Market Roundup
- Japan’s SoftBank to buy ARM Holdings for GBP24.3bln
- Announcement of Softbank Deal to Buy ARM could come as early as Monday - Source
- PBOC sets Yuan Mid-Point at 6.6961 / dollar Vs Last Close 6.6883
- China June Beijing New Home Prices +20.3% Y/Y (May +19.5%)
- China June Shanghai New Home Prices +27.7% Y/Y (May +27.7%)
- All China June New Home Prices +7.3% Y/Y (May +6.9%) - Reuters Calculation
- Singapore June Non-Oil Domestic Exports -2.3% Y/Y (Reuters Poll -3.0%)
- Singapore June Non-Oil Domestic Exports -12.9% M/M S/Adj (Reuters Poll -10.3%)
- Singapore June Domestic Exports of Electronics -1.7% Y/Y
- Singapore June Nodx to United States +5.9% Y/Y Vs May +9.1% Y/Y
- Singapore June Nodx to China -9.9% Y/Y Vs May -10.1% Y/Y
- Singapore June Nodx to Europe -5.8% Y/Y Vs May -14.0% Y/Y
- UK Retail Footfall -2.8% yy in June, Biggest Drop since Feb 2014 - BRC
- UK Retail Footfall -4.6% yy in Week of June 23 EU Vote, -3.4% yy in Week After
- New Zealand Q2 Consumer Price Index +0.4% Vs previous Qtr (Reuters Poll +0.5%)
- New Zealand Q2 Consumer Price Index +0.4% Vs Year Ago (Reuters Poll +0.5%)
- New Zealand Q2 Consumer Price Index Non-Tradables +0.3% Vs previous Qtr
- New Zealand Q2 Consumer Price Index Non-Tradables +1.8% Vs Yr Ago
- Bank of England's Vlieghe Says there should be an Immediate Interest Rate Cut
- BOE's Vlieghe sees Period of Lower Growth in UK and Higher Inflation
- BOE's Vlieghe says was clear to him this month that BOE could not return Inflation to Target Sustainably without more Monetary Policy Action
- BOE's Vlieghe says Favoured Immediate Rate Cut, Supplanted by Further Measures in August – FT
- Turkish Cenbank says Will Provide Unlimited Liquidity to Banks
- Turkish C/Bank: Commission on Daily Liquidity Options for Banks Will be Zero
- Turkish Cenbank: Will Closely Monitor Depth of Market and Price Developments
- Turkish Cenbank: Will Take All Necessary Measures to Protect Financial Stability if Necessary
- Turkish Cbank: If need be, May Increase Current Limit of Forex Depot of $50bln
- Turkish Cbank: All Central Bank Markets and Systems will remain open until transactions complete
Economic Data Ahead
No Significant Data Release
Key Events Ahead
- (0600 ET/1000 GMT) Belgium 10Y E1.500B 1.000% 22/06/26 . EUR2.8-
- (0600 ET/1000 GMT) Belgium 15Y E0.750B 1.000% 22/06/31 . EUR3.5BN
- (0600 ET/1000 GMT) Belgium 22Y E0.750B 1.900% 22/06/38 . TOTAL
- (0600 ET/1000 GMT) Belgium 31Y E0.500B 1.600% 22/06/47 .
FX Beat
DXY: The dollar index, against a basket of currencies trades0.2 percent lower at 96.50, after rising to a high of 96.73 on Friday, following upbeat U.S. retail sales data release.
EUR/USD: The euro edged up after declining to 1.1024 from a high of 1.1148 on Friday. The major came under renewed selling pressure after U.S. Retail Sales surprised investors to the upside, rising 0.6 percent in June against consensus of 0.1 and previous 0.2 percent. Retail Sales excluding auto sector rose 0.7 percent versus forecast and prior 0.4 percent. The European currency opened higher on a bullish gap and trades 0.3 percent up at 1.1063. The movements in the pair will be driven by developments surrounding geopolitical uncertainty in Turkey, amid lack of macro-economic data from both the continents. Immediate resistance is located at 1.1100, break above targets 1.1115/1.1150. On the lower side, support is seen at 1.1024 (Previous Session Low), break below could drag the pair lower 1.1000 level.
USD/JPY: The greenback edged up, but failed to extend gains above the 106 handle on expectations of Abenomics 2.0, with new monetary and fiscal stimulus. On Friday, the major retreated from a high of 106.31, erasing most of its gains to close lower at 104.80, despite upbeat U.S. data and Fed's Lockhart reiterating that he could see 1-2 rate hikes this year. The dollar trades at 105.61, attempting a recovery to sustain gains above 105 handle. Trading is subdued as Japan's financial markets are closed in observance of Marine Day. Immediate resistance is located at 106.31 (Previous Session High), break above could take the pair to 106.81/107.00. On the lower side, support is seen at 104.95 (5-DMA), break below could drag it lower 104.60.
GBP/USD: Sterling steadied after declining on the back of upbeat U.S. data, which strengthened the greenback across the board and the Bank of England's chief economist Haldane's comments on Friday. It weakened from a 2-week high of 1.3480 after the speech, which spurred speculations of the potential monetary policy easing measures likely to be announced at the meeting next month. Markets attention now remains on BoE MPC member Dr Martin Weale's speech for further cues on the monetary policy. Sterling trades 0.5 percent higher at 1.3235, attempting to sustain gains above 1.3200 handle. Immediate resistance is located at 1.3400, break above targets 1.3480/1.3600. On the lower side, support is seen at 1.3091. Against the euro, the pound trades flat at 83.60 pence.
AUD/USD: The Australian dollar opened up on a bullish gap after slumping from a 10-week high following upbeat U.S. retail sales. On Friday, the major rose to a high of 0.7676 largely driven by better-than-expected Chinese GDP and industrial production data, however, it breached below 0.7600 handle, after U.S data release. The Aussie trades flat at 0.7594, having touched an early low of 0.7575. Investors now await Reserve Bank of Australia's July policy meeting minutes due on Tuesday. Immediate support is seen at 0.7558 (10-DMA), break below could take it near 0.7521. On the higher side, resistance is located at 0.7638, break above targets 0.7676.
NZD/USD: The New Zealand dollar slumped for a fourth consecutive session, breaching below 0.7100 handle as unexpected soft inflation figures led the market to price in higher chances of an interest rate cut next month. New Zealand's consumer price index rose an annual 0.4 percent in the second quarter, missing forecasts of 0.5 percent. Traders now expect the Reserve Bank of New Zealand to cut cash rates by 25 basis points to 2.0 percent at its next policy meeting. The Kiwi trades 0.3 percent lower at 0.7095, after declining to an early low of 0.7068 and away from a peak of 0.7324 touched last week. Investors will closely watch the central bank's economic update on Thursday for clues to its August cash decision. Immediate support is seen at 0.7057 (Jun-30 Low), break below could take it near 0.7000 handle. On the higher side, resistance is located at 0.7166 (20-DMA), break above targets 0.7200 handle.
Equities Recap
Asian shares gained as investors rushed towards risk-assets following a failed coup in Turkey, supported by a takeover bid in the tech sector and expectations of central bank stimulus.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1 percent having neared its highest in almost nine months last week.
Australia's S&P/ASX 200 index rose 0.58 pct at 5,461.30 points and Seoul shares edged up 0.10 pct.
Shanghai composite index trades 0.1 percent lower at 3,050.55 points, while CSI300 index was lower at 3,271.72 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 21,727.84 points. Taiwan shares gained 0.7 pct at 9,008.21 points.
Commodities Recap
Crude oil prices declined as a stronger dollar weighed on prices, however, losses were capped with traders shrugging off the impact of Friday's attempted coup in Turkey. Brent crude futures declined 0.5 percent to $47.63 a barrel at 0620 GMT after having gained nearly 2 percent last week. U.S. crude futures dropped 0.6 percent to $45.99 a barrel after rising more than 1 percent last week.
Gold edged lower, after recording its first weekly decline since May last week, following a failed attempt to seize power in Turkey. Spot gold dropped 0.6 percent to $1,329.26 per ounce by 0618 GMT, after declining over 2 percent last week, its first weekly decline in seven weeks. U.S. gold was up 0.3 percent to $1,331.90 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 1.5578 percent down by 0.036 bps, while 5-year was 0.033 bps lower at 1.1120 percent.
The Australian government bonds plunged, following stronger-than-expected U.S. retail sales data for June, coupled with maintained improvement in consumer inflation. The yield on the benchmark 10-year Treasury note rose nearly 3 basis points to 2.005 percent and the yield on short-term 2-year note hovered around 1.640 percent.
The New Zealand government bonds closed higher after data showed that the second quarter consumer inflation rose lower-than-expected, creating pressure on central bank for a further policy easing in the upcoming policy meeting. The yield on benchmark 10-year bond, fell 1 basis point to 2.355 percent, yield on 7-year note also dipped 1 basis point to 2.085 percent and the yield on short-term 2-year note ended 1 basis point lower at 1.975 percent.
