Market Roundup
- Interior minister offers to resign, in blow to German coalition
- Japan Q2 Tankan Big Mf Index, 21, 22 f'cast, 24 last
- Japan Q2 Tankan Big Mf Outlook DI, 21, 20 f'cast, 20 last
- China Jun Caixin Mfg PMI Final, 51.0, 51.0 f'cast, 51.1 last
- Australia home prices fall in June, pressure to continue-CoreLogic
- Mexican leftist Lopez Obrador wins presidency -exit polls
- Trump blasts OPEC, warns European companies against Iran ties
- Trump will press Putin on election meddling denials - security aide
- Three quarters of big UK firms downbeat on Brexit -Deloitte survey
Economic Data Ahead
- (0355 ET/0755 GMT) Germany Jun Markit/BME Mfg PMI, 55.9 f'cast, 55.9 last
- (0400 ET/0800 GMT) EU Jun Markit Mfg Final PMI, 55.0 f'cast, 55.0 last
- (0430 ET/0830 GMT) Great Britain Jun Markit/CIPS Mfg PMI, 54.0 f'cast, 54.4 last
- (0500 ET/0900 GMT) EU May Unemployment Rate, 8.5% f'cast, 8.5% last
Key Events Ahead
- (0930 ET/1330 GMT) Participation by ECB Chief Economist Peter Praet in a panel at the Informal Seminar on the occasion of Erkki Likkanen's farewell organised by the Bank of Finland in Helsinki
FX Beat
DXY: The dollar index rebounded on growing expectations that the Federal Reserve will raise rates at least once and possibly twice by the end of the year. The greenback against a basket of currencies trades 0.4 percent up at 94.83, having touched a high of 95.53 on Thursday, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at -71.23 (Bearish) by 0500 GMT.
EUR/USD: The euro slumped after German Interior Minister Horst Seehofer offered his resignation, escalating a row over migration with Chancellor Angela Merkel that threatens her government. The European currency traded 0.3 percent down at 1.1644, having touched a high of 1.1719 on Tuesday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 43.51 (Neutral) by 0500 GMT. Investors’ attention will remain the Eurozone manufacturing PMI and producer price index, ahead of U.S. manufacturing PMI from both Markit and ISM. Immediate resistance is located at 1.1700, a break above targets 1.1744 (June 4 High). On the downside, support is seen at 1.1530 (5-DMA), a break below could drag it till 1.1500.
USD/JPY: The dollar trimmed gains after rising to an over 1-week peak earlier as investors became wary of possible disruptions from the trade disputes triggered by U.S. President Donald Trump's protectionist America First policy. The major was trading 0.1 percent up at 110.73, having hit a high of 111.06 earlier, its highest since May 22. FxWirePro's Hourly Yen Strength Index stood at -56.80 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. manufacturing PMI from both Markit and ISM. Immediate resistance is located at 111.39 (May 21 High), a break above targets 111.08 (June 18 High). On the downside, support is seen at 111.69 (Jan 12 Low), a break below could take it lower 109.68 (June 27 Low).
GBP/USD: Sterling declined as investors await the British Markit Manufacturing Purchasing Managers Index, which is expected to ease to 53.5 in June from previous month's reading of 54.4. The major traded 0.3 percent down at 1.3171, having hit a low of 1.3049 on Thursday; it’s lowest since Nov. 2. FxWirePro's Hourly Sterling Strength Index stood at 2.78 (Neutral) 0500 GMT. Investors’ attention will remain on UK Markit PMI figures, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3250, a break above could take it near 1.3314 (June 22 High). On the downside, support is seen at 1.3146 (June 20 Low), a break below targets 1.3120 (June 21 Low). Against the euro, the pound was trading 0.05 percent down at 88.43 pence, having hit a low of 88.90 pence on Friday, it’s lowest since March 12.
AUD/USD: The Australian dollar tumbled after domestic home prices declined for a ninth straight month in June as tighter lending standards stifled investment demand in Sydney and Melbourne. The Aussie trades 0.4 percent down at 0.7371, having hit a low of 0.7323 on Wednesday; it’s lowest since Jan 2017. FxWirePro's Hourly Aussie Strength Index stood at 69.97 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7300, a break below targets 0.7280. On the upside, resistance is located at 0.7423 (June 26 High), a break above could take it near 0.7443 (June 22 High).
NZD/USD: The New Zealand dollar plunged, hovering towards its lowest level since mid-2016, as weakness in Chinese asset prices and concerns about global trade tensions dented investor risk appetite. The Kiwi trades 0.2 percent down at 0.6762, having touched a low of 0.6736 on Friday, its lowest level since June 2016. FxWirePro's Hourly Kiwi Strength Index was at -14.39 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6810 (June 28 High), a break above could take it near 0.6854 (10-DMA). On the downside, support is seen at 0.6736 (Previous Session High), a break below could drag it below 0.6700.
Equities Recap
Asian shares plunged amid weakness in Chinese asset prices, while the greenback rallied on growing expectations that the Fed will hike rates at least once and probably twice by the end of the year.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.2 percent.
Tokyo's Nikkei slumped 2.2 percent to 21,811.93 points, Australia's S&P/ASX 200 index declined 0.3 percent to 6,177.80 points, and South Korea's KOSPI eased 2.4 percent to 2,271.54 points.
Shanghai composite index fell 2.5 percent to 2,775.56 points, while CSI300 index was trading 2.9 percent down at 3,407.96 points. Taiwan shares shed 0.5 percent to 10,777.94 points.
Commodities Recap
Crude oil prices declined by more than 1 percent as supplies from top exporter Saudi Arabia increased and as signs of an economic slowdown in Asia dented the outlook for demand. International benchmark Brent crude was trading 1.3 percent down at $78.13 per barrel by 0459 GMT, having hit a high of $79.53 the session before, its highest since May 31. U.S. West Texas Intermediate was trading 1.4 percent down at $73.24 a barrel, after rising as high as $74.43 on Friday, its highest since Nov. 2014.
Gold prices declined as the dollar firmed after last week's U.S. inflation data boosted the Federal Reserve's outlook for future interest rate hikes. Spot gold was 0.2 percent lower at $1,250.72 an ounce by 0352 GMT, having touched a low of $1,245.65 on Friday, its lowest since December 13. U.S. gold futures for August delivery were down 0.2 percent at $1,252.50 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.836 percent lower by 0.015 bps, while 5-year yield was 0.013 bps down at 2.717 percent.
The Australian government bond futures edged higher, with the three-year bond contract up half a tick at 97.925. The 10-year contract rose 2 ticks to 97.3800.
The New Zealand government bonds were mostly flat.
