Forex - US North American Summary and Highlights 21 Jun


 20:06 (GMT) 21 Jun

  [Forex Highlights]

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Overview

US North American Summary and Highlights 21 Jun (0101-MBTM-C04)

Some improvement in Eurozone PMIs saw EUR/USD higher while UST yields corrected higher as Middle East tensions eased somewhat.

News highlights

- US Jun Flash Markit PMI fell to 50.1 from 50.5 vs 50.5 exp, services fell to 50.7 from 50.9 vs 51.0 exp.

- US May existing home sales +2.5% to 5.34m vs 5.30m exp.

- Fed's Clarida said case for providing accommodation has increased, Brainard said downside risks argue for softening path of rates. Bullard said he wanted an insurance cut, Kashkari said he would have eased by 50bps.

Currencies:

US North American Summary and Highlights 21 Jun (0101-MBTM-C01)

EUR/USD saw an early move above 1.13 as the French PMI beat expectations, the flash composite up to 52.9 from 51.2 with consensus flat. German manufacturing PMI was also 1 point better than consensus. However the Eurozone PMI underwhelmed, with just a 0.3 point beat and with future expectations dropping to Nov 2014 lows.

EUR/USD found fresh buyers around 1.13 and gained momentum through 1.1350 in the North American afternoon as equity strength faded and Fed talk proving dovish. US market PMIs were marginally weaker but existing home sales firmer.

US North American Summary and Highlights 21 Jun (0101-MBTM-C02)

GBP erased losses versus the USD, but not versus the EUR.

Easing Middle East tensions saw some USD/JPY shortcovering but as equities came off their highs, so did USD/JPY, from its high of 107.73.

Oil was marginally higher but USD/CAD moved back above 1.32 after again finding buyers near 1.3150, disappointment on Canadian retail sales, up by only 0.1%, helping. AUD/USD found support around .69.

Bonds:

US North American Summary and Highlights 21 Jun (0101-MBTM-C03)

Encouraged by a touch of relief at no US Iran strikes, USTs finish the week paring back the overstretching rally, 10s bouncing on the move back above 2% and short end to belly especially on the recovery of 1.75%. PMIs slipped but didn't have the same impact as last month's sharp slide while existing home sales picked up. 2s +0.3bps @ 1.78%, 5s +2.4bps @ 1.81%, 10s +3.8bps @ 2.07%, 30s +5.1bps @ 2.59%.

Agency Spreads: Freddie/Fannie 5s -0.6/-1.5 bps, 10s +0.7/-0.1 bps.

Swap Spreads: 2s -0.53bps, 5s -0.94bps, 10s -1.00bps.

Equities

Equities took the news that Vice-President Pence would postpone a speech on China policy as positive sign on trade talks, but the bounce could not hold, the indices returning to fairly neutral levels. Energy continued to lead the upside despite some easing in Middle East tensions.

Still to Be Released -

Data

04:30 GMT - NL: GDP (Q1 F) % q/q (Prev: 0.5)

04:30 GMT - NL: GDP (Q1 F) % y/y (Prev: 1.7)

05:00 GMT - FI: PPI (May) % m/m (Prev: 0.1)

05:00 GMT - JP: Leading Indicator (Apr F) (Prev: 95.5)

08:00 GMT - DE: IFO Business Climate (Jun) 4cast: 97index (Mkt: 97.5 Prev: 97.9)

08:00 GMT - DE: IFO Current Conditions (Jun) (Mkt: 100.8 Prev: 100.6)

08:00 GMT - DE: IFO Expectations (Jun) (Mkt: 95.1 Prev: 95.3)

13:00 GMT - BE: Business Confidence (Jun) (Prev: -3.6)

Events & Auctions:

23:30 GMT - AU: RBA's Lowe speaks in Canberra

00:50 GMT - FR: 84-Day Bills Auction (EUR 2.6bn)

08:50 GMT - FR: 147-Day Bills Auction (EUR 1.3bn)

08:50 GMT - FR: 357-Day Bills Auction (EUR 1.1bn)

15:30 GMT - US: 3mth Bills Auction (USD 36bn)

15:30 GMT - US: 6mth Bills Auction (USD 36bn)

23:50 GMT - JP: Bank of Japan monetary policy meeting minutes


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