Market Roundup
- EUR/USD -0.33%, USD/JPY -0.14%, GBP/USD -0.35%, EUR/GBP 0.03%
- DXY 0.29%, DAX -0.07%, FTSE -1.1%, Brent 0.07%, Gold -0.59%
- New BoE rate-setter Haskel focuses on weak wage growth, sterling falls
- EU signals no easing up on financial market access after Brexit
- Bank of England's McCafferty says must boost public confidence in QE
- Great Britain UK May Finance Mortgage Applications, 39.244k, 38.049k previous
- As investment stalls, auto industry warns PM May: Avert a Brexit car crash
Economic Data Ahead
- (0900 ET/1300 GMT) The S&P/Case-Shiller is expected to report that U.S. home price index of 20 metropolitan areas rose at an annualized rate of 6.8 percent in April, after posting similar gains in the previous month.
- (1000 ET/1400 GMT) Federal Reserve Bank of Richmond will publish it Manufacturing Index for June. The index posted a rise of 16 in the prior month.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (1315 ET/1715 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic participates in an armchair chat before the Birmingham Civil Rights Institute, in Birmingham.
- (1345 ET/1745 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated question-and-answer session before the Greater Houston Partnership State of Talent, in Houston, Texas.
FX Beat
DXY: The dollar index rebounded from a 2-week low touched earlier in the session amid growing concerns about an intensifying conflict between the United States and China. The greenback against a basket of currencies trades 0.2 percent up at 94.48, having touched a low of 94.17 earlier, its lowest since June 14. FxWirePro's Hourly Dollar Strength Index stood at -81.83 (Slightly Bearish) by 1100 GMT.
EUR/USD: The euro slumped after rising to a near 2-week peak earlier in the day amid ongoing regional political instability, as German Chancellor Angela Merkel faced pressure to deal with the migration issue that threatened her government. The European currency traded 0.3 percent down at 1.1665, having touched a high of 1.1719 earlier, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 137.50 (Highly Bullish) by 1100 GMT. 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 1.1674 (21-DMA), a break below could drag it till 1.1624 (5-DMA).
USD/JPY: The dollar trimmed losses after falling to a 2-week low earlier in the session on intensifying conflict between the United States and its trade partners. The major was trading 0.1 percent down at 109.66, having hit a low of 109.36 earlier, its lowest since June 11. FxWirePro's Hourly Yen Strength Index stood at 55.70 (Bullish) by 1100 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Richmond Fed Manufacturing index and FOMC Bostic and Kaplan 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 109.19 (June 8 Low), a break below could take it lower 108.95 (May 24 Low).
GBP/USD: Sterling tumbled after rising for three straight sessions, as dovish comments from incoming Bank of England rate-setter John Haskel about the uncertainty of the impact of Brexit on the economy dented investor sentiment. The major traded 0.3 percent down at 1.3238, having hit a high of 1.3314 on Friday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at 17.78 (Neutral) 1100 GMT. Immediate resistance is located at 1.3307 (21-DMA), a break above could take it near 1.3389. On the downside, support is seen at 1.3204 (May 29 Low), a break below targets 1.3150 (June 19 Low). Against the euro, the pound was trading 0.05 percent down at 88.14 pence, having hit a low of 88.22 pence earlier, it’s lowest since June 14.
USD/CHF: The Swiss franc eased after rising to an over 1-week peak in the prior session after U.S. Treasury Secretary Steven Mnuchin stated that coming investment restrictions from the department would not be specific to China. The major trades 0.3 percent up at 0.9894, having touched a low of 0.9855 the day before, it’s lowest since June 14. FxWirePro's Hourly Swiss Franc Strength Index stood at 62.86 (Bullish) by 1100 GMT. On the higher side, near-term resistance is around 0.9912 (5-DMA) and any break above will take the pair to next level till 0.9925 (June 22 High). The near-term support is around 0.9840 (June 13 Low) and any close below that level will drag it till 0.9825 (June 14 Low).
Equities Recap
European shares posted modest gains, while the sterling eased following incoming rate-setter Bank of England Haskel's dovish comments.
The pan-European STOXX 600 index rallied 0.1 percent at 377.70 points, while the FTSEurofirst 300 index gained 0.3 percent to 1,477.37 points.
Britain's FTSE 100 trades 0.5 percent up at 7,547.35 points, while mid-cap FTSE 250 rose 0.1 percent to 20,799.23 points.
Germany's DAX rose 0.5 percent at 12,272.88 points; France's CAC 40 trades 0.3 percent higher at 5,299.22 points.
Commodities Recap
Crude oil prices rallied, supported by Canadian production losses and uncertainty over Libyan exports, however, rising OPEC supply and intensifying trade conflicts between the United States and other major economies limited gains. International benchmark Brent crude was trading 0.2 percent up at $74.97 per barrel by 1059 GMT, having hit a low of $72.44 last week, its lowest since May 2. U.S. West Texas Intermediate was trading 0.2 percent down at $68.05 a barrel, after falling as low as $63.62 last week, its lowest since April 10.
Gold prices slumped to a more than 6-month low, weighed by prospects of rising U.S. interest rates amid a strengthening economy. Spot gold was 0.6 percent down at $1,257.19 an ounce by 1100 GMT, having touched a low of $1,255.99 earlier in the session, its lowest since Dec. 18, 2017. U.S. gold futures for August delivery were 0.5 percent lower at $1,262.40 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.880 percent higher by 0.005 bps, while 5-year yield was 0.002 bps up at 2.744 percent.
The Japanese government bond prices eased, with the 20-year JGB yield rising 0.5 basis point to 0.505 percent. The 10-year JGB yield also rose 0.5 basis point to 0.030 percent while the price of ten-year JGB futures fell 0.04 point to 150.82. The 30-year JGB yield rose 1 basis point to 0.715 percent while the 40-year JGB yield rose 0.5 basis point to 0.865 percent.
The Australian government bond yields fell, with government 10-year paper returning 2.63 percent compared to 2.85 percent just a couple of weeks ago. The three-year bond futures were up 1 tick at 97.895, while the 10-year contract gained half a tick to 97.3650. The yields on New Zealand government bonds were down around 2 basis points across the curve.
