Market Roundup
- BOJ reduces purchase of 3-5 year jgbs to 300 bln yen from 320 bln yen in previous operation.
- U.S. congressional negotiators reach deal to fund government through September, according to congressional aides.
- U.S. congress negotiators reach deal to fund government through September 30; full house and senate still must approve -senior congressional aide.
- Puerto Rico financial oversight board approves liquidation plan for island's government development bank.
- European commission proposes to extend by three years the exemption of pension funds from mandatory clearing of derivatives trades - eu document.
- South Korea exports to china in April +10.2 pct y/y -Trade ministry.
- South Korea April exports to U.S. +3.9 pct y/y, European union +64.9 pct y/y -Trade ministry.
- South Korea April trade surplus with United States $+1.68 bln vs $2.52 bln in april 2016 -Trade ministry.
- Peru consumer price index falls 0.26 pct in april, annual inflation rate slips to 3.69 pct.
- Macau says April gambling revenue up 16.3 pct from a year earlier to 20.2 bln patacas.
- Thailand’s April headline CPI +0.38 pct on year (vs +0.71 pct in poll).
- Thailand’s April core CPI +0.50 pct on year (vs +0.54 pct in poll).
Economic Data Ahead
- (0830 ET/1230 GMT) U.S. personal consumption real.
- (0830 ET/1230 GMT) U.S. personal income.
- (0830 ET/1230 GMT) U.S. core PCE price index.
- (0930 ET/1330 GMT) Canada manufacturing PMI.
- (0945 ET/1345 GMT) U.S. market manufacturing PMI final.
- (1000 ET/1400 GMT) U.S. construction spending.
- (1000 ET/1400 GMT) U.S. ISM manufacturing PMI.
Key Events Ahead
- (0745 ET/1145 GMT) U.S. Treasury Sec Mnuchin speaks.
FX Recap
USD: The dollar index, which tracks the greenback against a basket of six rival currencies, edged up 0.1 percent to 99.144.
EUR/USD: The euro was steady on the day at $1.0894 underpinned by solid euro zone inflation figures on Friday that analysts said could prompt the European Central Bank to take a more hawkish tone in its June statements. Official flash estimates put euro zone inflation at 1.9 percent in the first quarter, above estimates of 1.8 percent. The ECB's target is below but close to 2 percent.
USD/JPY: The Japanese yen falls marginally against U.S. dollar. Pair made intraday high at 111.74 and low at 111.20 levels. A sustained close above 111.51 is required to take the parity higher towards 112.19, 113.72, 115.37 and 117.42 marks. Alternatively, a daily close below 111.51 will drag the parity down towards 108.13 levels. Japan’s April Nikkei manufacturing PMI decreases to 52.7 vs previous 52.8.
GBP/USD: The sterling climbed to its highest at $1.2965 against the dollar since late September on Friday, brushing off data showing a sharp slowdown in UK economic growth as traders closed off heavy bets against the pound ahead of a long Bank Holiday weekend. The pair was currently trading around $1.2907 mark.
AUD/USD: The Australian dollar eased to $0.7477, from $0.7490 on Friday, having touched $0.7440 last week, it’s lowest since mid-January. It posted a loss of 1.8 percent in April, the largest monthly loss this year.
NZD/USD: The New Zealand dollar drifted lower to $0.6857, from $0.6870 late on Friday. Immediate support and resistance were seen at $0.6848 and $0.6890 marks respectively.
Equities Recap
Japan’s Nikkei was trading around 0.46 percent higher at 19,284 points.
Australia’s S&P ASX200 was trading 0.34 percent higher at 5,944 points.
All the other Asian markets will be closed in observance of Labor Day.
Commodities Recap
Oil prices edged lower on Monday, undermined by a weak manufacturers survey out of China, and despite talk that OPEC-led crude oil output cuts could be extended when oil producers meet later this month. NYMEX crude for June delivery was down 10 cents at $49.23 a barrel by 0204 GMT. London Brent crude for new front-month delivery in July was down 13 cents at $51.92.
Gold fell on Monday after the dollar edged up as U.S. congressional negotiators hammered out a deal on a spending package to keep the federal government funded through September. Spot gold dropped 0.3 percent to $1,264.06 per ounce, as of 0236 GMT. Gold, last week, saw its biggest weekly percentage fall since the week of March 10, ending about 1.2 percent lower. U.S. gold futures eased 0.2 percent to $1,265.20 an ounce.
Treasuries Recap
New Zealand government bonds gained, sending yields 3.5 basis points lower at the long end of the curve.
Australian government bond futures were subdued, with the three-year bond contract steady at 98.170. The 10-year contract eased half a tick to 97.3900, while the 20-year contract shed two ticks to 96.8050.
