Global Markets:
- Asian stock markets: Nikkei up 0.60 %, Shanghai Composite gained 1.75 %, Hang Seng rallied 1.45 %, ASX 200 rose 0.30 %
- Commodities: Gold at $1349 (+0.75 %), Silver at $20.33 (+3.80 %), WTI Oil at $48.95 (-0.05 %), Brent Oil at $50.35 (-0.05 %)
- Rates: US 10 year yield at 1.47, UK 10 year yield at 0.86, German 10 year yield at -0.13
News & Data:
- Bank of Japan Tankan Survey: Sees CPI rising 0.7% a year from now (prev 0.8%)
- Bank of Japan Tankan Survey: Sees CPI rising 1.1% 3 years from now (prev 1.1%)
- Japanese Monetary Base (YoY) Jun: 25.4% (prev 25.5%)
- Japanese Monetary Base End of Period (JPY) Jun: 392.7tln (prev 386.7tln)
- Australian Melbourne Institute Inflation (MoM) Jun: 0.6% (prev -0.2%)
- Australian Building Approvals (MoM) May: -5.2% (est -3.3%, prev 3.0%)
- Australian Job Advertisements (MoM) Jun: 0.5% (prev 2.2%)
- PBOC Fixes Yuan Reference Rate at 6.6472 (prev close 6.6575)
- S&P: May lower Australia rating if parliament gridlock continues
- Moody’s: Short-lived political uncertainty to have limited credit implications for Australia – RTRS
- Australia election: Tight vote could end in hung parliament; voting resumes Tuesday – BBC
- ECB’s Coeure: Too Early to Decide How ECB Should Respond to Brexit – WSJ
- ECB’s Villeroy: UK to face inflation, recession risks due to Brexit – RTRS
CFTC Positioning Data:
- EUR 62K short versus short 61K last week. Short increased by 1K
- GBP 43K short versus short 52K last week. Shorts cut by 9K
- JPY 60K long versus long 52K last week. Longs increased by +8K on the week.
- CHF 11K long versus long 15K last week. Longs cut by -4K on the week.
- CAD 8K long versus long 3K last week. Longs increased by +5K on the week
- AUD 2K short versus short 7K last week. Shorts cut by 5K on the week
- NZD 3K short versus short 3K last week. No change on the week
Markets Update:
The Australian Dollar came under pressure in the early Asian session amid inconclusive election results and all three major US rating agencies stated earlier that this might impact Australia's credit rating. AUD/USD opened at 0.7446 in Sydney, roughly 50 pips lower from Friday's close. However, it was able to fill the gap within a couple of hours and briefly traded above 0.75.
USD/JPY benefited from rising Asian equity markets and made it from 102.45 to 102.80. EUR/USD flows were light and the pair consolidated in a 1.1125-45 range. GBP/USD was a bit more volatile as it opened at 1.3240 in Sydney, rallied to 1.3305 after the Tokyo open and then eventually fell back to 1.3280. Key resistance is now seen at 1.3350, while support lies at 1.3205 and 1.3115.
Upcoming Events:
- 09:30 BST – UK Construction PMI
- 10:00 BST – Euro Zone PPI
- 15:30 BST – Bank of Canada Business Outlook Survey
The Week Ahead:
Tuesday, July 5th
- 00:30 BST – Australian AIG Services Index
- 02:30 BST – Australian Retail Sales
- 02:45 BST – Chinese Caixin Services PMI
- 05:30 BST – RBA Rate Decision
- 08:45 BST – Italian Services PMI
- 08:50 BST – French Services PMI
- 08:55 BST – German Services PMI
- 09:00 BST – Euro Zone Services PMI
- 09:30 BST – UK Services PMI
- 10:00 BST – Euro Zone Retail Sales
- 10:30 BST – Bank of England Financial Stability Report
- 10:30 BST – Bank of England Governor Carney speaks
- 15:00 BST – US Factory Orders
- 19:30 BST – FOMC Member Dudley speaks
Wednesday, July 6th
- 07:00 BST – German Factory Orders
- 08:00 BST – ECB President Draghi speaks
- 13:15 BST – US ADP Nonfarm Employment Change
- 13:30 BST – US Trade Balance
- 13:30 BST – Canadian Trade Balance
- 14:45 BST – US Services PMI
- 15:00 BST – US ISM Non-Manufacturing PMI
- 19:00 BST – FOMC Meeting Minutes
Thursday, July 7th
- 00:30 BST – Australian AIG Construction Index
- 01:30 BST – BoJ Governor Kuroda speaks
- 06:00 BST – Japanese Leading Index
- 07:00 BST – German Industrial Production
- 08:15 BST – Swiss CPI
- 09:30 BST – UK Manufacturing Production
- 09:30 BST – UK Industrial Production
- 12:30 BST – ECB Meeting Minutes
- 13:30 BST – US Initial Jobless Claims
- 13:30 BST – Canadian Building Permits
- 15:00 BST – UK NIESR GDP Estimate
- 15:00 BST – Canadian Ivey PMI
- 15:00 BST – US Crude Oil Inventories
Friday, July 8th
- 06:45 BST – Swiss Unemployment Rate
- 07:00 BST – German Trade Balance
- 09:30 BST – UK Trade Balance
- 13:30 BST – US NFP
- 13:30 BST – US Unemployment Rate
- 13:30 BST – Canadian Employment Change
- 13:30 BST – Canadian Unemployment Rate
- 20:30 BST – CFTC Positioning Data
