Market Briefs
- GBP/JPY puts on 1.10% to 156.19: Talk of order flow.
- USD/JPY +0.71%, GBP/USD + 0.25%, EUR/USD -0.05%.
- DXY -0.08%, DAX +1.92%, Brent +1.76%, Iron -5.95%.
- Germany Mar Industrial Orders 1.9% m/m vs -0.8% revised previous, =0.7% expected.
- Swiss Apr CPI -0.4% y/y vs -0.9% previous, +0.1% expected.
- UK Apr Halifax House Prices -0.8% m/m vs +2.6% previous, -0.4% expected.
- EZ May Sentix 6.2 vs 5.7 previous, 6.1 expected.
- Fed’s Evans- Wait and see monetary stance is appropriate.
- UK YouGov pol for the Times- In-42%, Out-40%.
- Carney prepares for rate cut if Britain quits- Sunday Times.
- Reuters Survey – Wall Street gives up on June Fed rate hike post-payrolls.
- CFTC IMM CTA data - Spec bearish USD bets highest since Feb ’1.
- BoJ Iwata: US Treasury report does not constrain BoJ’s monetary policy.
- Japan FinMin Aso ready to intervene unilaterally on rapid one-sided moves.
- BoJ March Policy Board minutes – Some concerns over consumer sentiment.
- BoJ inflation trend improving but CPI coming in lower than expected.
- German “doom loop” cure could be worse than banks’ disease.
- China FX trading moves into shadows as Beijing tightens screws.
- AU PM dissolves parliament, calls July 2 poll amid slowdown, instability.
Economic Data Preview
- (0815 ET/1215 GMT) A report from the Canadian Mortgage and Housing Corp is likely to show that the seasonally adjusted annualized rate of housing starts fell to 191,500 units in April from 204,251 in March.
- (0900 ET/1300 GMT) Mexico is scheduled to release its data on annual inflation rate in April. Inflation eased in March, remaining below the central bank's 3 percent target and giving policymakers room to keep interest rates on hold.
- (1000 ET/1400 GMT) The Fed is set to release its Labor Market Conditions Index for April, it was down to 2.1 in March.
Key Events
- (1300 ET/1700 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari is scheduled to speak before the Economic Club of Minnesota.
- (1800 ET/2200 GMT) The Federal Reserve Bank of San Francisco President John Williams will be participating in a Q&A "Writing Session" on the website Quora.com.
- (1430 ET/1830 GMT) FedTrade Ops 15-yr F.Mae/Fr.Mac max $600 mln.
- Euro zone finance ministers will discuss progress in reaching an agreement with Greece on what reforms the country has to legislate to ensure it meets agreed bailout targets in 2018. The discussions may include talks on Greece debt relief, but a deal on both issues is unlikely.
Equities Recap
The global stocks were trading mixed on Monday, Japan's Nikkei recorded a modest gains on the yen's dip, while a strong German industrial orders drove European shares higher from their worst week since mid-February.
The Britain's FTSE 100 rose 48.30 points, or 0.77 percent at 6,173.00 at 0910 GMT, after falling 1.9 percent last week, the biggest weekly drop since February. The pan-European FTSE 300 index, Germany's DAX and France's CAC all rose by more than 1 percent.
The Tokyo's Nikkei closed up 0.68 pct at 16,216.03, Australia's S&P/ASX 200 Index ended up 0.31 pct at 5,308.50 points. China's CSI300 Index lost 2.1 pct at 3,065.62 points, Shanghai Composite Index finished the day down 2.8 pct at 2,832.11 points and HK’s Hang Seng Index gained 0.2 pct at 20,156.81 points.
Commodities Recap
Oil jumped on Monday as Canada's wildfire hit over a million barrels in daily production capacity, but investors' caution prevented a return to late April's 2016 price highs. U.S. crude futures climbed 91 cents to $45.57 a barrel by 0910 GMT, up for a fourth day in a row, while Brent crude futures rose 72 cents to $46.02 a barrel.
Gold dropped 1 percent on Monday as a stronger dollar drove some investors to book profits after the metal's rally back towards $1,300 an ounce in the previous session, after the weaker than expected U.S. jobs report. Spot gold was down 1 percent at $1,275.81 an ounce at 0944 GMT, while U.S. gold futures for June delivery were down $16.00 an ounce at $1,278.00.
Treasuries Recap
The U.S. Treasuries were trading nearly flat amid subdued trade with investors seeking riskier assets. The yield on the benchmark 10-year bonds, which moves inversely to its price stood unchanged at 1.777 pct. Markets now look ahead to a lighter flow of data this week, highlighted by retail sales, producer prices, business inventories and University of Michigan consumer sentiment releases on Friday. Additionally, markets receive 3-Year Note, 10-Year Note and 30-Year Bond auctions on Tuesday, Wednesday and Thursday, respectively.
The European bonds gained as the recent polls showed the outcome of the referendum is too close to call, raising the possibility that Britain might leave the EU after 43 years of membership in the bloc. The benchmark German 10-year bonds yield fell 1bps 0.139 pct, French 10-year bunds yield dipped 2bps to 0.508 pct, Italian equivalents tumbled 3bps to 1.462 pct, Spanish 10-year bonds yield inched lower 2bps to 1.562 pct, Portuguese 10-year bonds yield fell 3bps to 3.295 pct, Netherlands 10-year bonds yield dipped 1bp to 0.375 pct and UK10-year gilts yield edged down 1bp to 1.413 pct by 1100 GMT.
The Greek government bonds rallied after policymakers in Athens adopted a new austerity measures on Sunday. The yield on the benchmark 10-year bonds fell 15bps to 8.424 pct.
The Japanese government bonds were trading mixed as markets receive no more important data this week. Moreover, bond prices are likely to be ruled by the movements in the crude oil market. The yield on the benchmark 10-year bonds rose 1bp to -0.101 pct.
The Australian government bonds were trading modestly lower after the data showed mixed bag of U.S. employment figures on Friday. Also, firm equities and rallying oil prices drove out investors from safe haven assets. The yield on the benchmark 10-year Treasury note climbed 4bps to 2.335 pct.
FX Beat
USD: The dollar was trading at a 10-day high against the yen after Japan's finance minister warned on intervention if the currency moves were volatile enough to hurt the country's trade and economy. It was up almost half a percent in morning trade in London at 107.60 yen and the dollar index inched up 0.21 percent to an 11-day high of 94.087.
USD/JPY: The Japanese yen fell a 10-day low against the dollar after Japan's finance minister said he was ready to intervene in the FX market if needed, and as stronger risk appetite drained the demand for traditional safe havens. The yen hit an 18-month high against the dollar last week, having gained around 15 percent in the past six months. The pair has slightly jumped 1 pct Monday till 108.13 at the time of writing. The short term trend is slightly bullish as long as support 106.40 holds. On the lower side any break below 106.40 will drag it down till 105.80/105.20. The minor support is around 107.50/106.80 and the major resistance is around 108 and break above targets 108.50/109.35.
EUR/USD: The euro is trading flat after making a high of 1.14770. It was trading around 1.13885 at the time of writing. The short term trend is slightly weak as long as resistance 1.1530 (May 4th high) holds. On the higher side any break above 1.1530 will take the pair to next level till $1.1600/1.1620 level. The minor support is around 1.1380 and break below will target 1.1340/1.1270/1.1200. The overall bearish invalidation is above 1.16200 level.
GBP/USD: The Sterling dropped to a 2-week low against the dollar, as an opinion poll showed the race between those wanting to stay in the European Union and those wanting to leave is still on a knife edge. A YouGov opinion poll for ITV television showed the "In" campaign leading by 42 percent to 40 percent for the "Out" camp. It pared early losses and jumped 0.20 pct after declining till 1.43748 and well below a 4-month high of $1.4770 struck last Tuesday. The intraday trend is weak as long as resistance 1.4550 holds. Any break below 1.4370 will drag the pair down till 1.4320/1.4280/1.4240 level. On the higher side minor resistance is around 1.4480 and break above targets 1.4550/1.4600. The euro was trading up 0.1 percent at 79.165 pence.
USD/CHF: The pair has slightly declined after making a high of 0.97359. It was trading around 0.96957 at the time of writing. The short term trend is slightly bullish as long as support 0.9630 holds. Any violation above 0.9800 will confirm minor bullishness, a jump till 0.9850/0.9900 is possible. On the lower side any break below 0.9630 will drag the pair down till 0.9575/0.9500.
AUD/USD: The Australian dollar has continued its weakness and declined 0.21 pct on the day after making a high of 0.7478 on Friday. It was trading around 0.73451 at the time of writing. The short term trend is slightly bearish as long as resistance 0.7520 holds. On the higher side major resistance is around 0.7520 and break above targets 0.7600/0.7630. The minor resistance is around 0.7450/0.7480 and major support is around 0.7350 and break below will drag the pair till 0.730/0.7256. In the short-term, dealers expect the Aussie to pause between $0.7250 and $0.7550, before heading south to $0.7065.
NZD/USD: The New Zealand dollar edged higher $0.6845, from a 4-week low of $0.6807 touched last week. It slipped 2 percent last week, its second-largest drop this year, after the RBA's easing reinforced expectations of a similar move by the RBNZ.
