MORNING ROLL CALL
Yen strengthens versus all its major peers, USA equities fall for second day, oil rises, gold rises; for the third day in series
In a relatively quiet day for high impact calendar news events, yen rose versus all its major peers on the basis of very little FX news relating to Japan. The rise was more likely due to global political tensions and could relate to the significant and serious tensions arising between Saudi Arabia and Qatar, with many of Qatar’s Middle East neighbours cutting off diplomatic ties and commercial trading routes for both aircraft and sea tankers.
Investors may have also piled into what they perceived to be “safe-haven assets”, due to worries over: Britain’s general election, the European Central Bank’s policy meeting and the former FBI Director James Comey, who’s scheduled to give testimony before a USA government Senate panel, all three events will take place on Thursday, or “super Thursday” as it’s currently being termed.
USD/JPY ended the day down approx. 1%, having crashed through S3, to circa 109.45. EUR/JPY ended the day closing out at circa 123.39, down approx. 0.8%. Similar patterns in yen were observed versus: Swissie, sterling and the Canadian Loonie. EUR/USD ended the day resting on R1, at approx 1.1276, up circa 0.2%. GBP/USD ended the day at approx. 1.2906, flat on the day, and resting on the daily pivot point.
The USA economy did produce some highly positive news in the form of job openings’ data, or “JOLTS”, as the calendar event is referred to on our economic calendar; the Job Openings and Labor Turnover Survey indicated that there were just over six million job vacancies in the USA in April, a record high. However, in a strange dislocation to this highly positive news, the vacancies filled number fell to 5.05m from 5.3m, the hiring rate eased to 3.5% from 3.6%. 3.03m Americans quit their jobs, down from 3.14m in March. There are currently 1.2 people chasing every job in the USA, versus the 1.9 figure witnessed at the peak of the recession, back in 2007-2008.
Despite this overall optimistic vista, the DJIA closed down 0.23%, the SPX down 0.28% and NASDAQ down 0.33%. WTI oil spiked by circa 1.5%, to close out the day at approx, naturally the issues with Qatar and the knock on disruptive effects which could be experienced if the tensions escalate, caused the rise, oil ended the day at circa $47.8. Gold closed the day out at circa $1292, breaching R3 and up circa 1.2%, it’s safe haven appeal, during uncertain geo political times, remains one of its outstanding qualities.
European calendar news is still dominated by the UK’s approaching general election on Thursday, however, economic calendar news focused on the Eurozone and various Markit PMIs for Italy, France and Germany, which either came in right on forecast, or beat predictions. Eurozone retail sales growth came in at 2.5% YoY, whilst the Sentix index came in at 28.4, beating the forecast of 27.4. European equities suffered a sell off on Tuesday; STOXX 50 down 0.72%, DAX down 1.04%, CAC down 0.73% and the UK’s FTSE down 0.01%.
Economic calendar events scheduled for June 7th, all times are London GMT time.
01:30, currency impacted AUD. Gross Domestic Product (QoQ) (1Q). The prediction is for monthly GDP to fall to 0.3%, from the 1.1%, recorded in the last Q of 2016.
01:30, currency impacted AUD. Gross Domestic Product (YoY) (1Q). Australia’s YoY GDP is forecast to crash to 1.6%, from the 2.4% recorded in Q4 2016.
07:30, currency impacted EUR. Markit Germany Construction PMI (MAY). The previous reading in April was 54.6, there is little expectation for change.
08:10, currency impacted EUR. Markit Germany Retail PMI (MAY). There’s little expectation for a change, from the 56.2 figure recorded in April.
09:00, currency impacted EUR. OECD Economic Outlook. This key report could impact the value of the euro and Eurozone equity markets.
14:30, currency impacted USD. DOE U.S. Crude Oil Inventories (JUN 02). Crude inventories are anticipated to fall by -3500k, from the -6428k fall last week.
19:00, currency impacted USD. Consumer Credit (APR). The forecast is for credit to fall to $15.000, from the $16.431b figure published in March.
23:50, currency impacted JPY. Gross Domestic Product annualised (1Q F). The expectation is for Japan’s GDP data to rise to 2.4%, from the 2.2% figure published in Q4 2016.
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