Friday 16th June: European Open Briefing

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Friday 16th June: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei up 0.80 %, Shanghai Composite fell 0.25 %, Hang Seng rose 0.50 %, ASX 200 gained 0.20 %
  • Commodities: Gold at $1255 (+0.05 %), Silver at $16.70 (-0.10 %), WTI Oil at $44.50 (+0.05 %), Brent Oil at $46.95 (+0.05 %)
  • Rates: US 10-year yield at 2.17, UK 10-year yield at 1.04, German 10-year yield at 0.29

News & Data

  • Bank of Japan Interest Rate -0.10 % vs -0.10 % expected
  • New Zealand Business NZ PMI 58.5 vs 56.8 previous
  • Asia stocks steady after Wall St tech rout, dollar holds gains – RTRS
  • BOJ holds policy steady, upgrades view on consumption, global growth – RTRS
  • Dollar firms on upbeat data, on track for weekly gains – RTRS
  • Oil sits near half-year lows as global supply overhang weighs – RTRS

Markets Update:

The Bank of Japan left rates and their QE programme unchanged, as expected. Traders are now waiting for the BoJ press conference. There has been speculation that BoJ Governor Kuroda could discuss a QE exit plan. This could give the Yen a boost. If Kuroda does not mention it at all, USD/JPY is likely to extend gains to 112 soon.

The US Dollar strengthened slightly against most major currencies. Gains against the Pound were limited though. The Bank of England meeting surprised traders, with only 5 of the 8 MPC members voting to keep rates unchanged. Inflation continues to rise, and so does the pressure on the central bank. The key level to watch in GBP/USD is 1.2830. A clear break above it would signal a recovery for the Pound.

The Euro fell to 1.1130 yesterday, but remains well bid overall. However, a break below 1.11 support would signal that further losses are ahead.

AUD/USD consolidated in a 0.7575-0.76 range overnight. The broad Dollar strength has slowed momentum, but the charts suggest that the AUD/USD could rise towards 0.77 in the near-term.

Upcoming Events:

  • 10:00 BST – Euro Zone CPI
  • 13:30 BST – US Housing Starts
  • 13:30 BST – US Building Permits
  • 15:00 BST – US Michigan Consumer Sentiment

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