Thursday 4th June: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei up 0.30 %, Shanghai Composite down 1.80 %, Hang Seng lost 1.50 %, ASX fell 1.35 %
  • Commodities: Gold at $1184 (-0.05 %), Silver at $16.48 (-0.05 %), WTI Oil at $59.65 (-0.05 %), Brent Oil at $63.75 (-0.10 %)
  • Rates: US 10 year yield at 2.37, UK 10 year yield at 2.10, German 10 year yield at 0.89

News & Data:

  • Australia Retail Sales 0.0 %, Expected: 0.4 %, Previous: 0.2 %
  • Australia Trade Balance -A$3.88bln, Expected: -A$2.25bln, Previous: -A$1.23bln
  • Fed's Bullard Says Q1 Economic Data Weakeness Transitory, Impacted By Residual Seasonality; Fed Is Data Dependent, Objectives Are Close
  • China shares sink, euro rides high as yields spike – RTRS
  • Oil prices dip as crude glut overshadows strong fuel demand – RTRS
  • Australian Retail Stagnates as Trade Deficit Blows Out to Record – BBG

Markets Update:

While there was not much new from ECB President Draghi yesterday, the bond market got nervous and German bond yields spiked higher. The 10 year yield was close to reaching 0.00 % just a few months ago and now it is almost back at 1.00 %. This has helped the Euro rally as well, with EUR/USD reaching a high of 1.1280.

Overnight, the main data release was Australian retail sales data. It missed expectations, arriving at 0.0 % vs 0.4 % expected. This led to AUD selling from leveraged names and AUD/USD dropped from 0.7780 to 0.7710. The 1.0900/10 resistance area in AUD/NZD held very well on the recent test, with AUD/NZD now back in the mid-1.08s.

Looking ahead, there are no important data releases in the upcoming EU session. The Bank of England will decide on interest rates at 12:00 BST, but no change is expected, as usual. In the US session, it could get more interesting with US Initial Jobless Claims and the Canadian Ivey PMI.

Upcoming Events:

  • 12:00 BST – Bank of England Rate Decision
  • 13:30 BST – US Initial Jobless Claims
  • 15:00 BST – Canadian Ivey PMI
  • 17:00 BST – FOMC Member Tarullo speaks


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