Market Roundup
- Trump to use U.S. security review panel to curb China tech investments
- Deal struck for Putin-Trump summit, Helsinki possible venue
- Bavarian CSU leader upbeat on deal with Merkel over migration
- Bank of England hits back at EU over banks' Brexit readiness
- Australia forced to shelve S48 billion company tax cut as senators scuttle bills
- Australia job vacancies jump 5.7 pct in May qtr
- New Zealand Jun Cash Rate, 1.75%, f'cast 1.75%, last 1.75%
- Japan May Reatil Sales YY, 0.6%, f'cast 0.9%, last 1.6%
- Japan w/e Foreign Bond Investment, 27.4 bln, last 1,490.4 bln
- Japan w/e Foreign JP Stock, -483.5 bln, -40.8 bln last
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Q1 ISTAT Public Deficit/GDP, Q1, last 1.6%
- (0500 ET/0900 GMT) Italy Jun CPI (EU Norm) Prelim YY, f'cast 1.4%, last 1%
- (0500 ET/0900 GMT) Italy Jun Consumer Pirce Prelim YY, f'cast 1.3%, last 1%
- (0500 ET/0900 GMT) EZ Jun Business Climate, f'cast 1.40, last 1.45
- (0500 ET/0900 GMT) EZ Jun Econmic Sentiment, f'cast 112, last 112.5
- (0500 ET/0900 GMT) EZ Jun Industrial Sentiment, f'cast 6.4, last 6.8
- (0500 ET/0900 GMT) EZ Jun Services Sentiment, f'cast 14.2, last 14.3
- (0500 ET/0900 GMT) EZ Jun Consumer Confid. Final, f'cast -0.5, last 0.2
- (0500 ET/0900 GMT) EZ Jun Cons Infl Expec, last 17.5
- (0500 ET/0900 GMT) EZ Selling Price Expec, last 9.3
- (0800 ET/1200 GMT) Germany Jun CPI Prelim YY, f'cast 2.1%, last 2.2%
- (0800 ET/1200 GMT) Germany Jun HICP Prelim YY, f'cast 2.1%, last 2.2%
Key Events Ahead
- N/A ECB council meeting in Frankfurt
- (0600 ET/1000 GMT) BoE's David Bailey speaks in London
- (0930 ET/1330 GMT) BoE's Andy Haldane speaks in London
- (1045 ET/1445 GMT) Fed's James Bullard speaks in Missouri
- (1200 ET/1600 GMT) Fed's Bostic speaks in Atlanta
FX Beat
DXY: The dollar index rallied to a 1-week peak amid conflicting signals from Washington on a proposal to restrict Chinese investment. The greenback against a basket of currencies trades 0.2 percent up at 95.45, having touched a high of 95.47 earlier in the session, its highest since June 21. FxWirePro's Hourly Dollar Strength Index stood at 131.86 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after falling to a 6-day low in the previous session on increasing concerns over political complications in Germany. German Chancellor Angela Merkel's coalition government faces potential collapse as the Christian Social Union (CSU) threatened to defy her and impose border controls unless their demands to reduce Germany's immigration burden are met. The European currency traded 0.1 percent up at 1.1559, having touched a high of 1.1719 on Tuesday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at -76.58 (Slightly Bearish) by 0500 GMT. Investors’ attention will remain on the Eurozone economic sentiment indicator, ahead of U.S. unemployment benefit claims, gross domestic product, personal consumption expenditure prices and Fed Bullard and Bostic's speech. Immediate resistance is located at 1.1632 (5 DMA), a break above targets 1.1676 (21-DMA). On the downside, support is seen at 1.1598 (June 22 Low), a break below could drag it till 1.1530 (June 19 Low).
USD/JPY: The dollar rose, extending gains for the third straight session, after U.S. President Donald Trump said that he will use a strengthened national security review process to avoid Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions. The major was trading 0.05 percent up at 110.28, having hit a low of 109.36 on Tuesday, its lowest since June 11. FxWirePro's Hourly Yen Strength Index stood at -10.31 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, gross domestic product, personal consumption expenditure prices and Fed Bullard and Bostic's speech. 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 109.55 (June 19 Low), a break below could take it lower 109.19 (June 8 Low).
GBP/USD: Sterling tumbled to a fresh 7-month low against the dollar, as imminent Brexit talks and doubts the Bank of England will hike interest rates at all this year weighed heavily on the British pound. The major traded 0.1 percent down at 1.3093, having hit a low of 1.3070 earlier; it’s lowest since Nov. 14. FxWirePro's Hourly Sterling Strength Index stood at -78.29 (Slightly Bearish) 0500 GMT. Investors’ attention will remain on BoE MPC member Haldane's speech, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3200, a break above could take it near 1.3296 (21-DMA). On the downside, support is seen at 1.3061 (Nov. 13 Low), a break below targets 1.3107 (Oct. 5 Low). Against the euro, the pound was trading 0.2 percent down at 88.28 pence, having hit a low of 88.37 pence earlier in the day, it’s lowest since June 7.
AUD/USD: The Australian dollar steadied after falling to a 17-month low in the previous session, as growing concerns about declining asset prices in China clouded the outlook for global growth. The Aussie trades 0.1 percent up at 0.7346, having hit a low of 0.7323 on Wednesday; it’s lowest since Jan 2017. FxWirePro's Hourly Aussie Strength Index stood at 5.26 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7300, a break below targets 0.7280. On the upside, resistance is located at 0.7405 (10-DMA), a break above could take it near 0.7422 (June 25 High).
NZD/USD: The New Zealand dollar plunged to 2-year lows after the Reserve Bank of New Zealand held the official cash rate at 1.75 percent for the 11th straight review as it struggled to boost inflation to 2 percent. The central bank warned of looming risks to the outlook such as slowing growth and global trade frictions, indicating it will maintain record-low rates in short term. The Kiwi trades 0.3 percent down at 0.6777, having touched a low of 0.6768 earlier, its lowest level since June 2016. FxWirePro's Hourly Kiwi Strength Index was at -70.32 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6810 (Session High), a break above could take it near 0.6863 (5-DMA). On the downside, support is seen at 0.6750, a break below could drag it below 0.6730.
Equities Recap
Asian shares tumbled to 9-month lows on growing concerns the U.S. administration's approach to trade is harming global economic growth.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.3 percent.
Tokyo's Nikkei eased 0.05 percent to 22,270.39 points, Australia's S&P/ASX 200 index gained 0.3 percent to 6,215.40 points, and South Korea's KOSPI plunged 1.1 percent to 2,316.51 points.
Shanghai composite index declined 0.9 percent to 2,789.07 points, while CSI300 index was trading 1.0 percent down at 3,425.18 points.
Hong Kong’s Hang Seng was trading 0.3 percent lower at 28,208.83 points. Taiwan shares shed 0.4 percent to 10,654.28 points.
Commodities Recap
Crude oil prices steadied after rising to multi-week highs in the previous session, despite high output from Russia, the United States and Saudi Arabia. International benchmark Brent crude was trading 0.2 percent up at $77.51 per barrel by 0459 GMT, having hit a high of $78.13 the day before, its highest since May 31. U.S. West Texas Intermediate was trading 0.3 percent up at $72.50 a barrel, after rising as high as $73.03 on Wednesday, its highest since Nov. 2014.
Gold prices plunged, hovering towards a near 6-month low hit in the previous session, as the dollar was steady against a basket of currencies amid developments in the U.S.-China trade war. Spot gold was trading 0.05 percent lower at $1,251.73 an ounce by 0506 GMT, having touched a low of $1,251.90 on Wednesday, its lowest since mid-December. U.S. gold futures for August delivery were down 0.2 percent at $1,254.20 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.836 percent higher by 0.011 bps, while 5-year yield was 0.004 bps up at 2.709 percent.
The Japanese 10-year government bonds gained during late Asian session after the country’s retail sales for the month of May missed market expectations ahead of a host of 2-tier economic data later today and tomorrow. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, slipped 1/2 basis point to 0.03 percent, the yield on the long-term 30-year also fell 1/2 basis point to 0.71 percent and the yield on short-term 3-year traded flat at -0.11 percent.
The Australian bonds gained during Asian session tracking similar movement in the United States counterpart as trade war fears continued to linger on ahead of the Reserve Bank of Australia’s (RBA) monetary policy meeting, scheduled to be held by early next week. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, slipped nearly 1 basis point to 2.63 percent, the yield on the long-term 30-year Note plunged nearly 4 basis points to 3.09 percent and the yield on short-term 2-year traded nearly 2 basis points lower at 2.00 percent.
The Canadian government bond prices were mixed across the yield curve, with the 10-year rising 10 Canadian cents to yield 2.094 percent. The 10-year yield touched its lowest intraday since Jan. 4 at 2.056 percent.
