Market Roundup
- UK’s May, Corbyn set out opposing EU 'no deal' stances
- PM May's Conservatives lead drop 6 pct, 43 pct vs Labour 37 pct -poll
- Japan urges China to play bigger role in restraining N. Korea
- N. Korea warns of 'bigger gift package' for U.S. after latest test
- Draghi says ECB stimulus still needed despite better growth
- Greece calls for debt relief deal in June, says lenders have no excuses
- Japan Apr retail sales +3.2% y/y, +2.3% eyed, Mar +2.1%, lge retailers +1.1%
- Japan Apr household spend +0.5% m/m, -1.4% y/y, +1.1%, -0.7% eyed, weak
- Japan Apr unemployment 2.8%, jobs-applicants ratio 1.48, 2.8%, 1.46 eyed
- Jobs availability best since 1974, retail sales good on China/Asia buys
- Japan Apr crude imports +10.8% y/y, LNG +3.0%, thermal coal +8.7%
- Australia Apr build approvals m/m, +4.4% vs forecast +3.0%; last -10.3%
- Australia Apr private house approvals, +0.5%; last -4.3%
- Australia unlikely to extend bond maturities beyond 30-year
- New Zealand building consents m/m, -7.6%, last -1.8%
Economic Data Ahead
- (0245 ET/0645 GMT) France Q1 GDP Detailed q/q, +0.3% eyed' last +0.3%
- (0245 ET/0645 GMT) France Apr Consumer Spending m/m, +0.7% eyed; last -0.4%
- (0245 ET/0645 GMT) France May Consumer Confidence, 101 eyed; last 100
- (0300 ET/0700 GMT) Spain May HICP Flash y/y, +2.0% eyed; last +2.6%
- (0400 ET/0900 GMT) Eurozone May Consumer Confid. Final, -3.3 eyed; last -3.3
- (0400 ET/0900 GMT) Eurozone May Industrial Sentiment, +3.2 eyed; last +2.6
- (0400 ET/0900 GMT) Eurozone May Business Climate, +1.11 eyed; last +1.09
- (0800 ET/1200 GMT) Germany May CPI Prelim, -0.1% m/m, +1.6% y/y eyed; last 0.0%, +2.0%
Key Events Ahead
- N/A Norges' Oystein Olsen speaks at a business seminar
- (0600 ET/1000 GMT) Italy 7YF E1.750 bln auction
- (0600 ET/1000 GMT) Italy 5Y E3.000 bln auction
- (0600 ET/1000 GMT) Italy 10Y E2.750 bln auction
- (0615 ET/1015 GMT) ECB's Liikanen speaks at the Austrian National Bank conference
- (1200 ET/1600 GMT) Austrian National Bank's Nowotny speaks about Marshall plan
FX Beat
DXY: The dollar gained versus the euro and sterling, supported by rising political uncertainties in the UK and eurozone. The greenback against a basket of currencies traded 0.1 percent up at 97.72, drifting away from a low of 96.80 hit last week, it’s lowest since Nov. 9. FxWirePro's Hourly Dollar Strength Index stood at 45.99 (Neutral) by 0500 GMT.
EUR/USD: The euro declined to an over 1-week low after German newspaper Bild stated that Greece threatened to opt out of next payment without bailout payment of EUR 7 billion if creditors cannot agree on debt relief. The European currency traded 0.3 percent down at 1.1129, having touched a low of 1.1220 earlier, its lowest since May 19. FxWirePro's Hourly Euro Strength Index stood at -117.55 (Highly Bearish) by 0400 GMT. Investors’ attention will remain on Eurozone's economic sentiment indicator and consumer confidence data, ahead of the U.S. personal consumption expenditures, personal spending and income figures for further momentum on the major. Immediate resistance is located at 1.1190 (5-DMA), a break above targets 1.1234 (May 26 High). On the downside, support is seen at 1.1103 (61.8% retracement of 1.0839 and 1.1267), a break below could drag it near 1.1041 (21-DMA).
USD/JPY: The dollar tumbled to a near 2-week low against the Japanese yen after data released earlier showed labor demand in Japan rose to its strongest in more than 40 years while the unemployment rate held steady at a two-decade low last month. Moreover, Greece threat to opt out of next payment without a debt deal if creditors cannot agree on debt relief triggered a risk-aversion wave which offered further support to the JPY bulls. The major traded 0.3 percent down at 110.89, having touched an early low of 110.77, its lowest since May 18. FxWirePro's Hourly Yen Strength Index stood at 49.84 (Neutral) by 0400 GMT. Investors’ will continue to track broad based market sentiment, head of the U.S. personal consumption expenditures, personal spending and income figures. Immediate resistance is located at 111.55 (10-DMA), a break above targets 112.11 (May 24 High). On the downside, support is seen at 110.68 (23.6% retracement of 110.23 and 112.11), a break below could take it near 110.23 (May 18 Low).
GBP/USD: Sterling eased, reversing most of its previous session losses, as British Prime Minister Theresa May's lead over the opposition Labour Party dropped to 6 percentage points in a poll published on Tuesday. Sterling trades 0.2 percent down at 1.2812, having hit a low of 1.2775 on Friday, its weakest since Apr. 25. FxWirePro's Hourly Sterling Strength Index stood at -46.90 (Neutral) by 0400 GMT. Investors’ will continue to track developments surrounding UK elections, ahead of the UK and U.S. economic data. Immediate resistance is located at 1.2832 (78.6% retracement of 1.3046 and 1.2774), a break above could take it over 1.2900. On the downside, support is seen at 1.2775 (May 26 Low), a break below targets 1.2750. Against the euro, the pound traded 0.1 percent up at 86.86 pence, having hit a fresh 2-1/2 month low of 87.50 on Friday.
AUD/USD: The Australian dollar declined to a 1-1/2 week low as continued weakness in the price of iron ore undermined the bid tone around the major. Markets seem to have ignored the release of better-than-expected Australian building consents data, which rose 4.4 percent in April, beating expectations of 3.0 percent. The Aussie trades 0.1 percent down at 0.7425, having hit a low of 0.7416 earlier, it’s weakest since May. 19. FxWirePro's Hourly Aussie Strength Index stood at -58.37 (Bearish) by 0500 GMT. Investors will continue to track sentiments around the commodity bloc, ahead of U.S. economic releases. Immediate support is seen at 0.7400 (38.2% retracement of 0.7328 and 0.7516), a break below targets 0.7372 (23.6% retrace). On the upside, resistance is located at 0.7463 (5-DMA), a break above could take it near 0.7500.
NZD/USD: The New Zealand dollar slumped from a two-month high touched in the prior session as investors braced for the Reserve Bank of New Zealand's half-yearly report on financial stability on Wednesday. The central bank is likely to flag ongoing risks in the housing sector, however, provide an improved outlook for the dairy sector. The Kiwi trades 0.1 percent down at 0.7043, having touched a peak of 0.7088 the prior session, its strongest since Mar. 2. FxWirePro's Hourly Kiwi Strength Index was at 74.07 (Bullish) by 0500 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7100, a break above could take it near 0.7150 (Mar. 2 High). On the downside, support is seen at 0.7029 (78.6% retracements of 0.6817 and 0.7088), a break below could drag it till 0.6984 (61.8% retrace).
Equities Recap
Asian markets tumbled, weighed down by concerns over a Greek bailout, early Italian elections, and comments by the European Central Bank chief about the need for continued stimulus.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3 percent.
Tokyo's Nikkei edged up 0.01 percent to 19,685.18 points, Australia's S&P/ASX 200 index gained 0.3 percent to 5,725.10 points and South Korea's KOSPI shed 0.4 percent to 2,342.18 points.
China, Hong Kong and Taiwan markets are closed for holidays.
Commodities Recap
Crude oil prices declined, extending prices for the second straight session as persistent concerns of oversupply outweighed signs of a strong start to the American summer driving season. International benchmark Brent crude was trading 0.1 percent down at $52.13 per barrel by 0409 GMT, having hit a low of $50.70 on Friday, its weakest since May 12. U.S. West Texas Intermediate fell 0.3 percent to $49.79 a barrel, after falling as low as $48.16 on Friday, its lowest since May 18.
Gold prices rose to a fresh 1-month high as easing Asian stock markets and geopolitical concerns boosted the metals safe-haven appeal. Spot gold rose 0.1 percent to $1,267.59 per ounce at 0413 GMT, having hit a peak of $1,270.35, its strongest since May 1. U.S. gold futures were flat at $1,267.80 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.246 percent lower by 0.009 bps, while 5-year yield was 0.008 bps down at 1.781 percent.
The Australian bonds rebounded as investors covered previous short positions after a long rally, following a silent trading session that witnessed data of less economic significance. The yield on the benchmark 10-year Treasury note slumped 2 basis points to 2.40 percent, the yield on 15-year note plunged 2-1/2 basis points to 2.79 percent and the yield on short-term 2-year also traded 2 basis points lower at 1.57 percent.
The New Zealand bonds gained as investors wait to watch the Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler’s speech, scheduled to be held on May 31 amid a muted trading session. At the time of closing, the yield on the benchmark 10-year bond fell 1 basis point to 2.84 percent, the yield on 7-year note also slipped 1 basis point to 2.72 percent and the yield on the short-term 2-year note too ended 1 basis point lower at 1.96 percent.
The Canadian government bond prices were higher across a flatter maturity curve, with the two-year price down 1 Canadian cent to yield 0.708 percent and the 10-year rising 28 Canadian cents to yield 1.412 percent.
