, last +0.3% q/q, +1.1% y/y
Key Events Ahead
- N/A IMF's Lagarde, Bundesbank's Weidmann speak at a conf
- (0530 ET/0930 GMT) Portugal 5Y E0.600 bln auction
- (0530 ET/0930 GMT) Portugal 10Y E0.600 bln auction
- (0415 ET/0815 GMT) ECB's Constancio speaks at an Italian Banking Convention
- (0930 ET/1330 GMT) Riksbank's Skingsley participates in a panel discussion
FX Beat
DXY: The dollar eased versus its major peers as investors remained cautious ahead of the U.S. Federal Reserve's monetary policy decision, followed by a press conference by Fed Chair Janet Yellen. The greenback against a basket of currencies traded down at 96.96, having touched a high of 97.50 on Friday, it’s highest since May 31. FxWirePro's Hourly Dollar Strength Index stood at -26.83 (Neutral) by 0500 GMT.
EUR/USD: The euro edged up, extending gains above the 1.1200 handle, as the greenback slightly eased ahead of Federal Reserve's policy meeting that could provide clues on the U.S. monetary outlook. The European currency traded up at 1.1215, having touched a low of 1.1166 last week, its lowest since May 31. FxWirePro's Hourly Euro Strength Index stood at 74.83 (Bullish) by 0400 GMT. Investors’ attention will remain on Eurozone industrial production and employment change figures, ahead of the U.S. consumer price index, retail sales and Fed policy decision for further clues on the major. Immediate resistance is located at 1.1234 (10-DMA), a break above targets 1.1300. On the downside, support is seen at 1.1166 (June 9 Low), a break below could drag it near 1.1100.
USD/JPY: The dollar consolidated within a narrow range as investors refrained from taking big positions ahead of Federal Reserve's policy meeting that could give hints on the pace of possible U.S interest rate hikes through 2017. The major traded flat at 110.06, having touched a high of 110.80 on Friday, its highest since Jun. 2. FxWirePro's Hourly Yen Strength Index stood at -38.27 (Neutral) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. consumer price index, retail sales and Fed policy decision due later in the day. Immediate resistance is located at 110.59 (50.0% retracement of 112.12 and 109.11), a break above targets 110.96 (38.2% retrace). On the downside, support is seen at 109.80 (Previous Session Low), a break below could take it near 109.38 (June 8 Low).
GBP/USD: Sterling edged down, reversing some of its previous session gains, as markets remain wary ahead of the UK employment data, U.S. CPI and FOMC decision. The major traded down at 1.2746, having hit a low of on Friday, its weakest since Apr 18. FxWirePro's Hourly Sterling Strength Index stood at -148.54 (Highly Bearish) by 0400 GMT. Investors’ focus now shifts on UK employment report, ahead of the Fed monetary policy decision scheduled later in the day. Immediate resistance is located at 1.2766 (61.8% retrace of 1.2977 and 1.2365), a break above could take it near 1.2800. On the downside, support is seen at 1.2700, a break below targets 1.2635. Against the euro, the pound traded 0.1 percent down at 87.98 pence, having hit a 7-month low of 88.66 on Monday.
AUD/USD: The Australian dollar rose after data showed China's May industrial production came in at 6.5 percent y/y, beating the estimate of 6.3 percent, while retail sales rose at 10.7 percent, bettering the estimate of 10.6 percent. Meanwhile, the Urban Investment (YTD) growth eased to 8.6 percent from the April’s print of 8.9 percent. The Aussie trades 0.1 percent up at 0.7542, hovering towards a high of 0.7566 hit on Wednesday, it’s strongest since Apr 25. FxWirePro's Hourly Aussie Strength Index stood at 18.90 (Neutral) by 0500 GMT. Investors will continue to digest mixed Chinese data, ahead of U.S. economic releases. Immediate support is seen at 0.7524 (Previous Session Low), a break below targets 0.7499 (June 7 Low). On the upside, resistance is located at 0.7570, a break above could take it near 0.7586 (Apr 24 High).
NZD/USD: The New Zealand dollar rose, extending gains above the 0.7200 handle, despite New Zealand’s current account deficit widening to 3.1 percent of GDP in the year to March. The Kiwi trades 0.1 percent up at 0.7222, having touched a peak of 0.7227 earlier, its strongest level since Feb. 28. FxWirePro's Hourly Kiwi Strength Index was at 60.33 (Bullish) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7250, a break above could take it near 0.7300. On the downside, support is seen at 0.7182 (61.8% retracements of 0.7109 and 0.7227), a break below could drag it till 0.7154 (38.2% retrace).
Equities Recap
Asian shares eased, while the greenback declined as investors refrained from taking big positions ahead of Fed policy decision and Chair Janet Yellen speech that could provide further clues on the U.S. monetary outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan edged down.
Tokyo's Nikkei rose 0.1 percent to 19,925.81 points, Australia's S&P/ASX 200 index surged 0.9 percent to 5,824.90 points and South Korea's KOSPI fell 0.2 percent to 2,368.72 points.
Shanghai composite index fell 0.6 percent to 3,134.72 points, while CSI300 index was trading 1.1 percent down at 3,540.11 points.
Hong Kong’s Hang Seng was trading 0.2 percent lower at 25,797.79 points. Taiwan shares shed 0.5 percent to 10,072.46 points.
Commodities Recap
Crude oil prices steadied after falling in the previous sessions, despite data showing a build in U.S. crude stocks and OPEC reporting a rise in its production although its pledge to reduce. International benchmark Brent crude was trading 0.1 percent up at $48.28 per barrel by 0411 GMT, having hit a low of $47.41 on Monday, its weakest since May 5. U.S. West Texas Intermediate traded 0.1 percent up at $45.97 a barrel, after falling as low as $45.19 on Thursday, its lowest since May 5.
Gold prices edged up after declining to a 2-week low in the prior session, as investors' waited for the end of a two-day U.S. Federal Reserve meeting, with the central bank likely to hike interest rates and give indications on its monetary policy for the rest of the year. Spot gold gained 0.3 percent to $1,269.31 per ounce at 0414 GMT, having hit a low of $1,259.22 an ounce, its lowest since Jun. 2. U.S. gold futures for August delivery climbed 0.1 percent to $1,269.80 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.056 percent lower by 0.001 bps, while 5-year yield was 0.002 bps down at 1.778 percent.
The Australian bonds remained mixed as investors remain keen to watch the Federal Open Market Committee’s (FOMC) monetary policy decision, scheduled to be unveiled later today. The yield on the benchmark 10-year Treasury note traded flat at 2.42 percent, the yield on the 15-year note fell nearly 1 basis point to 2.78 percent while the yield on short-term 2-year rose nearly 1 basis point to 1.63 percent.
The New Zealand bonds ended on a mixed tone in a silent trading session that witnessed no data of economic significance. At the time of closing, the yield on the benchmark 10-year bond rose 1/2 basis point to 2.82 percent, the yield on 7-year note slipped 1 basis point to 2.70 percent while the yield on short-term 2-year note also ended 1 basis point lower at 1.95 percent.
The Canadian government bond prices were much lower across the yield curve, with the two-year down 12.5 Canadian cents to yield 0.911 percent and the 10-year falling 69 Canadian cents to yield 1.561 percent. The 2-year yield, which has jumped more than 18 basis points since Friday's jobs data, touched its highest intraday since January 2015 at 0.930 percent.
