Global Markets:
- Asian stock markets: Nikkei down 0.90 %, Shanghai Composite gained 0.10 %, Hang Seng rose 0.05 %, ASX 200 lost 0.95 %
- Commodities: Gold at $1216 (-0.05 %), Silver at $16.00 (+0.05 %), WTI Oil at $48.65 (-0.90 %), Brent Oil at $49.40 (-1.00 %)
- Rates: US 10 year yield at 1.85, UK 10 year yield at 1.43, German 10 year yield at 0.14
News & Data:
- Australia Retail Sales (MoM) (Apr): 0.20% (est 0.30%, prev 0.40%)
- Australia Trade Balance (AUD) (Apr): -1579m (est -2100m, prev -2163m)
- Japan Monetary Base (YoY) (May): 25.50% (Prev 26.80%)
- Japan Monetary Base End of Period (JPY) (May): 386.7trln (Prev 386.2tln)
- BOJ's Sato: Economic slowdown to continue, economy likely to avert recession
- BoJ's Sato: Negative rates might have a tightening impact on the economy, not easing
- BoJ's Sato: Expanding monetary base and negative rates are contradictory
- PBOC's Pan: China faces problem of high leverage level of companies –BBG
- PBOC's Pan: China bond market yield relatively high –BBG
- UAE Oil Minister: Not heard about plan on output target for OPEC – BBG
- UAE Oil Minister: OPEC and other nations would have to agree to any output freeze – BBG
- Yuan fixed at 6.5688 (vs 6.5889 yesterday, and prev close 6.5805)
Markets Update:
USD/JPY continues to be under pressure after Japanese PM Abe announced yesterday that the planned sales tax hike will be delayed. The pair declined from 109.70 in the early Asian session to a low of 108.83 and further losses seem likely. Support is now seen at 108.70 and 108.20.
EUR/USD has been rising slowly since it bounced off the 1.11 level. The pair reached a high of 1.1213 in Asia, although volatility is likely to remain subdued ahead of the ECB meeting later today. Support is seen at 1.1120, 1.11 and 1.1050, while resistance lies at 1.1240 and 1.13.
Brexit worries continue to keep the British Pound under pressure. GBP/USD fell to 1.4386 yesterday, down more than 300 pips since the Sunday open. It managed to bounce from there and recovered to 1.4430 in Asia.
The shift in risk sentiment had an impact on commodity currencies as well. AUD/USD fell from 0.7270 to 0.7228 in Asia, but NZD/USD managed to remain resilient and consolidated between 0.6810 and 0.6830.
Upcoming Events:
- 09:30 BST – UK Construction PMI
- 12:45 BST – ECB Rate Decision
- 13:15 BST – US ADP Nonfarm Employment Change
- 13:30 BST – ECB Press Conference
- 13:30 BST – US Initial Jobless Claims
- 14:00 BST – Bank of England Governor Carney speaks
- 15:45 BST – Bank of Canada Governor Poloz speaks
- 15:00 BST – US Crude Oil Inventories
