America’s roundup: Dollar gains as risk appetite improves, Wall street ends higher, Gold stays at six-month low, U.S. Oil prices hit 3-1/2-yr high on concern over Iran sanctions-june 29th, 2018
• U.S. Q1 GDP Final, 2.0%, 2.2% forecast, 2.2% previous.
• U.S. Q1 GDP Sales Final, 2.0%, 2.2% forecast, 2.0% previous.
• U.S. Q1 GDP Cons Spending Final, 0.9%, 1.0% previous.
• U.S. Q1 GDP Deflator Final, 2.2%, 1.9% forecast, 1.9% previous.
• U.S. Q1 Core PCE Prices Final, 2.3%, 2.3% forecast, 2.3% previous.
• U.S. Q1 PCE Prices Final, 2.5%, 2.5% forecast t, 2.6% previous.
• U.S. Initial Jobless Claims w/e, 227k, 220k forecast, 218k previous.
• U.S. Jobless Claims 4-Wk Avg w/e, 222.00k, 221.00k previous.
• U.S. Continued Jobless Claims w/e, 1.705 mln, 1.725 mln forecast, 1.723 mln previous.
• U.S. Jun KC Fed Manufacturing, 38, 41 previous.
• U.S. Jun KC Fed Composite Index, 28, 29 previous.
• Chance for continued U.S. job gains an argument for low rates -Fed’s Bullard.
• U.S. manufacturers, steel makers battle over tariff relief.
• First Trump-Putin summit has Cold War backdrop, U.S. allies nervous.
• German inflation surpasses ECB target in June.
• Euro zone economic sentiment slips in June but above expectations.
• BoE’s Haldane says his rate hike vote shouldn’t be a surprise.
• China further eases foreign investment curbs.
• China c.bank to keep policy neutral, liquidity reasonably ample.
Looking Ahead – Economic Data (GMT)
• 28 Jun 23:30 Japan Jun CPI Core Tokyo YY, 0.6% forecast. 0.5% previous
• 28 Jun 23:30 Japan Jun CPI, Overall Tokyo, 0.4% previous
• 28 Jun 23:30 Japan May Jobs/Applicants Ratio, 1.59 forecast, 1.59 previous
• 28 Jun 23:30 Japan May High Unemployment Rate, 2.5% forecast, 2.5% previous
• 28 Jun 23:50 Japan May Industrial output prelim mm, -1.1% forecast, 0.5% previous
• 28 Jun 23:50 Japan Jun IP Forecast 1 Mth Ahead, 0.3% previous
• 28 Jun 23:50 Japan Jul IP Forecast 2 Mth Ahead, -0.8% previous
• 29 Jun 01:00 Australia Oct HIA New Home Sales m/m, -6.1% previous
• 29 Jun 01:30 Australia May Private Sector Credit, 0.4% previous
• 29 Jun 01:30 Australia May Housing Credit, 0.4% previous
• 29 Jun 05:00 Japan Jun Consumer Confidence. Index, 43.8 previous
• 29 Jun 05:00 Japan May Construction Orders YY, 4.0% previous
• 29 Jun 05:00 Japan May Housing Starts YY, -6.1% forecast, 0.3% previous
Looking Ahead – Events, Other Releases (GMT)
• N/A Participation by the ECB President Mario Draghi in European Council meeting in Brussels, Belgium
• 10:00 Bank of England’s David Bailey is due to speak on payments regulation in Britain at a conference in London
EUR/USD is likely to find support at 1.1500 levels and currently trading at 1.1563 levels. The pair has made session high at 1.1595 and hit lows at 1.1549 levels. Euro was little changed against the dollar on Thursday as conflicting signals about developments in the trade row between Washington and its business partners kept investors cautious. Though overnight headlines suggested a more conciliatory approach from Washington, broader risk appetite remained modest in the currency markets. U.S. President Donald Trump said on Wednesday he would use a strengthened national security review process to block Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions. European Union leaders meet in Brussels for two days of talks on migration that German Chancellor Angela Merkel described as “make or break” for the union. Overall, currencies remained rangebound on Thursday as mixed signals on the trade dispute between Washington and its trading partners kept sentiment subdued. On the data front, The U.S. economy slowed more than previously estimated in the first quarter amid the weakest consumer spending in nearly five years, but growth appears to have since regained momentum on the back of a robust labor market and tax cuts.Gross domestic product increased at a 2.0 percent annual rate in the January-March period, instead of the 2.2 percent pace it reported last month.
GBP/USD is supported in the range of 1.3000 levels and currently trading at 1.3074 levels. It reached session high at 1.3110 and dropped to session low at 1.3045 levels. The British pound declined to hit 8-month low against the greenback on Thursday as investors fretted that a European Union summit would underline how there has been no meaningful progress for months in negotiations on a Brexit deal.This lack of progress, combined with a series of corporate warnings this week about the effect on Britain’s economy if a deal is not agreed soon, has weighed heavily on sterling and lowered expectations of a Bank of England interest rate rise.Irish Prime Minister Leo Varadkar said on Thursday his country would have to start making preparations for the unlikely scenario of Britain crashing out of the European Union without a deal. That drove the pound down to $1.3050, an eight-month low, before comments about interest rates seen as bullish from the Bank of England’s chief economist lifted sterling somewhat. The British currency was down 0.2 percent at $1.3069 and also down 0.4 percent against the euro at 88.44 pence. Sterling’s latest drop means it has tumbled more than 9 percent since a post-Brexit referendum high in April. It has been sent lower in part by a resurgent dollar but also by worries about Britain’s economy less than a year before it departs the EU.
USD/CAD is supported at 1.3225 levels and is trading at 1.3265 levels. It has made session high at 1.3307 and lows at 1.3237 levels. The Canadian dollar strengthened against its U.S. counterpart on Thursday as Canadian dollar was supported by a recent increase in oil prices and as investors added to bets for a Bank of Canada interest rate hike next month. On Wednesday, a dovish speech and a hawkish news conference from Bank of Canada Governor Stephen Poloz whipsawed the Canadian dollar to a one-year low at C$1.3386 before it recovered ground. Chances of a rate increase at the July 11 announcement have increased to 65 percent from 55 percent before the central bank governor’s speech, data from the overnight index swaps market showed. Investors are likely to pay close attention to the Bank of Canada Business Outlook Survey and the April report for gross domestic product, both due on Friday, after Poloz reiterated the central bank’s data dependence. The price of oil, one of Canada’s major exports, steadied near a 3-1/2-year high, but supply remained tight with investors concerned by the prospect of a big fall in crude exports from Iran due to U.S. sanctions. The Canadian dollar was last trading 0.4 percent higher at C$1.3261 to the greenback. The currency traded in a range of C$1.3275 to C$1.3351.
AUD/USD is supported around 0.7319 levels and currently trading at 0.7348 levels. It hit session high at 0.7357 and made session lows at 0.7327 levels. The Australian dollar hovered near multi-month lows on Thursday as concerns about sliding asset prices in China clouded the outlook for both global growth and home-grown exports. Speculators have been selling the currencies as a liquid proxy for the Chinese yuan which has skidded to six-month lows amid mounting Sino-U.S. trade tensions. The Aussie dollar was huddled at $0.7349, having shed almost 0.7 percent overnight to $0.7323. It briefly broke the $0.7329 low from May last year and risked a retracement all the way to a $0.7160 nadir from December 2016. Trade war fears have sent U.S. stocks lower this week while sliding Chinese stocks and a weakening yuan has also raised concerns that there could be global contagion from the region. U.S. oil prices rose to a 3-1/2-year high, bolstered by supply concerns due to U.S. sanctions that could cause a large drop in crude exports from Iran. Investors are now positioning for a potentially fraught meeting of European Union leaders to discuss issues such as migration, Brexit and trade. They are also looking for indications on the survival prospects for the fractious new German coalition. The dollar index, which measures the greenback against a basket of six currencies, was up 0.08 percent at 95.34, after advancing about 1 percent over the last two sessions.
European shares slid again on Thursday as China’s retreating yuan exacerbated trade tensions and encouraged investors to sell risky assets and search for stock market safe havens.
UK’s benchmark FTSE 100 closed down by 0.01 percent, the pan-European FTSEurofirst 300 ended the day down by 0.86 percent, Germany’s Dax ended down by 1.5 percent, France’s CAC finished the day down by 1.1 percent.
U.S. stocks rose on Thursday, as losses in shares of healthcare companies, battered by Amazon’s foray into drug retailing, were offset by gains in the technology and financial sectors.
Dow Jones closed up by 0.42 percent, S&P 500 ended up by 0.63 percent, Nasdaq finished the day up by 0.80 percent.
U.S. Treasury yields edged higher on Thursday but held near one-month lows as fears about trade wars harming global growth kept up demand for safe haven bonds, while month- and quarter-end rebalancing added to bond buying.
Benchmark 10-year notes fell 6/32 in price on the day to yield 2.849 percent. Yields earlier had dropped to 2.822 percent, the lowest since May 31.
The yield curve between two-year and 10-year notes traded at 32 basis points, the flattest level since 2007.
Gold fell to its lowest level in more than six months on Thursday, as mounting pressure from trade disputes and the expectation of higher U.S. interest rates continue to weigh on bullion, despite the greenback losing steam.
Spot gold declined 0.3 percent at $1,248.04 by 1:33 p.m. EDT (1733 GMT). Earlier, it touched $1,246.60, its lowest since mid-December.
U.S. gold futures for August delivery settled down $5.10, or 0.4 percent, at $1,251 per ounce.
Oil prices climbed on Thursday, with U.S. crude hitting a three-and-a-half year high, bolstered by supply concerns due to U.S. sanctions that could cause a large drop in crude exports from Iran.
West Texas Intermediate (WTI) crude futures rose 69 cents, nearly 1 percent, to settle at $73.45 a barrel. It reached $74.03 earlier in the session, the highest since Nov. 26, 2014.Brent crude futures rose 23 cents to settle at $77.85 a barrel.
Source: FXWire Media Round Ups