Global Markets:
- Asian stock markets: Nikkei down 1.40 %, ASX 200 down 0.55 %, Shanghai Composite and Hang Seng closed for holiday
- Commodities: Gold at $1266 (+0.30 %), Silver at $17.20 (+1.30 %), WTI Oil at $51.55 (+0.60 %), Brent Oil at $52.70 (+0.35 %)
- Rates: US 10 year yield at 1.69, UK 10 year yield at 1.25, German 10 year yield at 0.06
News & Data:
- China CPI (YoY) May: 2.0% (est. 2.20%, prev. 2.30%)
- China CPI (MoM) May: -0.5% (est. -0.2%)
- China PPI (YoY) May: -2.8% (est. -3.20%, prev. -3.40%)
- China PPI (MoM) May: 0.5%
- UK RICS House Price Balance May: 19% (est. 35%, prev. 41%)
- Japan Machine Orders (MoM) Apr: -11.0% (est. -3.00%, prev. 5.50%)
- Japan Machine Orders (YoY) Apr: -8.2% (est. -1.80%, prev. 3.20%)
- Japan Money Stock M2 (YoY) May: 3.4% (est. 3.30%, prev. 3.30%)
- Japan Money Stock M3 (YoY) May: 2.8% (est. 2.70%, prev. 2.70%)
- RBNZ keep OCR on hold at 2.25%
- RBNZ say further easing may be required
- RBNZ: NZD is too high; many uncertainties around outlook; expects inflation to strengthen on easy monetary policy
- RBNZ's Wheeler: A Fed rate hike would be helpful, RBNZ's NZD outlook assumes a stronger USD
- RBNZ's Wheeler: We have room to move on interest rates if we need to
- PBOC sets USD/CNY mid-point at 6.5593 (prev. close 6.5710, prev fix 6.5593)
Markets Update:
The New Zealand Dollar was the best performing currency overnight, after the RBNZ left rates unchanged and the statement was less dovish than expected by the market. NZD/USD rallied from 0.70 to a high of 0.7147. AUD/NZD fell below 1.06 immediately after the announcement and later extended losses to 1.0440. The AUD/NZD flows put the Australian Dollar under pressure, with AUD/USD declining from 0.75 to 0.7460.
USD/CAD remains weak amid rising oil prices, but stabilized overnight and traded within a 1.2670-95 range. The pair managed to bounce off the 1.2655 support level, but techs remain bearish. Resistance is seen at 1.2720 and 1.2760.
EUR/USD consolidated between 1.1390 and 1.1415 in Asia. Meanwhile, GBP/USD volatility remains high as the date of the Brexit vote is getting closer. Yesterday, the pair declined from 1.4570 to 1.4500 in the late NY session. In Asia, it initially rose back to 1.4520, but then came under renewed selling pressure and fell sub-1.45.
Upcoming Events:
- 06:45 BST – Swiss Unemployment Rate
- 07:00 BST – German Trade Balance
- 08:00 BST – ECB President Draghi speaks
- 09:30 BST – UK Trade Balance
- 13:30 BST – US Initial Jobless Claims
- 13:30 BST – Canadian New Housing Price Index
- 14:45 BST – US Bloomberg Consumer Confidence
- 16:15 BST – Bank of Canada Governor Poloz speaks
