Tuesday 13th June: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei up 0.05 %, Shanghai Composite gained 0.40 %, Hang Seng rose 0.60 %, ASX 200 rallied 1.15 %
  • Commodities: Gold at $1268 (-0.05 %), Silver at $16.86 (-0.50 %), WTI Oil at $46.25 (+0.40 %), Brent Oil at $48.50 (+0.40 %)
  • Rates: US 10-year yield at 2.21, UK 10-year yield at 0.96, German 10-year yield at 0.25

News & Data

  • Australia NAB Business Confidence 7.0 vs 13.0 previous
  • Australia NAB Business Survey 12.0 vs 14.0 previous
  • Japan Large Manufacturing Conditions -2.9 vs 1.5 expected
  • Asia stocks shake off U.S. tech slump, loonie jumps on rate hike prospect – RTRS
  • Dollar steadies ahead of central bank meetings; C$ hits two-month high – RTRS
  • Oil edges up on Saudi pledge to make real supply cuts – RTRS

Markets Update:

Asian stock markets recovered overnight, despite the sell-off in Europe and the US yesterday. USD/JPY followed stocks higher, and rose from 109.80 to 110.10. Further consolidation seems likely ahead of the FOMC, with strong resistance at 110.50 and solid support at 109.40/50. Generally, volatility in FX is likely to remain low ahead of the Fed rate decision.

EUR/USD is consolidating around 1.12. The ECB was not really dovish enough last week to push the Euro lower, and the pair remains well bid on dips. The charts suggest further gains are ahead, but much depends on the Fed now.

The British Pound remains under pressure amid the political uncertainty in the UK, and that is unlikely to change soon. After the break below 1.27 support, a move towards 1.25 is likely in the near-term.

The Canadian Dollar rallied yesterday, following surprisingly hawkish comments from a senior Bank of Canada official. USD/CAD is likely to test 1.32 soon. Should it break below that support level as well, the pair will likely reach 1.30 soon.

Upcoming Events:

  • 07:00 BST – German WPI
  • 09:30 BST – UK CPI
  • 10:00 BST – German ZEW Economic Sentiment
  • 10:00 BST – Euro Zone ZEW Economic Sentiment
  • 13:30 BST – US PPI
  • 23:45 BST – New Zealand Current Account

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