Market Roundup
•US May New Home Sales (MoM) -11.3% forecast,-4.7% previous
•US New Home Sales 619K, 636K forecast, 634K previous
•US EIA Refinery Crude Runs (WoW) -0.282M previous
•US EIA Weekly Refinery Utilization Rates (WoW) -1.5% previous
•US Distillate Fuel Production -0.272M previous
•US Crude Oil Inventories -2.600M forecast,-2.547M previous
Looking Ahead Economic Data(GMT)
•01:00 Australia MI Inflation Expectations 4.1% previous
•01:00 New Zealand JunANZ Business Confidence 11.2 previous
•01:00 New Zealand Jun NBNZ Own Activity 11.8% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro slipped lower on Wednesday after a European Central Bank policymaker talked up the chances of further rate cuts this year, a notably different stance from the Fed's Michelle Bowman.ECB governing council member Olli Rehn told Bloomberg that two more cuts this year seemed reasonable . That contrasted with Fed Governor Bowman, who said she did not expect any U.S. rate cuts this year. Euro zone inflation may be bumpy but that was always expected and data continues to suggest that price growth will settle at the European Central Bank's 2% target, Finnish policymaker Olli Rehn said on Wednesday. The dollar index , which measures the greenback against a basket of currencies, gained 0.38% to 106.07, with the euro down 0.34% at $1.0677. Immediate resistance can be seen at 1.0720(Daily high), an upside break can trigger rise towards 1.0746(38.2% fib).On the downside, immediate support is seen at 1.0670(23.6% fib), a break below could take the pair towards 1.0634(Lower BB).
GBP/USD: The pound dipped on Wednesday as the dollar strengthened while investors waited for the release of the Federal Reserve's preferred gauge of inflation on Friday. U.S. personal consumption expenditure inflation data, due on Friday, will guide Fed policy and could lead to swings in currency markets.Britain's relatively high services and wage inflation means traders expect the Bank of England to cut rates just once or twice this year. That has kept upward pressure on bond yields, making them attractive to many investors and thereby supporting the pound.Expectations that the Labour party will win a huge majority in the July 4 general election and bring some long-absent stability to British policymaking has also been supporting sterling.Yet economists and investors say there are risks to British financial markets from a Labour party that has been coy about its exact plans for taxing and spending. Immediate resistance can be seen at 1.2685(38.2%fib), an upside break can trigger rise towards 1.2775(23.6%fib).On the downside, immediate support is seen at 1.2637(50%fib), a break below could take the pair towards 1.2586(61.8% fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday as the greenback notched broad-based gains, with the currency unable to take advantage of the boost it got from hot domestic inflation data the day before.The loonie was trading 0.3% lower at 1.37 to the U.S. dollar, or 72.99 U.S. cents, after trading in a range of 1.3651 to 1.3704.On Tuesday, the currency touched its strongest intraday level in three weeks at 1.3626 as Canadian inflation unexpectedly accelerated to an annual rate of 2.9% in May from 2.7% in April, reducing expectations the Bank of Canada would cut interest rates further next month. Preliminary data showed Canadian wholesale trade falling 0.9% in May from April, while the price of oil , one of Canada's major exports, was up 0.7% at $81.42 a barrel. Immediate resistance can be seen at 1.3714 (38.2%fib), an upside break can trigger rise towards 1.3747 (23.6%fib).On the downside, immediate support is seen at 1.3689(50%fib), a break below could take the pair towards 1.3664 (61.8%fib).
USD/JPY: The U.S. dollar on Wednesday to hit its highest level against the Japanese yen in nearly 38 years as investor speculated that authorities in Japan could intervene to strengthen Japanese yen . Japan's top currency diplomat, Masato Kanda, said authorities were "seriously concerned and on high alert" about the yen's rapid decline. The yen has been hammered as investors flocked to dollar-based assets to take advantage of U.S. interest rates which are 5.25% to 5.5%. That is much higher than Japanese rates, which have been raised this year to a range of zero to 0.1%.The U.S. dollar hit its strongest level since December 1986 against the yen, and it was last up 0.7% at 160.697 yen .Strong resistance can be seen at 160.83(23.6%fib), an upside break can trigger rise towards 161.00(Psychological level).On the downside, immediate support is seen at 159.41 (38.2% fib), a break below could take the pair towards 158.02(50%fib).
Equities Recap
European shares slipped on Wednesday as government bond yields rose on concerns about persistent global price pressures ahead of a crucial U.S. inflation report, with investor focus also on French elections at the weekend.
UK's benchmark FTSE 100 closed down by 0.27 percent, Germany's Dax ended down by 0.08 percent, France’s CAC finished the day up by 0.69 percent.
Major U.S. stock indexes closed with modest gains on Wednesday after a choppy trading session, with investors holding their cards close to the vest ahead of a presidential debate and an inflation report closely watched by Federal Reserve policy makers.
Dow Jones closed up by 0.04 percent, S&P 500 ended up by 0.16 percent, Nasdaq finished the day up by 0.48 percent.
Commodities Recap
Gold prices slipped 1% to their lowest level in more than two weeks on Wednesday, weighed by a stronger dollar and higher bond yields, while traders looked forward to U.S. inflation data due later this week.
Spot gold was down 0.8%, at $2,301.16 per ounce by 2:03 p.m. ET (1803 GMT), its lowest since June 10.U.S. gold futures settled 0.8% lower, at $2,313.2.
Oil prices settled slightly higher on Wednesday despite a surprise jump in U.S. gasoline supplies, as investors worried that a potential expansion of the Gaza war could disrupt crude supplies from the Middle East.
Brent crude futures rose 24 cents, or 0.3%, to settle at $85.25 per barrel. U.S. West Texas Intermediate crude futures settled 7 cents higher at $80.90 a barrel.
