Market Roundup
- EUR/USD 0.73%, USD/JPY 0.16%, GBP/USD 0.55%, EUR/GBP 0.18%
- DXY -0.64%, DAX 1.29%, FTSE 0.92%, Brent 1.76%, Gold 0.28%
- Great Britain Q1 GDP QQ, 0.2%, 0.1% forecast, 0.1% previous
- Great Britain Q1 GDP YY, 1.2%, 1.2% forecast, 1.2% previous
- Great Britain Q1 Business Invest QQ, -0.4%, -0.2% previous
- Great Britain Q1 Business Invest YY, 2.0%, 2.0% previous
- Great Britain Q1 Current Account GBP, -17.72 bln, -18.00 bln forecast, -18.44 bln previous
- EZ Jun HICP Flash YY, 2.0%, 2.0% forecast, 1.9% previous
- EZ Jun HICP ex F&E Flash YY, 1.2%, 1.3% forecast, 1.3% previous
- Germany May Import Prices YY, 3.2%, 2.7% forecast, 0.6% previous
- Germany May Retail Sales YY Real, -1.6%, 1.8% forecast, 1.2% previous
- Germany Jun Unemployment Chg SA, -15k, -8k forecast, -11k previous
- Germany Jun Unemployment Rate SA, 5.2%, 5.2% forecast, 5.2% previous
- France May Consumer Spending MM, 0.9%, 0.8% forecast, -1.5% previous
- France Jun CPI (EU Norm) Prelim YY, 2.4%, 2.4% forecast, 2.3% previous
- France May Producer Prices MM, 0.6%, -0.6% previous
- ECB mulls small "Twist" to keep borrowing costs low -sources
- Challenges remain to Greece's long-term debt sustainability -IMF
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department releases personal income figures for May, which is expected to rise 0.4 percent, having gained 0.3 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of May. The index is expected to increase 0.2 percent after posting a similar gain in April, while core PCE is likely to have increased 1.9 percent in the 12 months through May after rising 1.8 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Personal spending is likely to rise 0.4 percent in the month of May, after surging 0.6 percent in April.
- (0830 ET/1230 GMT) The Statistics Canada releases its Raw Material Price Index for the month of May. The index posted a rise of 0.7 percent in April.
- (0830 ET/1230 GMT) Canadian producer prices are expected to have edged up 0.9 percent in May after rising 0.5 percent in the prior month.
- (0830 ET/1230 GMT) Canada's gross domestic product is likely to have flattened in April, after posting a growth of 0.3 percent in March.
- (0945 ET/1345 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions eased to 60.0 in June from 62.7 last month.
- (1000 ET/1400 GMT) The University of Michigan is expected to report that the consumer sentiment index eased to 99.2 in June from a final reading of 99.3 in May.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- N/A ECB's Draghi participates in European Council meeting in Brussels
FX Beat
DXY: The dollar index declined amid the ongoing trade war between the U.S. and China. The greenback against a basket of currencies trades 0.6 percent down at 94.79, having touched a high of 95.53 in the prior session, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at 85.25 (Slightly Bullish) by 1100 GMT.
EUR/USD: The euro rose, extending previous session gains after Eurozone inflation hit 2 percent for the first time in more than a year in June due to surging energy and food costs. The economy's inflation rose to 2.0 percent from 1.9 percent in May, in line with market expectations. The European currency traded 0.7 percent up at 1.1647, having touched a high of 1.1719 on Tuesday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 70.88 (Slightly Bullish) by 1100 GMT. Immediate resistance is located at 1.1700, a break above targets 1.1744 (June 4 High). On the downside, support is seen at 1.1530 (June 19 Low), a break below could drag it till 1.1500.
USD/JPY: The dollar rallied to a 2-week peak against the Japanese yen, after data showed Japan's industrial output declined far less than expected last month and the jobless rate hit its lowest in over 25 years. The major was trading 0.1 percent up at 110.63, having hit a high of 110.78 earlier, its highest since June 15. FxWirePro's Hourly Yen Strength Index stood at -44.03 (Neutral) by 1100 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. personal consumption expenditures, personal income, and spending figures. Immediate resistance is located at 110.90 (June 15 High), a break above targets 111.08 (June 18 High). On the downside, support is seen at 110.20 (10-DMA), a break below could take it lower 109.68 (June 27 Low).
GBP/USD: Sterling rebounded from 8-month lows as Britain's services sector gathered steam in April and first-quarter GDP growth was revised up, raising hopes the Bank of England would hike interest rates in August. The British economy grew 0.2 percent in the January to March quarter, against a preliminary number of 0.1 percent, while services output rose by 0.3 percent on the month in April, its fastest growth since November 2017. The major traded 0.6 percent up at 1.3149, having hit a low of 1.3049 the day before; it’s lowest since Nov. 2. FxWirePro's Hourly Sterling Strength Index stood at -46.14 (Neutral) 1100 GMT. Immediate resistance is located at 1.3204 (10-DMA), a break above could take it near 1.3250. On the downside, support is seen at 1.3049 (June 29 Low), a break below targets 1.3039 (Oct. 3 Low). Against the euro, the pound was trading 0.2 percent down at 88.65 pence, having hit a low of 88.90 pence earlier in the day, it’s lowest since March 12.
USD/CHF: The Swiss franc gained, rebounding from multi-week lows hit in the prior session, as the greenback slumped amid growing U.S.-China trade war tensions. The major trades 0.5 percent down at 0.9927, having touched a high of 0.9992 on Thursday, it’s highest since May 21. FxWirePro's Hourly Swiss Franc Strength Index stood at -8.12 (Neutral) by 1100 GMT. On the higher side, near-term resistance is around 1.0018 (May 18 High) and any break above will take the pair to next level till 1.0056. The near-term support is around 0.9906 and any close below that level will drag it till 0.9885.
Equities Recap
European shares recovered as investors' fears of higher barriers to trade eased, while the sterling rebounded on a better-than-expected revision to Britain's first-quarter economic growth.
The pan-European STOXX 600 index rallied 0.8 percent at 379.87 points, while the FTSEurofirst 300 index surged 0.9 percent to 1,489.29 points.
Britain's FTSE 100 trades 0.8 percent up at 7,675.01 points, while mid-cap FTSE 250 gained 0.6 percent to 20,802.58 points.
Germany's DAX rose 0.9 percent at 12,285.66 points; France's CAC 40 trades 1.02 percent higher at 5,328.50 points.
Commodities Recap
Crude oil prices rallied over 1 percent as an escalating trade dispute between the United States and other major economies cast doubt on future demand growth. International benchmark Brent crude was trading 1.2 percent up at $78.53 per barrel by 1043 GMT, having hit a high of $79.04 earlier, its highest since May 31. U.S. West Texas Intermediate was trading 0.05 percent up at $73.32 a barrel, after rising as high as $74.00 on Thursday, its highest since Nov. 2014.
Gold prices retreated from a from 6-month lows as speculators took profits amid a weaker greenback. Spot gold rose 0.2 percent to $1,250.75 an ounce by 1047 GMT, having touched a low of $1,245.84 on Thursday, its lowest since December 13. It was on track for its third straight weekly decline and also heading towards its worst quarterly loss since end-2016. U.S. gold futures edged up 0.1 percent at $1,251.80 an ounce.
Treasuries Recap
The U.S. 10-year Treasuries traded tad lower, in a muted session that witnessed data of little economic significance. Today’s focus will be personal income and spending data for May. Income should be boosted by firm job growth, a solid increase in average hourly earnings, and supportive rental and interest income too. The yield on the benchmark 10-year Treasuries rose 1/2 basis point to 2.85 percent, the super-long 30-year bond yields hovered around 2.97 percent and the yield on the short-term 2-year also traded nearly 1 basis point higher at 2.52 percent.
The German bunds slumped during European session after the country’s unemployment change for the month of June came in better than market expectations and eurozone’s consumer price-led inflation index for the same period also met consensus estimates. The German 10-year bond yields, which move inversely to its price, rose 1 basis point to 0.32 percent, the yield on 30-year note slid 1-1/2 basis points to 1.03 percent and the yield on short-term 2-year traded 1-1/2 basis points up at -0.67 percent
The Japanese 10-year government bond yield suffered during Asian session after the country’s unemployment rate for the month of May dropped to fresh 25-year low and the industrial production for the similar period also topped market expectations, thus weighing on debt prices. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, rose 1/2 basis point to 0.03 percent, the yield on the long-term 30-year hovered around 0.71 percent and the yield on short-term 1-year traded tad higher at -0.12 percent.
The Australian government bonds slumped on the last trading day of the week following weakness in the U.S. Treasuries, pushing the yield on the benchmark 10-year U.S. Treasury note rose to 2.849 percent compared with 2.827 percent Tuesday. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 2 basis points to 2.648 percent, the yield on the long-term 30-year Note jumped 1 basis point to 3.103 percent and the yield on short-term 2-year up 1/2 basis point to 2.005 percent.
