Monday 18th June: Asian markets lower as US and China lock horns

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Monday 18th June: Asian markets lower as US and China lock horns 1

Global Markets:

  • Asian Stock Markets : Nikkei down 0.83%, ASX up 0.32%
  • Commodities : Gold at $1281.90 (+0.27%), Silver at $16.52 (+0.24%), Brent Oil at $72.75 (-0.94%), WTI Oil at $63.64 (-1.87%)
  • Rates : US 10-year yield at 2.906, UK 10-year yield at 1.329, Germany 10-year yield at 0.402

News & Data:

  • (USD) Prelim UoM Consumer Sentiment 99.3 vs 98.5 expected
  • (USD) Industrial Production m/m -0.10% vs 0.20% expected
  • (USD) Capacity Utilization Rate 77.90% vs 78.10% expected
  • (USD) Empire State Manufacturing Index 25 vs 19.1 expected
  • (CAD) Manufacturing Sales m/m -1.30% vs 0.60% expected
  • (CAD) Foreign Securities Purchases 9.13B vs 5.49B expected
  • (EUR) Final CPI y/y 1.90% vs 1.90% expected
  • China decides to impose additional tariffs on 50 bln USD of U.S. imports
  • Abe: N.Korea Leader Kim Jong Un Showed Leadership To Get Summit With Trump – Hope China Will Improve Transparency Of Defense Policies
  • Tokyo stocks fall in morning on strong earthquake in Osaka area

CFTC Positioning Data (Week Ending June 12th, 2018)

  • EUR long 88K vs 89K long last week. Longs trimmed 1K
  • GBP long 11K vs 7K long last week. Longs increased by 4K
  • JPY long 5K vs 3K short last week. 8K new longs shift position to net long.
  • CHF short 37K vs 39K short last week.  Shorts trimmed 2K
  • CAD short 15K vs 16K short last week. Shorts trimmed by 1K
  • AUD short 15k vs 20K short last week.  Shorts trimmed 5K
  • NZD long 7K vs 4K long last week. Longs increased by 3K

Markets Update:

Asian stock markets are in negative territory on Monday amid an escalation in trade tensions between the U.S. and China after the world's two largest economies announced tit-for-tat trade tariffs last week. In addition, weak commodity prices weighed on resources stocks. C Fears of a global trade war added to pressure on oil prices, which extended Friday’s big fall, while the dollar retreated from near 3-week highs against the safe haven yen.

Markets in China, Hong Kong and Taiwan were closed Monday for the Dragon Boat festival holiday while much of Southeast Asia returned after a Friday holiday. Japan stocks fared the worst early, with the Nikkei down 0.8% following its ongoing strength in recent weeks and after a much-bigger-than-expected May trade deficit. However, export data looked stronger than expected, only to be overshadowed by concerns over growing protectionism.

Oil prices were under pressure on fears of increased supply as two big producers – Saudi Arabia and Russia – have indicated they were prepared to increase output. U.S. crude futures took an additional hit also as China’s retaliatory tariffs included crude oil.

In the currency market, the dollar was supported for now as the euro has lost steam after the European Central Bank had suggested on Thursday it would hold off raising interest rates through the summer of next year. The Japanese currency stayed resilient following a deadly earthquake that struck Western Japan, including Osaka, the country’s second largest urban area. The Australian dollar, a liquid hedge for risk, slipped to a six-week trough while its New Zealand cousin fell to the lowest since end-May.

Upcoming Events:

Monday, June 18th 2018  

  • 06:00 PM GMT – (USD) FOMC Member Bostic Speaks
  • 06:30 PM GMT – (EUR) ECB President Draghi Speaks
  • 09:00 PM GMT – (USD) FOMC Member Williams Speaks

Tuesday, June 19th 2018

  • 02:30 AM GMT – (AUD) Monetary Policy Meeting Minutes
  • 02:30 AM GMT – (AUD) HPI q/q
  • 09:00 AM GMT – (EUR) ECB President Draghi Speaks
  • 01:30 PM GMT – (USD) Building Permits
  • 01:30 PM GMT – (USD) Housing Starts
  • Tentative – (NZD) GDT Price Index
  • 11:45 PM GMT – (NZD) Current Account

Wednesday, June 20th 2018

  • 01:30 PM GMT – (USD) Current Account
  • 02:30 PM GMT – (AUD) RBA Gov Lowe Speaks
  • 02:30 PM GMT – (EUR) ECB President Draghi Speaks
  • 02:30 PM GMT – (JPY) BOJ Gov Kuroda Speaks
  • 02:30 PM GMT – (USD) Fed Chair Powell Speaks
  • 03:00 PM GMT – (USD) Existing Home Sales
  • 03:30 PM GMT – (USD) Crude Oil Inventories
  • 11:45 PM GMT – (NZD) GDP q/q

Thursday, June 21st 2018

  • 05:30 AM GMT – (CHF) SNB Financial Stability Report
  • 08:30 AM GMT – (CHF) Libor Rate
  • 08:30 AM GMT – (CHF) SNB Monetary Policy Assessment
  • 09:30 AM GMT – (CHF) SNB Press Conference
  • 09:30 AM GMT – (GBP) Public Sector Net Borrowing
  • Tentative – (All) OPEC-JMMC Meetings
  • 10:45 AM GMT – (EUR) German Buba President Weidmann Speaks
  • 12:00 PM GMT – (GBP) MPC Official Bank Rate Votes
  • 12:00 PM GMT – (GBP) Monetary Policy Summary
  • 12:00 PM GMT – (GBP) Official Bank Rate
  • 12:00 PM GMT – (GBP) Asset Purchase Facility
  • 12:00 PM GMT – (GBP) MPC Asset Purchase Facility Votes
  • 01:30 PM GMT – (USD) Philly Fed Manufacturing Index
  • 01:30 PM GMT – (USD) Unemployment Claims
  • 09:15 PM GMT – (GBP) BOE Gov Carney Speaks

Friday, June 22nd 2018

  • 08:00 AM GMT – (EUR) French Flash Manufacturing PMI
  • 08:00 AM GMT – (EUR) French Flash Services PMI
  • 08:30 AM GMT – (EUR) German Flash Manufacturing PMI
  • 08:30 AM GMT – (EUR) German Flash Services PMI
  • 09:00 AM GMT – (EUR) Flash Manufacturing PMI
  • 09:00 AM GMT – (EUR) Flash Services PMI
  • All Day GMT – (All) OPEC Meetings
  • 01:30 PM GMT – (CAD) CPI m/m
  • 01:30 PM GMT – (CAD) Core Retail Sales m/m
  • 01:30 PM GMT – (CAD) Common CPI y/y
  • 01:30 PM GMT – (CAD) Median CPI y/y
  • 01:30 PM GMT – (CAD) Retail Sales m/m
  • 01:30 PM GMT – (CAD) Trimmed CPI y/y

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