Market Roundup
• Italian Industrial Production (YoY) (Apr)1.3%, 1.4% previous
•Italian Industrial Production (MoM) (Apr)0.5%, 0.0% forecast, 0.6% previous
•Greek CPI (YoY) (May)5.2%, 5.4% previous
•Greek Industrial Production (YoY) (Apr) 2.1%, 8.2% previous
•Greek HICP (YoY) (May) 4.9%, 4.6% previous
•US CPI (MoM) (May) 0.5%, 0.5% forecast, 0.6% previous
•US CPI (MoM) (May) 0.5%, 0.5% forecast, 0.6% previous
•US Core CPI (MoM) (May) 0.2%, 0.3% forecast, 0.4% previous
•US CPI (YoY) (May) 4.2%, 4.2% forecast, 3.8% previous
•US Core CPI (YoY) (May) 2.9%, 2.9% forecast, 2.8% previous
•US CPI Index, n.s.a. (May) 335.12, 335.11 forecast, 333.02 previous
•US Core CPI Index (May) 336.12, -, 335.42 previous
•US CPI, n.s.a (MoM) (May) 0.63%, -, 0.85% previous
•US CPI Index, s.a. (May) 333.98, -, 332.41 previous
•US Real Earnings (MoM) (May) -0.2%, -, -0.2% previous
•Canada BoC Interest Rate Decision 2.25%, 2.25% forecast, 2.25% previous
Looking Ahead Economic Data (GMT)
•18:00 US 10-Year Note Auction 4.468% previous
Currency Summaries
EUR/USD : The euro recovered some ground against dollar on Wednesday after data showed U.S. consumer inflation rose to its highest level in three years in May, though the reading was in line with economists' expectations, marginally reducing the chances of the Federal Reserve hiking rates this year.U.S. consumer inflation increased at its fastest pace in three years in May as the Middle East conflict raised the price of gasoline and other energy products.The Consumer Price Index increased 4.2% in the 12 months through May, the largest gain since April 2023, the Labor Department's Bureau of Labor Statistics said on Wednesday. Economists polled by Reuters had forecast the CPI increasing 4.2% year-on-year.. Immediate resistance can be seen at 1.1633(SMA20), an upside break can trigger rise towards 1.1673(50%fib).On the downside, immediate support is seen at 1.1505(61.8%fib), a break below could take the pair towards 1.1481(Lower BB).
GBP/USD: Sterling was broadly steady against the dollar on Wednesday as investors monitored renewed tensions between the U.S. and Iran, which have cast fresh doubt over efforts to end the conflict.Iran's Revolutionary Guards said they launched missile and drone attacks on U.S. bases in Jordan, Kuwait and Bahrain in retaliation for American strikes on Iranian targets near the Strait of Hormuz. The latest exchange, triggered after President Donald Trump said Iran had downed a U.S. Apache helicopter, marks one of the biggest escalations since Washington and Tehran agreed to a ceasefire in April.Despite the flare-up, currency markets largely shrugged off the developments, with investors remaining hopeful for a diplomatic resolution and the safe-haven dollar trading little changed .Immediate resistance can be seen at 1.3463(SMA 20), an upside break can trigger rise towards 1.3526(50%fib).On the downside, immediate support is seen at 1.3317(50%fib), a break below could take the pair towards1.3265(Lower BB).
AUD/USD: Australian dollar dipped on as deteriorating U.S.-Iran relations dampened risk appetite.The market semtiment remained cautious after fresh hostilities threatened to unravel the tentative truce. U.S. President Donald Trump said Iran had shot down a U.S. Apache helicopter in the Strait of Hormuz and vowed to respond. Investors were wary as diplomacy has so far failed to produce a peace deal or reopen the Strait of Hormuz, a vital artery for global oil supplies. On the data front, China’s producer prices hit their highest since July 2022 in May, while consumer inflation stayed elevated amid higher global energy costs.The producer price index (PPI) rose 3.9% from the previous year, National Bureau of Statistics (NBS) data showed on Wednesday. Consumer prices in May rose 1.2% from a year earlier mainly on rising gasoline. Immediate resistance can be seen at 0.7170(38.2%fib), an upside break can trigger rise towards 0.7189(SMA 20).On the downside, immediate support is seen at 0.7027(50%fib), a break below could take the pair towards 0.7000(50%fib).
USD/JPY: The dollar edged higher slightly on Wednesday as economic risks due to Mideast tensions undermine the yen.So far, there has been no evidence of Japanese FX intervention, with market participants noting that it remains difficult for the Ministry of Finance to act against a broadly strong USD environment.At the same time, speculation is increasing that the Bank of Japan may need to tighten policy more than currently expected, with some pricing in a possible 25 bps hike as early as next week.The BOJ is widely expected to raise its main rate by 25 basis points to 1% at its June 15-16 meeting and a second hike sometime this year has also been well priced in.Swap markets on Tuesday were pricing in a 93% chance of a BOJ rate hike this month, up from expectations in May of around an 80% chance. Immediate resistance can be seen at 160.00(Psychological level) an upside break can trigger rise towards 160.00(Psychological level) .On the downside, immediate support is seen at 158.23(SMA 20) a break below could take the pair towards 157.78(50%fib).
Equities Recap
European shares were little changed on Wednesday as investors held on to hopes for peace in the Middle East despite renewed tensions, while also focusing on the European Central Bank's upcoming policy decision.
UK's benchmark FTSE 100 was last trading up at 0.22 percent, Germany's Dax was down by 0.89 percent, France’s CAC was down by 0.51 percent.
Commodities Recap
Gold pared losses on Wednesday but remained near a two-month low after cooler-than-expected U.S. inflation data, while traders turned their focus to risks of a wider regional conflict involving the U.S. and Iran.
Spot gold was down 2.6% at $4,151.86 per ounce by 9:02 a.m. EDT (1302 GMT), its lowest level since March 23. Bullion fell 3% earlier in the session.
U.S. gold futures for August delivery shed 2.6% to $4,174.70.
Oil prices rose on Wednesday after U.S. President Donald Trump scolded Iran in a Truth Social post following tit-for-tat strikes between the U.S. and Iran overnight.
Brent futures were up 93 cents, or 1%, at $92.38 a barrel by 1321 GMT, while U.S. West Texas Intermediate crude was up $1.1, or 1.25%, at $89.30 a barrel.
