Posted at 23 June 2021 / Categories Market Roundups
Market Roundup
•Canada Apr Retail Sales (MoM) -5.7%, -5.0% forecast, 3.6% previous
•US Current Account (Q1) -195.7B, -206.8B forecast, -188.5B previous
•Canada Apr Core Retail Sales (MoM) -7.2%, -5.0% forecast, 4.3% previous
•US Jun Services PMI 64.8,70.0 forecast, 70.4 previous
•US Manufacturing PMI 62.6, 61.5 forecast ,62.1 previous
•US Jun Markit Composite PMI 63.9,68.7 previous
•US May New Home Sales (MoM) -5.9%,-5.9% previous
•US May New Home Sales 769K, 870K forecast , 863K previous
•US Gasoline Inventories -2.930M,0.833M forecast , 1.954M previous
•US Crude Oil Inventories -7.614,-3.942M forecast , -7.355M previous
Looking Ahead - Economic Data (GMT)
•23:50 Japan Foreign Bonds Buying 410.6B previous
•23:50 Japan Foreign Investments in Japanese Stocks -33.2B previous
•23:50 Japan Corporate Services Price Index (CSPI) (YoY) 1.0% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro edged lower against dollar on Wednesday as two Federal Reserve officials said a period of high inflation in the United States could last longer than expected, a day after Fed chief Jerome Powell downplayed mounting price pressures. Atlanta Fed President Rafael Bostic said that this year's expected growth rate is 7%, and inflation is much higher than the Fed's 2% target. He now expects interest rates to rise later in 2022. The dollar index rose 0.06% to 91.798, but remains below the two-month high of 92.408 reached on Friday. The euro fell 0.10% to $ 1.1920. Immediate resistance can be seen at 1.1966(38.2% fib), an upside break can trigger rise towards 1.2000 (Psychological level).On the downside, immediate support is seen at 1.1909(5DMA), a break below could take the pair towards 1.1885(23.6%fib).
GBP/USD: Sterling strengthened against the dollar on Wednesday, as sterling continued to recovery after it fell in the wake of last week’s Federal Reserve meeting. Recent movements in the pound have been dollar-driven, as investors price in earlier than expected asset purchase tapering from the Federal Reserve, after the U.S. central bank signalled last week higher rates in 2023. By 12:15 GMT, sterling was 0.3% higher at $1.3988. It was also up 0.3% against the euro at 85.35 pence, its highest level since April 6. Immediate resistance can be seen at 1.4000 (Psychological level),an upside break can trigger rise towards 1.4071 (61.8%fib).On the downside, immediate support is seen at 1.3917 (38.2%fib), a break below could take the pair towards 1.3844 (23.6%fib).
USD/CAD: The loonie was little changed against its U.S. counterpart on Wednesday, holding onto this week's gains as oil rose, and Federal Reserve Chairman Jerome Powell reassured markets that the U.S. Federal Reserve will not rush interest rates . As the Fed took a more aggressive stance, the market was volatile last week, but Powell said on Tuesday that it will take longer for the economy to recover from the COVID 19 crisis before higher borrowing costs become reasonable, which puts pressure on the US dollar. The Canadian dollar was trading nearly unchanged at 1.2306 to the greenback .Immediate resistance can be seen at 1.4117 (Daily high), an upside break can trigger rise towards 1.42569 (Higher BB).On the downside, immediate support is seen at 1.4047 (9 DMA), a break below could take the pair towards 1.3986 (55 DMA).
USD/JPY: The dollar strengthened against the Japanese yen on Wednesday as strong manufacturing data lifted dollar. A measure of U. factory activity rose to a record high in June, but manufacturers are still struggling for raw materials and skilled labor, raising prices significantly for both businesses and consumers. Data firm IHS Markit said on Wednesday its flash U.S. manufacturing PMI rose to a reading of 62.6 this month. The survey was conducted between June 10 and June 22. Economists polled had forecast the index slipping to 61.5. Strong resistance can be seen at 110.84(23.6%fib), an upside break can trigger rise towards 111.09(Daily high).On the downside, immediate support is seen at 110.55 (Daily low), a break below could take the pair towards 110.28(38.2%fib).
Equities Recap
European stocks remained below record highs on Wednesday as inflation concerns overshadowed data showing a surge in business activity in June while French luxury goods stocks fell on a downgrade from HSBC.
UK's benchmark FTSE 100 closed down by 0.22 percent, Germany's Dax ended down by 1.15 percent, France’s CAC finished the day down by 0.91 percent.
The Nasdaq climbed to a record close on Wednesday, fueled by a rally at Tesla Inc, while the S&P 500 fell, amid investors applauding US data, which showed a record spike in US factory activity in June.
Dow Jones closed down by 0.21% percent, S&P 500 closed down by 0.11 % percent, Nasdaq settled up by 0.13% percent.
Treasuries Recap
Ten-year government bond yields rose but remained below 1.5% in quiet trading Wednesday, a day after Fed chairman Jerome Powell reiterated the central bank's view in a congressional hearing that the rise in inflation is likely to be temporary.
The yield curve, a measure of expectations for economic development, has hardly changed. The spread between 5- and 30-year Treasury yields rose to 122.90 basis points, well above the 107.80 it hit on Monday.
Commodities Recap
Gold gained on Wednesday, fueled by the comforting words of Federal Reserve Chairman Jerome Powell, who said inflation will not be the only determinant of interest rate decisions and that the central bank will not rush to hike rates.
Spot gold rose 0.3% to $1,782.96 per ounce by 1:42 p.m. EDT (1742 GMT). U.S. gold futures settled up 0.3% at $1,783.40.
Oil prices rose on Wednesday, with Brent crude oil soaring above US$76 per barrel, the highest level since the end of 2018 after data showed that US crude oil inventories dipped as tourists travel increased.
Brent crude rose 38 cents, or 0.5%, to end the session at $75.19 a barrel.Its session high, $76.02 after the EIA data, was the highest since October 2018. U.S. West Texas Intermediate added 23 cents, or 0.3%, to settle at $73.08after hitting $74.25, also the highest since October 2018.