An eventful Asian-affair, with a plenty of macro news reported from the Asia-pac regions while moderate risk-aversion persisting amid escalating trade fears. Broad-based US dollar weakness was the main underlying theme across the fx space this Wednesday, in the wake of flattening Treasury yield curve combined with holiday-thinned trading. The US markets are closed today in observance of Independence Day.
Among the G10 currencies, the Aussie continued to lead the show, followed by its OZ neighbor Kiwi, as upbeat Australian retail sales and China services PMI data underpinned the sentiment. The USD/JPY pair was stuck in a tight range around mid-110s, as negative Asian equities and Treasury yields dented the appetite for risk.
On the commodities front, oil prices steadied near multi-year highs while gold prices consolidate its recovery below $ 1260 levels.
Main topics in Asia
China pushing EU for anti-US alliance on trade – Reuters
As reported by Reuters, China is applying pressure on the European Union to issue a joint statement decrying US President Donald Trump over his current trade policies.
Australia’s trade surplus unexpectedly shrinks to AUD 827 mln in May
Australia’s trade surplus shrunk to AUD 827 million in May from the April surplus of AUD 977 million, according to Australian Bureau of Statistics (ABS).
Australia retail sales steady at 0.4 percent in May, beat estimates
Australia’s consumption, as represented by retail sales, steadied in the month of May, beating estimates, the Australian Bureau of Statistics (ABS) reported on Wednesday.
China’s Caixin services PMI rises to 53.9 in May, a big beat
China’s Caixin services PMI for June came in at 53.9 vs 52.7 exp and 52.9 last, which showed that Chinese business activity continued to expand at the end of the second quarter.
USD/CNH extends slide on PBOC jawboning, rumored intervention
The pair has found acceptance below the 100-hour moving average (MA) and could extend the decline further as the 14-day relative strength index (RSI) is still flashing overbought conditions.
EU weighs international talks on cutting car tariffs – FT
The Financial Times quoted three European Union (EU) diplomats briefed on the initiative, as saying that the EU is considering talks on a tariff-cutting deal between the world’s big car exporters to prevent an all-out trade war with the US.
Key Focus ahead
We have a busy EUR calendar for today, with a slew of services PMI reports slated for release from the Euro area economies from 7.15 GMT onwards. The UK services PMI report will be also eyed, with an unchanged reading of 54.0 expected in June. Meanwhile, holiday-thinned light trading will prevail in the day ahead, with the US traders out on a National holiday.
EUR/USD stuck in a rut below 1.17 ahead of European PMIs, US holiday
The pair has continued to grind higher in the early Wednesday session, clipping into a high of 1.1675, but the market is seeing a minor renewal in Dollar bidding, testing the EUR/USD’s current stance.
GBP/USD: Focus on UK services PMI and 30-day MA hurdle
The GBP/USD pair has likely found a bottom at 1.3049, the bullish divergence of the 14-day RSI indicates and could cross the stiff resistance of 30-day MA if the UK services PMI prints above estimates.
Key US data coming up: eyes on FOMC minutes – Nomura
Analysts at Nomura offered a preview of the next key data events from the US.
BMO Capital Markets gave their latest 2018 forecasts for the major currency pairs EUR/USD, USD/JPY, and USD/CAD.
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