Posted at 03 June 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index declined to a 1-week low after San Francisco Federal Reserve Bank President Mary Daly stated that she was taking a patient approach on interest rates until economic data and trade talks provided more clarity on the U.S. growth outlook. The greenback against a basket of currencies traded 0.1 percent down at 97.67, having touched a low of 98.58, its lowest since May 27. FxWirePro's Hourly Dollar Strength Index stood at 116.67 (Highly Bullish) by 0400 GMT.
EUR/USD: The euro surged to a near 1-week peak, as Italy promised to respect the European Union's fiscal rules in its next budget. Investors’ attention will also remain on the Eurozone and German PMI for further clues on the strength of the economy. The European currency traded 0.1 percent up at 1.1180, having touched a high of 1.1190 earlier, its highest since May 28. FxWirePro's Hourly Euro Strength Index stood at -3.53 (Neutral) by 0400 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, ahead of the U.S. construction spending, and manufacturing PMI from both Markit and ISM. Immediate resistance is located at 1.1209 (May 6 High), a break above targets 1.1243 (May 14 High). On the downside, support is seen at 1.1106 (May 23 Low), a break below could drag it below 1.1075 (May 18, 2017, Low).
USD/JPY: The dollar plunged to a near 5-month low as heightened U.S.-China trade tensions and Washington's threat of tariffs on Mexico stoked worries of a global recession. The major was trading 0.1 percent down at 108.12, having hit a low of 108.07, its lowest since Jan. 14. FxWirePro's Hourly Yen Strength Index stood at 140.65 (Highly Bullish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. construction spending, and manufacturing PMI from both Markit and ISM. Immediate resistance is located at 108.50 (23.6% retracement of 109.92 and 108.07), a break above targets 110.36 (May 23 High). On the downside, support is seen at 107.77 (Jan. 10 Low), a break below could take it lower at 107.51 (Jan. 4 Low).
GBP/USD: Sterling rose, extending previous session's rebound after British Prime Minister Theresa May announced her departure, triggering a contest that will bring a new leader to power, with most of the frontrunners expected to push for a cleaner break with the European Union. The major traded 0.1 percent up at 1.2645, having hit a low of 1.2558 on Friday; it’s lowest since Jan, 3. FxWirePro's Hourly Sterling Strength Index stood at -10.34 (Neutral) 0400 GMT. Investors’ attention will remain on the UK manufacturing purchasing manager index, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2702 (May 28 High),. a break above could take it near 1.2747 (May 27 High). On the downside, support is seen at 1.2570 (Dec. 17 Low), a break below targets 1.2529 (Dec. 18 Low). Against the euro, the pound was trading flat at 88.40 pence, having hit a low of 88.74 on Friday, it’s lowest since Jan. 16.
AUD/USD: The Australian dollar rallied to a 3-week peak after a private survey on the Chinese manufacturing sector suggested a modest expansion in factory activity as export orders rebounded from a contraction. Moreover, data showing Australia's Q1 Business Inventories rose 0.7 percent, against a forecast of 0.0 percent and previous reading of -0.2 percent supported upside. The Aussie trades 0.2 percent up at 0.6952, having hit a high of 0.6959 earlier, it’s highest since May 13. FxWirePro's Hourly Aussie Strength Index stood at 89.87 (Highly Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6881 (May 24 Low), a break below targets 0.6846. On the upside, resistance is located at 0.6997 (May 9 High), a break above could take it near 0.7029 (May 2 High).
NZD/USD; The New Zealand dollar consolidated near a 1-week high as markets in New Zealand remained closed on account of Queen's Birthday. The Kiwi trades 0.2 percent higher at 0.6547, having touched a low of 0.6494 on Thursday, its lowest level May 23. FxWirePro's Hourly Kiwi Strength Index was at -23.293 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6559 (May 27 High), a break above could take it near .6591 (May 14 High). On the downside, support is seen at 0.6474 (Oct. 4 Low), a break below could drag it below 0.6442 (Oct. 10 Low).
Equities Recap
Asian shares plunged to multi-month lows on worries intensifying U.S.-China tensions and Washington's new tariff threats against Mexico could send the global economy into a recession.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat above last week's 4-month low.
Tokyo's Nikkei eased 1.2 percent to 20,363.39 points, Australia's S&P/ASX 200 index fell 1.02 percent to 6,331.60 points and South Korea's KOSPI rose 1.1 percent to 2,063.33 points.
Shanghai composite index declined 0.05 percent to 2,898.45 points, while CSI 300 index traded 0.3 percent up at 3,641.89 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 26,882.07 points. Taiwan shares added 0.1 percent to 10,500.07 points
Commodities Recap
Crude oil prices declined by more than 1 percent, extending losses of over 3 percent from Friday, amid stalling demand and as trade disputes fanned fears of a global economic slowdown. International benchmark Brent crude was trading 1.05 percent lower at $61.09 per barrel by 0437 GMT, having hit a low of $60.74, its lowest since Feb. 7. U.S. West Texas Intermediate was trading 0.8 percent down at $52.89 a barrel, after falling as low as $52.11 earlier, its lowest since the Feb. 12.
Gold prices rallied to their highest level in more than two months as investors seek refuge in safe-haven assets amid heightened U.S.-China trade tensions, while Washington's threat of tariffs on Mexico stoked worries of a global recession. Spot gold was 0.5 percent up at $1,311.48 per ounce at 0446 GMT, having touched a high of $1,312.70 earlier, its highest since March 27. U.S. gold futures rose 0.5 percent to $1,317.50 an ounce.
Treasuries Recap
The Japanese government bond prices held largely steady, with the benchmark 10-year JGB yield held steady at minus 0.100 percent. The 10-year JGB futures were flat at 153.20. The 30-year yield gained half a basis point to 0.455 percent, while the 40-year yield was up 1.0 basis point at 0.510 percent.
The Australian government bond futures eased, with the three-year bond contract down 2.5 tick at 98.875. The 10-year contract eased 5.5 ticks to 98.475.