Market Roundup
- Shock UK election leaves May hanging by a thread
- With 633 seats declared Conservatives were on 308, Labour on 258
- Comey says Trump fired him to undermine FBI Russia investigation
- China May CPI y/y, +1.5% vs forecast +1.5%, last +1.2%
- China May CPI m/m, -0.1% vs forecast -0.2%, last +0.1%
- China May PPI y/y, +5.5% vs forecast +5.7%, last +6.4%
- Still far to go to reach 2% inflation target - BoJ’s Kuroda
- Japan May money supply M2 +3.9% y/y, M3 +3.4%, broadest liquidity +2.8%
- Australia Apr housing fin m/m, -1.9% vs forecast -1.0%, last -0.9%
- Investors in U.S.-based funds poured $1.4 bln into MFs, ETFs -Lipper
- U.S.-based emerging markets equity funds attracted $696 mln of inflows -Lipper
- Foreign CB US debt holdings $21 bln to $3.3 tln May 31 wk
- Treasuries $21 bln to $2.9 tln,
$285 mln to $262.9 bln
Economic Data Ahead
- (0245 ET/0645 GMT) France Apr Ind Output m/m, 0.2% eyed; last 2.0%
- (0430 ET/0830 GMT) Great Britain Apr Mfg Output, 0.9% m/m, 0.7% y/y eyed; last -0.6%, 2.3%
- (0430 ET/0830 GMT) Great Britain Apr Ind Output, 0.8%, -0.2% eyed; last -0.5%, 1.4%
- (0430 ET/0830 GMT) Great Britain Apr Goods Trade Bal (GBP), -12.00 bln eyed; last -13.44 bln
Key Events Ahead
- N/A Informal meeting of the EU General Affairs Council (Final Day)
- (0630 ET/1030 GMT) Bank of Spain's Linde speaks at Goldman Sachs conference
FX Beat
DXY: The dollar gained across the board despite subdued U.S. Treasury yields and weaker market sentiment. The greenback against a basket of currencies traded 0.1 percent up at 97.29, having touched a high of 97.39 earlier, it’s highest since May 31. FxWirePro's Hourly Dollar Strength Index stood at 29.29 (Neutral) by 0500 GMT.
EUR/USD: The euro eased to a 1-week low after the European Central Bank cut its forecasts for inflation and said policymakers had not discussed scaling back its massive bond-buying programme. The European currency traded 0.1 percent down at 1.1203, having touched a high of 1.1285 last week, its highest since Nov 9. FxWirePro's Hourly Euro Strength Index stood at -40.67 (Neutral) by 0400 GMT. Investors’ attention will remain on the U.S. wholesale inventories and economic optimism index, as the Eurozone's economic calendar remains absolutely data empty. Immediate resistance is located at 1.1256 (5-DMA), a break above targets 1.1300. On the downside, support is seen at 1.1276 (38.2% retracement of 1.1109 and 1.1285), a break below could drag it near 1.1163 (21 DMA).
USD/JPY: The dollar advanced, extending gains for the third consecutive session, as investors seem to ignore the potential for a political turmoil in the UK. The major traded 0.1 percent up at 110.16, having touched a low of 109.11 on Wednesday, its lowest since Apr. 21. FxWirePro's Hourly Yen Strength Index stood at -34.39 (Neutral) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. economic optimism index and wholesale inventories figures. Immediate resistance is located at 110.60 (50.0% retracement of 112.12 and 109.11), a break above targets 111.00. On the downside, support is seen at 109.50, a break below could take it near 108.88 (Apr. 21 Low)
GBP/USD: Sterling slumped more than 1 percent to a 7-week low as investors eagerly awaited the final verdict of the UK snap election, with the exit polls widely suggesting a hung parliament. The major traded 1.4 percent down at 1.2768, having hit a low of 1.2693 earlier in the session, its weakest since Apr 18. FxWirePro's Hourly Sterling Strength Index stood at -94.06 (Slightly Bearish) by 0400 GMT. Investors’ await UK elections results, ahead of U.S. economic releases. Immediate resistance is located at 1.2800, a break above could take it near 1.2850. On the downside, support is seen at 1.2693 (Session Low), a break below targets 1.2650. Against the euro, the pound traded 1.4 percent down at 87.83 pence, having hit a near 5-month low of 88.24 earlier.
AUD/USD: The Australian dollar declined after data showed China PPI eased to 5.5 percent y/y in May compared to the expected figure of 5.7 percent. The Aussie trades 0.1 percent down at 0.7534, having hit a high of 0.7566 on Wednesday, it’s strongest since Apr 25. FxWirePro's Hourly Aussie Strength Index stood at 48.28 (Neutral) by 0500 GMT. Investors will continue to digest downbeat Chinese PPI report, ahead of U.S. economic releases. Immediate support is seen at 0.7506 (5-DMA), a break below targets 0.7499 (June 7 Low). On the upside, resistance is located at 0.7550, a break above could take it near 0.7586 (Apr 24 High).
NZD/USD: The New Zealand dollar steadied near 4-month highs despite subdued oil prices and a broadly stronger US dollar. The Kiwi trades flat at 0.7211, having touched a peak of 0.7222 the day before, its strongest level since Feb. 28. FxWirePro's Hourly Kiwi Strength Index was at 29.24 (Neutral) by 0500 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7222 (Previous Session High), a break above could take it near 0.7246 (Feb. 23 High). On the downside, support is seen at 0.7171 (78.6% retracements of 0.6988 and 0.7222), a break below could drag it till 0.7132 (61.8 retrace).
Equities Recap
Asian shares gained, while sterling tumbled by more than 1 percent as British elections seemed to leave no single party with a clear claim to power, likely resulting in a hung parliament.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.3 percent.
Tokyo's Nikkei advanced 0.4 percent to 19,996.75 points, Australia's S&P/ASX 200 index surged 0.1 percent to 5,683.00 points and South Korea's KOSPI rose 0.8 percent to 2,381.99 points.
Shanghai composite index gained 0.1 percent to 3,152.68 points, while CSI300 index was trading 0.3 percent up at 3,572.44 points.
Hong Kong’s Hang Seng was trading 0.4 percent lower at 25,949.78 points. Taiwan shares shed 0.2 percent to 10,199.65 points.
Commodities Recap
Crude oil prices continued to decline as evidence mounted that a fuel supply overhang continued despite an ongoing effort led by OPEC to tighten the market by holding back production. International benchmark Brent crude was trading 0.2 percent down at $47.78 per barrel by 0414 GMT, having hit a low of $47.55 the day before, its weakest since May 5. U.S. West Texas Intermediate traded 0.2 percent up at $45.57 a barrel, after falling as low as $45.19 on Thursday, its lowest since May 5.
Gold edged down, extending losses for the third consecutive session, ahead of the UK election verdict with early results suggesting no clear winner which could push the country into a new bout of political turmoil before Brexit talks. Spot gold was down 0.3 percent at $1,274.81 per ounce at 0422 GMT, having hit a peak of $1,295.93 an ounce on Tuesday, its strongest since Nov. 9. U.S. gold futures for August delivery were 0.2 percent lower at $1,277.30.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.190 percent lower by 0.004 bps, while 5-year yield was 0.003 bps down at 1.751 percent.
The Australian bonds remained mixed as doubts have clouded over the United Kingdom’s general election results, in the counting today. The yield on the benchmark 10-year Treasury note hovered around 2.42 percent, the yield on the 15-year note fell 1 basis point to 2.80 percent while the yield on short-term 2-year traded 1 basis point higher at 1.62 percent.
The New Zealand remained flat at the time of closing Friday in a silent trading session that witnessed no significant data. At the time of closing, the yield on the benchmark 10-year bond hovered around 2.78 percent, the yield on 7-year note also traded flat at 2.68 percent and the yield on short-term 2-year note ended 1/2 basis point lower at 1.95 percent.
The Canadian government bond prices were slightly lower across the yield curve, with the two-year down 0.5 Canadian cent to yield 0.718 percent and the 10-year falling 8 Canadian cents to yield 1.418 percent. On Tuesday, the 10-year yield hit its lowest intraday in nearly seven months at 1.373 percent.
