Market Roundup
- China's robust industrial profits keep trade war risks at bay for now
- U.S. House backs tighter foreign investment rules amid China worries
- Hammond tells China that Britain committed to free trade
- China should take "self-defence measures" in trade war-Global Times
- BoJ top 10 shareholder in 40% of Japan’s listed stock companies – Nikkei
- BoJ DepGov Amamiya – Will check into factors behind soft inflation, could fine-tune more – Asahi
- BoJ Amamiya – Very far off from stimulus exit – Bloomberg
- U.S. pushes allies to halt Iran oil imports, waivers unlikely
- Australia to pass foreign interference bill amid tensions with China
- New Zealand May Trade Balance, 263 mln, f'cast 294 mln, last 193 mln
- New Zealand Jun NBNZ Business Outlook, -39.0%, last -27.2%
- New Zealand Jun NBNZ Own Activity, 9.4%, last 13.6%
Economic Data Ahead
- (0245 ET/0645 GMT) France Jun Consumer Confidence, f'cast 100, last 100
- (0400 ET/0800 GMT) Italy Jun Mfg Business Confidence, f'cast 106.9, last 107.7
- (0400 ET/0800 GMT) Italy Jun Consumer Confidence, f'cast 113.2, last 113.7
- (0500 ET/0900 GMT) Italy May Flash Trd Bal Non-EU, last 1.86 bln
- (0600 ET/1000 GMT) Italy May Producer Prices YY, last 1.3%
- (0600 ET/1000 GMT) UK Jun CBI Distributive Trades, f'cast 11, last 11
Key Events Ahead
- (1100 ET/1500 GMT) Fed's Quarles speaks in Idaho
- (1230 ET/1630 GMT) Fed's Rosengren speaks in Washington D.C.
- (1515 ET/1915 GMT) Bank of Canada Governor Stephen Poloz speaks in Victoria, Canada
- (1700 ET/2100 GMT) Reserve Bank of New Zealand announces Official Cash Rate
FX Beat
DXY: The dollar index held firm after the U.S. House of Representatives passed a bill on Tuesday to tighten foreign investment rules. The greenback against a basket of currencies trades 0.05 percent up at 94.70, having touched a low of 94.17 the prior session, its lowest since June 14. FxWirePro's Hourly Dollar Strength Index stood at 109.91 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after falling from a near 2-week peak in the previous session, as investors awaited the European Central Bank (ECB) non-monetary policy meeting. The European currency traded 0.1 percent up at 1.1655, having touched a high of 1.1719 the day before, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 121.22 (Highly Bullish) by 0500 GMT. Investors’ attention will remain on the ECB non-meeting policy meeting, economic bulletin and M3 money supply, ahead of U.S. good trade balance, durable goods orders, wholesale inventories, pending home sales and Fed Quarles and Rosengren's speech. Immediate resistance is located at 1.1732 (June 5 Low), a break above targets 1.1750 (May 24 Low). 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 eased below the 110.00 handle amid concerns over an escalating trade war between the United States and its trade partners. The major was trading 0.1 percent down at 109.93, having hit a low of 109.36 the day before, its lowest since June 11. FxWirePro's Hourly Yen Strength Index stood at -39.17 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. good trade balance, durable goods orders, wholesale inventories, pending home sales and Fed Quarles and Rosengren'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 eased, extending previous session losses, after an incoming Bank of England policymaker expressed caution over Britain's readiness for higher interest rates and uncertainty over the impact of Brexit on the economy. The major traded 0.05 percent down at 1.3215, having hit a high of 1.3314 on Friday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at -53.47 (Bearish) 0500 GMT. Investors’ attention will remain on BoE Governor Carney's speech and Financial Stability Report, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3307 (21-DMA), a break above could take it near 1.3348 (May 31 Low). On the downside, support is seen at 1.3192 (Previous Session Low), a break below targets 1.3150 (June 19 Low). Against the euro, the pound was trading 0.05 percent down at 88.11 pence, having hit a low of 88.22 pence the day before, it’s lowest since June 13.
AUD/USD: The Australian dollar slumped to a 6-day low amid growing concerns about the possible impact of tariffs on global trade and growth. The Aussie trades 0.2 percent down at 0.7377, having hit a high of 0.7443 on Friday; it’s highest since June 18. FxWirePro's Hourly Aussie Strength Index stood at -57.22 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7345 (June 21 Low), a break below targets 0.7328 (May 28, 2017, Low). On the upside, resistance is located at 0.7429 (10-DMA), a break above could take it near 0.7500.
NZD/USD: The New Zealand dollar plunged to a 7-month low after a survey by ANZ Bank reinforced recent signs the New Zealand's economy was losing some of its momentum after years of strong growth. The downbeat result further cemented expectations the Reserve Bank of New Zealand would keep rates unchanged at 1.75 percent at its policy review on Thursday. The Kiwi trades 0.5 percent down at 0.6821, having touched a low of 0.6811 earlier, its lowest level since Nov. 21. FxWirePro's Hourly Kiwi Strength Index was at -156.72 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6876 (5-DMA), a break above could take it near 0.6916 (10-DMA). On the downside, support is seen at 0.6800, a break below could drag it below 0.6780 (Nov. 17 Low).
Equities Recap
Asian shares traded near a 2-year low as weakness in Chinese stocks and the yuan weighed on the region's sentiment, while oil prices rebounded as the United States pressured allies to stop buying Iranian crude.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.3 percent.
Tokyo's Nikkei eased 0.3 percent to 22,271.77 points, Australia's S&P/ASX 200 index slumped 0.05 percent to 6,195.90 points, and South Korea's KOSPI plunged 0.2 percent to 2,346.19 points.
Shanghai composite index declined 1.2 percent to 2,811.07 points, while CSI300 index was trading 2.02 percent down at 3,459.00 points.
Hong Kong’s Hang Seng was trading 1.05 percent lower at 28,581.65 points. Taiwan shares shed 0.4 percent to 10,701.03 points.
Commodities Recap
Crude oil prices rebounded following supply disruptions in Libya and Canada and after U.S. officials instructed oil importers to stop buying Iranian crude from November. International benchmark Brent crude was trading 0.2 percent up at $76.66 per barrel by 0437 GMT, having hit a high of $76.77 earlier, its highest since June 16. U.S. West Texas Intermediate was trading 0.1 percent up at $70.76 a barrel, after rising as high as $70.91 earlier, its highest since May 24.
Gold prices slumped to a more than 6-month low earlier in the session, as the dollar steadied amid easing risk aversion and expectations of further interest rate hikes by the U.S. Federal Reserve. Spot gold declined 0.4 percent to $1,254.40 an ounce by 0454 GMT, having touched a low of $1,253.28 earlier, its lowest since Dec. 15, 2017. U.S. gold futures for August delivery were nearly unchanged at $1,259.70 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.873 percent lower by 0.007 bps, while 5-year yield was 0.005 bps down at 2.742 percent.
The Japanese 10-year government bonds remained flat as investors trade sideways in a muted week that witnessed data of little economic significance. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, remained flat at 0.03 percent, the yield on the long-term 30-year also remained steady at 0.71 percent and the yield on short-term 2-year traded tad higher at -0.12 percent.
The Australian bonds gained on the back of safe-haven demand amid rising tensions of a trade war between the White House and other major economies, leaving the market in a holding pattern for now. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 1 basis point to 2.643 percent, the yield on the long-term 30-year Note dipped 2 basis points to 3.125 percent and the yield on short-term 2-year down 1/2 basis point to 2.030 percent.
The Canadian government bond prices were lower across a flatter yield curve, with the 10-year falling 6 Canadian cents to yield 2.102 percent.
