Gold and oil rise, European indices rise, U.S. stocks close up moderately, yen falls to two month low
A raft of Japanese data, with certain high impact releases missing their forecasts, caused USD/JPY to fall by approx 0.3% to the 114 handle, during Monday’s trading sessions, to reach a low not witnessed since May 11th. New machine orders in Japan fell to 0.6% growth YoY, missing the forecast of 7.6% growth, whilst the trade balance came in at -115b yen for May, versus the expectation of a -45b yen deficit. Confidence in the Japanese economy was further eroded by finance minister Kuroda implying that he still views an accommodative policy as the default position, should the Japanese economy show any signs of further weakness. Other high impact Asian news came from China; new loans in yuan advanced month on month, whilst CPI came in below forecast at 1.5%, but unchanged from May’s reading.
Europe opened the week’s trading with a significant improvement in Germany’s exports, which grew by 1.4% in the month of May, ahead of the forecast of a 0.3% gain. The trade balance also beat forecast, coming in at €22b for May and the current account surplus also improved significantly to €17.3b for May. The Eurozone Sentix index also inched ahead; up to 28.3, beating the forecast of 28.1. The euro experienced mixed fortunes versus its main peers during Monday’s trading sessions; EUR/USD was virtually flat, finally resting on the daily pivot point, closing out the day at circa 1.1398. EUR/JPY closed the day out up marginally, with yen coming under pressure versus all of its peers. The euro did make significant gains versus Swissie, as did many currencies; EUR/CHF breaching R2 in the New York session, retracing slightly, to end the day at approx. 1.100.
USD/CHF made gains, threatening R2, giving up some gains to end the day close to R1, up circa 0.5% at 0.9656. GBP/USD ended the day down marginally, down circa 0.1% at 1.2879. With the exception of GBP/CHF, sterling followed a similar pattern of small losses versus the majority of its peers. European equities enjoyed gains during Monday’s trading sessions; STOXX 50 closing up 0.41%, DAX up 0.46%, CAC up 0.40% and the UK’s FTSE up 0.26%.
Looking towards the USA markets, with the exception of NASDAQ, the main markets ended the day effectively flat; DJIA down 0.03% and SPX up 0.09%, NASDAQ up 0.38%. WTI crude added 0.5% to settle at $44.62 a barrel, recovering from breaching S1 at a low of $43.75, after falling by 2.8% on Friday. Gold climbed by approx. 0.4% to $1,214 an ounce, after reaching its lowest level since March. The precious metal’s value is still significantly below the daily time frame’s 200 SMA, at 1231.
Economic calendar events for July 11th, all times quoted are London GMT time
09:00, currency impacted GBP. BOE’s Andy Haldane speaks in London. With the subject of Brexit dominating the UK’s politics and recent UK hard economic data being weak, the UK’s central bank representative’s comments will be closely monitored.
10:00, currency impacted USD. NFIB Small Business Optimism (JUN). The forecast is for little change in the reading, to 104.4, from the 104.5 reading from May.
11:00, currency impacted GBP. BOE’s Ben Broadbent speaks in Aberdeen. Another UK central banker will be holding court in Scotland, clues as to the economic, management direction and any forward guidance, will be looked for by the attended guests.
12:15, currency impacted CAD Housing Starts (JUN). Housing starts are predicted to have risen moderately to 200k, from 194.6k.
14:00, currency impacted USD. JOLTS Job Openings (MAY). The forecast is for a slight drop in job openings to 5925, from the 6044 figure for April.
14:00, currency impacted USD. Wholesale Inventories (MAY F). The prediction is for the figure of 0.3% to remain unchanged, from the same figure registered in April.
14:00, currency impacted USD. Wholesale Trade Sales (MoM) (MAY). Wholesale trade sales shrunk by -0.4% in April, an improvement will be expected for May’s reading.
16:30, currency impacted USD Fed’s Brainard Speaks on Monetary Policy in New York. With the beige book being published later in the week, analysts and investors will pay close attention to the series of appearances by Fed officials this week.