Wednesday 3rd June: European Open Briefing

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Wednesday 3rd June: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei fell 0.30 %, Shanghai Composite declined 1.00 %, Hang Seng gained 0.75 %, ASX dropped 0.90 %
  • Commodities: Gold at $1193 (-0.15 %), Silver at $16.76 (-0.25 %), WTI Oil at $60.85 (-0.70 %), Brent Oil at $65.10 (-0.70 %)
  • Rates: US 10 year yield at 2.27, UK 10 year yield at 1.96, German 10 year yield at 0.71
     

News & Data:

  • Australia GDP 0.9 % q/q, Expected: 0.7 %, Previous: 0.5 %
  • Australia GDP 2.3 % y/y, Expected: 2.1 %, Previous: 2.5 %
  • Australia AIG Services Index 49.6, Previous: 49.7 %
  • China HSBC Services PMI 53.5, Expected: 53.3, Previous: 52.9
  • Australian Treasurer Hockey: GDP figures are good, solid result for the economy
  • BoJ's Shirai: Low possibility of more BoJ easing at this point; expects CPI to hit 2% end of 2016, move below in 2017
  • Greek PM Tspiras to meet with EU's Juncker in Brussels tomorrow night
     

Markets Update:

The Australian Dollar rallied overnight, gaining another 0.25 % against the US Dollar. GDP numbers beat expectations, which led to further short covering in AUD/USD and pushed the pair towards 0.7820. A better than expected Chinese services PMI release added to the positive sentiment. Meanwhile, the US Dollar remains weak across the board after a sharp move yesterday that left many traders confused. It all started in the bond markets, where German yields rallied, and then spilled over into the currencies market. EUR/USD, which reached a low of 1.09 yesterday morning, ended the day near 1.12. The main reasons mentioned were upbeat Euro Zone economic data and optimism on a deal with Greece this week, but it is more likely to be a case of position covering ahead of the ECB.

USD/JPY had a sharp reversal after breaching 125 yesterday and the pair has posted a bearish engulfing pattern on the daily. The move does look overextended in the short-term, so a further retracement seems likely. Immediate support seen at 123.60, major support at 122.80/123.00.

Upcoming Events:

  • 08:15 BST – Spanish Services PMI
  • 08:45 BST – Italian Services PMI
  • 08:50 BST – French Services PMI
  • 08:55 BST – German Services PMI
  • 09:00 BST – Euro Zone Services PMI
  • 09:30 BST – UK Services PMI
  • 10:00 BST – Euro Zone Retail Sales
  • 10:00 BST – Euro Zone Unemployment Rate
  • 12:45 BST – ECB Rate Decision
  • 13:15 BST – US ADP Nonfarm Employment Change
  • 13:30 BST – US Trade Balance
  • 13:30 BST – ECB Press Conference
  • 14:45 BST – US Services PMI
  • 16:00 BST – US ISM Non-Manufacturing PMI
  • 19:00 BST – US Beige Book

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