Market Roundup
- Taking aim at U.S., China says provoking trade disputes is 'naked economic terrorism'
- Mueller says he could not charge Trump as Congress weighs impeachment
- Hammond warns UK leadership hopefuls against low tax, deregulation dogma
- Brexit shutdowns hammer UK car production in April - industry group
- BOJ policymaker warns against 'reckless' easing to reach price goal
- Australia's minimum wage rises slowly as growth, inflation cool
- Australia Apr Building Approvals, -4.7%, 0.0% f'cast, -15.5% prev, -13.4% rvsd
- Australia Q1 Capital Expenditure, -1.7%, 0.5% f'cast, 2.0% prev, 1.3% rvsd
- New Zealand unveils spending boost in 'wellbeing' budget; cuts 2019 growth forecast
- Canada moves to ratify North American trade deal ahead of visit by U.S. vice president
Economic Data Ahead
- (1901 ET/2301 GMT) Great Britain May GfK Consumer Confidence, -12 f'cast, -13 prev
Key Events Ahead
- (0330 ET/0730 GMT) BoE's Dave Ramsden delivers speech at chamber of commerce in Inverness, Scotland
- (1200 ET/1600 GMT) Federal Reserve's Richard Clarida speaks at Economic Club of New York
- (1430 ET/1830 GMT) BoC's Carolyn Wilkins speaks at Calgary Chamber of Commerce
FX Beat
DXY: The dollar index held gains near a 1-week peak as the 10-year U.S. Treasury yield stood at 2.262 percent after falling to a 20-month low of 2.210 percent on Wednesday. The greenback against a basket of currencies traded flat at 98.15, having touched a high of 98.21 on Wednesday, its highest since May 23. FxWirePro's Hourly Dollar Strength Index stood at 45.67 (Neutral) by 0400 GMT.
EUR/USD: The euro steadied after falling for three straight sessions after the European Central Bank policymaker Olli Rehn stated that the central bank is ready to reintroduce monetary support measures if required. On Wednesday, the major slumped to a 1-week trough after the European Commission wrote to the Italian government asking it to explain the deterioration in the country's public finances. The European currency traded 0.1 percent up at 1.1138, having touched a high of 1.1215 on Monday, its highest since May 16. FxWirePro's Hourly Euro Strength Index stood at -122.23 (Highly Bearish) by 0400 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, ahead of the U.S. unemployment benefit claims, preliminary gross domestic product, wholesale inventories, good trade balance, flash personal consumption expenditures, pending home sales and Fed Clarida's speech. Immediate resistance is located at 1.1174 (5-DMA), a break above targets 1.1229 (Apr. 30 High). On the downside, support is seen at 1.1118 (April 25 Low), a break below could drag it below 1.1100.
USD/JPY: The dollar rose, extending previous session gains, as investors shifted their focus on U.S. second estimate of first-quarter gross domestic product growth figures and U.S. weekly jobless claims that could provide an indication about the state of the economy. The major was trading 0.1 percent up at 109.67, having hit a low of 109.14 on Wednesday, its lowest since May 14. FxWirePro's Hourly Yen Strength Index stood at -16.58 (Neutral) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, preliminary gross domestic product, wholesale inventories, good trade balance, flash personal consumption expenditures, pending home sales and Fed Clarida's speech. Immediate resistance is located at 109.96 (May 16 High), a break above targets 110.36 (May 23 High). On the downside, support is seen at 109.01 (May 13 Low), a break below could take it lower at 108.80 (Jan. 30 Low).
GBP/USD: Sterling eased, hovering towards a near 5-month low recorded last week, as a survey showed uncertainty over Britain's departure from the European Union has triggered a sharp drop in business confidence in Europe over the past six months. Moreover, concerns over who will succeed Prime Minister Theresa May further undermined the bid tone around the British pound. The major traded 0.05 percent down at 1.2630, having hit a low of 1.2605 last week; it’s lowest since Jan, 3. FxWirePro's Hourly Sterling Strength Index stood at -60.99 (Bearish) 0400 GMT. Investors’ attention will remain on the U.S. fundamental drivers, ahead of UK GfK Consumer Confidence. Immediate resistance is located at 1.2691 (10-DMA). a break above could take it near 1.2747 (May 27 High). On the downside, support is seen at 1.2581 (Jan. 2 Low), a break below targets 1.2529 (Dec. 18 Low). Against the euro, the pound was trading flat at 88.15 pence, having hit a low of 88.50 on Friday, it’s lowest since Jan. 21.
AUD/USD: The Australian dollar surged after data showed domestic building permits eased 4.7 percent in April after falling 13.4 in March. However, the upside was limited as investors priced in at least two cuts in interest rates this year from the Reserve Bank of Australia. The Aussie trades 0.2 percent up at 0.6931, having hit a high of 0.6938 on Monday, it’s highest since May 15. FxWirePro's Hourly Aussie Strength Index stood at 170.63 (Highly Bullish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6881 (May 24 Low), a break below targets 0.6846. On the upside, resistance is located at 0.6946 (May 15 High), a break above could take it near 0.6961 (Apr. 30 High).
NZD/USD: The New Zealand dollar rose, halting a 3-day losing streak as investors showed little initial reaction to a government budget that included a sharp downward revision to economic growth forecasts and promises of more public spending. The Kiwi trades 0.2 percent higher at 0.6523, having touched a high of 0.6559 on Monday, its highest level May 16. FxWirePro's Hourly Kiwi Strength Index was at 41.94 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6591 (May 14 High), a break above could take it near 0.6614 (May 10 High). On the downside, support is seen at 0.6474 (Oct. 4 Low), a break below could drag it below 0.6442 (Oct. 10 Low).
Equities Recap
Asian shares slumped as the prolonged trade war between Beijing and Washington stoked investors' concerns about the impact on global economic growth.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.1 percent
Tokyo's Nikkei eased 0.5 percent to 20,897.05 points, Australia's S&P/ASX 200 index declined 0.8 percent to 6,385.70 points and South Korea's KOSPI rose 0.3 percent to 2,030.84 points.
Shanghai composite index declined 0.9 percent to 2,889.56 points, while CSI 300 index traded 1.1 percent down at 3,623.86 points.
Hong Kong’s Hang Seng traded 0.6 percent lower at 27,088.52 points. Taiwan shares added 0.8 percent to 10,382.99 points
Commodities Recap
Crude oil prices steadied after an industry report showed a decline in U.S. crude inventories, however, signs of China's readiness to escalate a trade war with the United States have raised concerns about future demand. International benchmark Brent crude was trading 0.05 percent higher at $69.65 per barrel by 0418 GMT, having hit a high of $70.57 on Tuesday, its highest since May 23. U.S. West Texas Intermediate was trading 0.1 percent up at $59.14 a barrel, after falling as low as $56.87 on Wednesday, its lowest since the Mar. 12.
Gold prices declined as the greenback hovered near a 2-year high, amid escalating U.S.-China trade tensions that rekindled doubts about global economic growth. Spot gold was trading 0.2 percent down at $1,277.73 per ounce by 0435 GMT, having touched a high of $1,287.27 on Monday, its highest since May 17. U.S. gold futures edged 0.3 percent lower to $1,276.70 an ounce.
Treasuries Recap
The 10-year U.S. Treasury yield stood at 2.262 percent after falling to a 20-month low of 2.210 percent on Wednesday.
The Australian government bond futures slipped, with the three-year bond contract off 4 ticks at 98.870.
The Canadian government bond prices were higher across a flatter yield curve, with the two-year up 3 Canadian cents to yield 1.521 percent and the 10-year rising 16 Canadian cents to yield 1.558 percent.. The 10-year yield hit its lowest intraday since March 28 at 1.524 percent.
