Global Markets:
- Asian stock markets: Nikkei up 0.10%, Shanghai Composite lost 0.10%, Hang Seng gained 0.15%, ASX 200 rose 0.30%
- Commodities: WTI Oil at $46 (0.20%), Brent Oil at $48.35 (0.20%), Gold at $1216 (-0.20%), Gold at $1216 (-0.10%), Silver at $15.60 (-0.40%)
- Rates: US 10 year yield at 2.36, UK 10 year yield at 1.30, German 10 year yield at 0.60
News & Data:
- Japan Capacity Utilization (M/M) May: -4.10% (Prev 4.30%)
- Japan Industrial Production (M/M) May F: -3.60% (Prev -3.30%)
- Japan Industrial Production (Y/Y) May F: 6.50% (Prev 6.80%)
- New Zealand Business Manufacturing PMI: 56.2 (Rev Prev 58.2)
- PBoC Fixes USDCNY Reference Rate At 6.7774 (Prev 6.7802)
Markets Update:
Markets remained relatively quiet ahead of today’s US CPI release. Recent US inflation data has been rather weak, so today’s numbers will be important and could determine the short-term direction of the US Dollar.
Commodity currencies are performing well. The Australian Dollar broke above a major resistance level at 0.7730, which signals that it could test 0.7850 soon. The New Zealand Dollar also caught a bid and rallied back above 0.73. Meanwhile, a rise in oil prices is giving the Canadian Dollar additional support. USDCAD is moving back towards 1.27. The charts suggest the pair could test 1.25 in the near-term.
EURUSD retraced a bit yesterday, but demand below 1.14 proved to be strong. Further gains are likely. Should US data disappoint today, the Euro should have no difficulties clearing the resistance at 1.15.
Upcoming Events:
- 10:00 BST – Euro Zone Trade Balance
- 13:30 BST – US CPI
- 13:30 BST – US Retail Sales
- 14:15 BST – US Industrial Production
- 15:00 BST – US Michigan Consumer Sentiment
