Market Roundup
- Australia Q1 GDP SA q/q, +0.3% vs f'cast +0.2%, last 1.1%
- Australia Q1 GDP SA y/y, +1.7% vs f'cast +1.5%, last 2.4%
- Australian investors shun bond buy-backs as U.S. investors snap them
- Japan to promote direct JPY-Asian currency exchanges – Nikkei
- Japan end-May foreign reserves Y1.2518 tln, end-Apr Y1.2423 tln
- China banks hike deposit rates, WMP yields to secure funding - MNS
- China fixes yuan midpoint at 6.7858/dlr, strongest level since Nov 9
- New Zealand Q1 mfg sales q/q -0.3%, last -1.8%
- RBNZ renews policy deal with govt, inflation goal unchanged
- Trump takes sides in Arab rift, suggests support for isolation of Qatar
Economic Data Ahead
- (0300 ET/0700 GMT) Spain Apr Ind Output Cal Adj y/y, +1.2% eyed; last +0.4%
- (0400 ET/0800 GMT) Italy Apr Retail Sales NSA y/y, last -0.4%
- (0400 ET/0800 GMT) Italy Apr Retail Sales SA m/m, last +0.0%
- (0500 ET/0900 GMT) Eurozone Q1 GDP Revised, +1.7% y/y, +0.5% q/q eyed; last +1.7%, +0.5%
Key Events Ahead
- N/A G20 leaders meet for International summit in Hamburg (to June 8)
- N/A Riksbank's Skingsley participates in a conference arranged by the OECD
- N/A ESM (Aa1/-/AAA) tap of EUR3.5bn 1.8% Nov 2046 via DB, MS, Natixis
- N/A IT EUR bmk 30yr 144A/RegS. Baa2/BBB-/BBB/BBBH
- (0630 ET/1030 GMT) Germany 5Y 3.000 bln auction
FX Beat
DXY: The dollar rebounded from multi-week lows versus the euro and yen following a mild recovery in the U.S. Treasury yields. The greenback against a basket of currencies traded 0.1 percent up at 96.63, having touched a low of 96.52 the prior session, it’s lowest since Nov. 9. FxWirePro's Hourly Dollar Strength Index stood at -72.62 (Bearish) by 0500 GMT.
EUR/USD: The euro edged down, hovering away from a seven-month high touched last week as investors remained cautious ahead of the European Central Bank's policy meeting on Thursday. The ECB is unlikely to shift rates or make changes to its quantitative easing scheme this week, however, investors will scrutinize President Mario Draghi's statements for his view on the euro zone economy. The European currency traded 0.1 percent down at 1.1263, having touched a high of 1.1285 on Friday, its highest since Nov 9. FxWirePro's Hourly Euro Strength Index stood at -7.68 (Neutral) by 0400 GMT. Investors’ attention will remain on the U.S. economic optimism index and consumer credit change figures, as the Eurozone's economic calendar remains absolutely data empty. Immediate resistance is located at 1.1285 (June 2 High), a break above targets 1.1300. On the downside, support is seen at 1.1248 (78.6% retracement of 1.1109 and 1.1285), a break below could drag it near 1.1221 (10 DMA).
USD/JPY: The dollar attempted a minor recovery after falling to a near 2-month low in the previous session as renewed upside gaining momentum in oil prices and treasury yields boosted the bid tone around the major. However, Britain's general election, a European Central Bank policy decision and testimony by former FBI Director James Comey limited the upside. The major traded 0.2 percent up at 109.60, having touched a low of 109.22 on Tuesday, its lowest since Apr. 21. FxWirePro's Hourly Yen Strength Index stood at 36.45 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. economic optimism index and consumer credit change figures. Immediate resistance is located at 109.83 (78.6% retracement of 112.12 and 109.22), a break above targets 110.48 (10-DMA). On the downside, support is seen at 108.88 (Apr. 21 Low), a break below could take it near 108.50.
GBP/USD: Sterling eased, halting its 3-day winning streak as the greenback recovered from recent lows amid a recovery in the U.S. yields across the curve. Latest poll on the UK election showed Conservatives are leading against opposition Labour party, however, the PM May’s Conservatives Party is likely to fall short of a majority, which could result in a hung parliament. Sterling traded down at 1.2907, hovering away from a high of 1.2949 hit in the previous session, its strongest since May 25. FxWirePro's Hourly Sterling Strength Index stood at -57.27 (Bearish) by 0500 GMT. Investors’ will continue to track developments surrounding UK elections, amid a lack of relevant economic releases from both the UK and U.S., except for the UK Halifax HPI m/m data. Immediate resistance is located at 1.2946 (May 26 High), a break above could take it near 1.3000. On the downside, support is seen at 1.2880 (61.8 retracement of 1.2769 and 1.2949), a break below targets 1.2800. Against the euro, the pound traded up at 87.28 pence, recovering from a near 3-month low of 87.67 hit on Monday.
AUD/USD: The Australian dollar rallied to a fresh 1-month high on the back of a better-than-expected Australia first quarter annualized GDP figure. The economy's gross domestic product grew 0.3 percent in the first quarter, while it rose 1.7 percent for the year, beating estimates of 1.6 percent. The Aussie trades 0.4 percent up at 0.7538, having hit a high of 0.7543 earlier, it’s strongest since May 3. FxWirePro's Hourly Aussie Strength Index stood at 104.11 (Highly Bullish) by 0500 GMT. Investors will continue to digest upbeat domestic GDP report, ahead of U.S. economic releases. Immediate support is seen at 0.7457 (Session Low), a break below targets 0.7439 (5-DMA). On the upside, resistance is located at 0.7507 (May 24 High), a break above could take it near 0.7540 (May 1 High).
NZD/USD: The New Zealand dollar slightly edged down, but remained close to a near three-month high underpinned by a solid rebound staged by oil prices. The major weakened after the latest dairy auction results from Fonterra showed a fall in the milk prices to 0.6 percent from 3.2 percent seen previously. The Kiwi trades 0.1 percent down at 0.7176, having touched a peak of 0.7205 the day before, its strongest level since Feb. 28. FxWirePro's Hourly Kiwi Strength Index was at 74.71 (Bullish) by 0500 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7205 (Previous Session High), a break above could take it near 0.7246 (Feb. 23 High). On the downside, support is seen at 0.7158 (78.6% retracements of 0.6988 and 0.7205), a break below could drag it till 0.7122 (5-DMA).
Equities Recap
Asian shares gained but investors remained cautious ahead of British elections, a European Central Bank policy meeting where policymakers are likely to take a less dovish stance, and former FBI director James Comey's Senate testimony.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent
Tokyo's Nikkei advanced 0.03 percent to 19,986.65 points, Australia's S&P/ASX 200 index surged 0.1 percent to 5,672.50 points and South Korea's KOSPI eased 0.1 percent to 2,365.09 points.
Shanghai composite index gained 1.01 percent to 3,133.51 points, while CSI300 index was trading 1.02 percent up at 3,528.09 points.
Hong Kong’s Hang Seng was trading 0.1 percent lower at 25,956.11 points. Taiwan shares added 0.04 percent to 10,209.99 points.
Commodities Recap
Crude oil prices rose, extending previous session gains as rising tension in the Middle East and falling U.S. inventories supported prices, although global fuel markets remained oversupplied. International benchmark Brent crude was trading 0.2 percent up at $50.05 per barrel by 0427 GMT, having hit a low of $48.99 last week, its weakest since May 10. U.S. West Texas Intermediate traded 0.3 percent up at $48.10 a barrel, after falling as low as $46.77on Friday, its lowest since May 10.
Gold prices slightly edged down after rising to its highest in seven months, supported by key political and economic events that are likely to boost the metal's safe-haven appeal. Spot gold trading 0.1 percent down at $1,291.13 per ounce at 0434 GMT, having gained 1.1 percent to hit peak of $1,295.89 an ounce, its strongest since Nov. 9. U.S. gold futures for August delivery dipped 0.2 percent to $1,295.6 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.155 percent higher by 0.008 bps, while 5-year yield was 0.013 bps up at 1.725 percent.
The Australian bonds slid after reading a higher-than-expected gross domestic product for the first quarter of this year, released earlier today. The yield on the benchmark 10-year Treasury note rose nearly 1 basis point to 2.39 percent, the yield on 15-year note traded flat at 2.77 percent while the yield on short-term 2-year traded 2-1/2 basis points higher at 1.62 percent.
The New Zealand closed on the upside after dairy prices eased at the country’s latest GlobalDairyTrade (GDT) price auction, held earlier today. However, prices rose for the sixth consecutive time, albeit at a moderate pace. At the time of closing, the yield on the benchmark 10-year bond slumped 2-1/2 basis points to 2.72 percent, the yield on 7-year note also plunged 2-1/2 basis points to 2.62 percent and the yield on short-term 2-year note ended 1-1/2 basis points lower at 1.92 percent.
The Canadian government bond prices were higher across most of a flatter yield curve in sympathy with U.S. Treasuries. The 10-year rose 18 Canadian cents to yield 1.393 percent, having touched its lowest intraday since Nov. 10 at 1.373 percent.
