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Home » Blogs » America’s roundup: Euro gains after Federal Open Market Committee, ahead of Thursday’s ECB meeting, Wall street falls, Oil rises as U.S. inventories fall on strong demand -june 14th,2018

America’s roundup: Euro gains after Federal Open Market Committee, ahead of Thursday’s ECB meeting, Wall street falls, Oil rises as U.S. inventories fall on strong demand -june 14th,2018

America’s roundup: Euro gains after Federal Open Market Committee, ahead of Thursday’s ECB meeting, Wall street falls, Oil rises as U.S. inventories fall on strong demand -june 14th,2018

 

Market Roundup

• Fed lifts rates amid stronger inflation, drops crisis-era guidance.

• US Jun Fed Funds Target Rate, 1.75-2%, 1.75-2% forecast, 1.5-1.75% previous.

• US May PPI Final Demand YY, 3.1%, 2.8% forecast, 2.6% previous.

• US May PPI Final Demand MM, 0.5%, 0.3% forecast, 0.1% previous.

• US May PPI exFood/Energy YY, 2.4%, 2.3% forecast, 2.3% previous.

• US May PPI exFood/Energy MM, 0.2%, 0.3% forecast, 0.2% previous.

• US Jun TR IPSOS PCSI, 59.82, 63.76 previous.

• US w/e Mortgage Market Index, 265.3, 370.8 previous.

• US w/e MBA Mortgage Applications, -1.5%, 4.1% previous.

• US w/e MBA 30-Yr Mortgage Rate, 4.83%, 4.75% previous.

• CA Jun TR IPSOS PCSI, 55.83, 53.94 previous.

• Trump says summit removed N.Korean nuclear threat; Democrats doubtful.

• Weakened, UK’s May defeats final Brexit challenges in parliament.

• Trump, Iran spar over oil prices ahead of OPEC meeting.

Looking Ahead – Economic Data (GMT)

• 13 Jun 23:50 Japan w/e Foreign Bond Investment, -1,665.8 bln previous

• 13 Jun 23:50 Japan w/e Foreign Investment JP Stock, -527.6 bln previous

• 14 Jun 01:30 Australia May Employment, 18.0k forecast, 22.6k previous

• 14 Jun 01:30 Australia May Full Time Employment, 32.7k previous

• 14 Jun 01:30 Australia May Participation Rate, 65.6% forecast, 65.6% previous

• 14 Jun 01:30 Australia May Unemployment Rate, 5.5% forecast, 5.6% previous

• 14 Jun 02:00 China May Urban Investment (ytd)yy, 7.0% forecast, 7.0% previous

• 14 Jun 02:00 China May Industrial Output YY, 6.9% forecast, 7.0% previous

• 14 Jun 02:00 China May Retail Sales YY, 9.6% forecast, 9.4% previous

• 14 Jun 04:30 Japan Apr Industrial Output Rev, 0.3% previous

• 14 Jun 04:30 Japan Apr Capacity Util Index Chg MM, 0.5% previous

Looking Ahead – Events, Other Releases (GMT)

• N/A ECB Governing Council meeting, followed by interest rate announcement (external meeting)

• 06:15 French Finance Minister Bruno Le Maire inaugurates new HQ of privacy-focused search engine Qwant in Paris

• 12:30 ECB President Mario Draghi holds a press conference, after the interest rate meeting (external meeting) in Riga, Latvia

• 14:00 Norway Central Bank’s Deputy Governor Egil Matsen gives a speech at a seminar hosted by Nordea in Oslo, Norway

• 17:00 BOE Chief Operating Officer, Joanna Place: Hosting the Fawcett Society event “Smarter Cities: The Future of Work – What Will It Mean For Women?”, Bank of England, in London

• 18:30 Federal Reserve Board holds open meeting to discuss the final rule to establish single-counterparty credit limits for large U.S. bank holding companies and foreign banking organizations, in Washingon D.C.

 

Currency Summaries

EUR/USD is likely to find support at 1.1704 levels and currently trading at 1.1788 levels. The pair has made session high at 1.1800 and hit lows at 1.1722 levels. The euro edged higher against US dollar on Wednesday after the Federal Reserve raised interest rates as expected and projected a slightly faster pace of rate hikes in the coming months. Two additional hikes are now expected by the end of this year, compared to one previously. In its decision on Wednesday, the Fed raised its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75 percent and 2 percent. The greenback’s bounce tied to the Fed’s perceived hawkish stance faded as traders booked profits in advance of the European Central Bank’s meeting on Thursday, where policy-makers may discuss the timing of winding down its 2.55-trillion-euro bond-purchase program. Some traders speculate the ECB may offer clues on its intentions to begin tapering its bond purchases this year at its upcoming meeting, while other traders reckon ECB officials may refrain from signaling changes to its stimulus program given Italy’s fragile political situation and a recent spate of disappointing data in the euro zone. The dollar index, which measures the greenback against a basket of currencies, fell 0.24 percent, the euro was up 0.41 percent to $1.1788.

GBP/USD is supported in the range of 1.3300 levels and currently trading at 1.3371 levels. It reached session high at 1.3389 and dropped to session low at 1.3306 levels. Britain’s pound declined against the dollar on Wednesday as inflation data failed to bolster chances of an interest rate increase in August with markets wary about headlines on Brexit negotiations. Consumer price inflation held at an annual rate of 2.4 percent in May, its joint-lowest since March 2017, the Office for National Statistics said on Wednesday, below economists’ forecasts in a Reuters poll of a small rise to 2.5 percent. The data did little to shake market expectations of an interest rate hike over the course of the year with money markets currently pricing in a 43 percent chance of a 25 basis point hike in August and barely one rate hike by end-2018.The British currency fell back towards the day’s lows at $1.3309, its lowest levels since June 5, though it trimmed losses after Federal Reserve rate decision. Since popping to an overnight high of $1.3424 after Prime Minister Theresa May saw off a rebellion in parliament over amendments to a bill for the country’s exit from the European Union next year, sterling weakened nearly 1 percent. Against the euro, sterling was trading 0.2 percent weaker at 88.08 pence.

USD/CAD is supported at 1.2918 levels and is trading at 1.2982 levels. It has made session high at 1.3049 and lows at 1.2952 levels. The Canadian dollar edged higher against its U.S. counterpart on Wednesday as oil prices rose and the greenback pared gains after Federal Reserve interest rate decision. The Fed raised its benchmark overnight lending rate a quarter of a percentage point to a range of between 1.75 percent and 2 percent, and dropped its pledge to keep rates low enough to stimulate the economy “for some time. The Bank of Canada has also raised interest rates once this year. Chances of another hike at its next meeting in July have eased to about 62 percent from more than 70 percent before a G7 summit in Canada at the weekend, data from the overnight index swaps market showed. U.S. President Donald Trump backed out of a joint communique agreed by Group of Seven leaders that mentioned the need for “free, fair and mutually beneficial” trade and the importance of fighting protectionism. The spat comes amid slow-moving talks between Canada, the United States and Mexico to modernize the North American Free Trade Agreement (NAFTA). The Canadian dollar was last trading 0.1 percent higher at C$1.2982 to the greenback. The currency touched its weakest level since June 5 at C$1.3050.

USD/JPY is supported around 109.81 levels and currently trading at 110.35 levels. It peaked to hit session high at 110.84 and made session lows at 110.32 levels. The U.S. dollar edged lower against the yen on Wednesday in a choppy session after the Federal Reserve raised interest rates as expected and projected a slightly faster pace of rate hikes in the coming months. In raising its benchmark overnight lending rate a quarter of a percentage point to a range of 1.75 percent to 2 percent, the Fed dropped its pledge to keep rates low enough to stimulate the economy “for some time” and signaled it would tolerate inflation above its 2 percent target at least through 2020. The ongoing economic expansion coupled with solid job growth has pushed the Fed to raise rates seven times since late 2015, rendering the language of its previous policy statements outdated. Policymakers’ fresh economic projections, also issued on Wednesday, indicated a slightly faster pace of rate increases in the coming months, with two additional hikes expected by the end of this year, compared to one previously. In late trading, the dollar was trading slightly lower against the yen at 110.35 after touching a three-week peak at 110.84.Focus now turns to policy meetings later this week at the European Central Bank and the Bank of Japan.

Equities Recap

Trading in European shares was hesitant on Wednesday as Zara owner Inditex fell after results and Just Eat was bruised by intensifying competition.

The UK’s benchmark FTSE 100 closed up by 0.19 percent, FTSEurofirst 300 ended the day up by 0.19 percent, Germany’s Dax ended up by 0.45 percent, and France’s CAC finished the up by 0.16 percent.

U.S. stocks ended lower on Wednesday after the Federal Reserve raised interest rates as expected and projected a slightly faster pace of rate hikes in the coming months.

Dow Jones closed down by 0.47 percent, S&P 500 ended down 0.41 percent, Nasdaq finished the day down by 0.11 percent.
Treasuries Recap

U.S. Treasury yields rose on Wednesday after the Federal Reserve raised interest rates as expected, and signaled two more hikes this year, citing higher inflation.

Benchmark 10-year U.S. Treasury notes last fell 6/32 in price to yield 2.9774 percent, from 2.957 percent late on Tuesday. The 30-year bond last fell 3/32 in price to yield 3.0967 percent, from 3.092 percent Tuesday.

Commodities Recap

Gold prices held steady on Wednesday after Federal Reserve raised interest rates as expected, and signaled two more hikes this year.

Spot gold was up 0.1 percent at $1,299.70 an ounce. U.S. gold futures for August delivery dipped by 0.1 percent, slipping to $1,298.10.

Oil prices turned positive on Wednesday after a bigger-than-expected decline in U.S. crude inventories along with surprise drawdowns in gasoline and distillates indicated strong demand in the world’s top oil consumer.

Brent crude settled up 86 cents, or 1.1 percent, at $76.74 a barrel and U.S. crude closed 28 cents, 0.4 percent, higher at $66.64 a barrel.

Source: FXWire Media Round Ups

 

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