FX News Today
Asian Market Wrap: Treasury yields moved back up from lows, 10-year JGBs are also slightly higher as the stock sell off started to fade during the Asian session. 10-year Treasury yields are now up 0.5 bp on the day at 2.886% and 10-year JGB yields are up 0.7 bp at 0.026%. The escalating round of trade and investment restrictions continue to hang over markets, but at least for now investors seem to be taking a breather. Japanese stock markets reversed early losses as gains in banks offset declines in technology and telecoms. Topix and Nikkei are up 0.25% and 0.12% respectively. The Hang Seng gained 0.21% and while the CSI 300 is still down -0.57%, the Shenzen Comp is up 0.66%. US stock futures are also moving higher after sharp losses on Wall Street yesterday. Oil prices are up and the WTI is trading at USD 68.30 per barrel.
FX Update: The main currencies are showing little net change ahead of the London interbank open. EURUSD edged a fresh 12-day high, at 1.1721, before ebbing back to near net unchanged levels nearer 1.1700. USDJPY has become directionally stuck near 109.50, above the 2-week low that was pegged yesterday at 109.37. The yen’s safe-haven bid of yesterday ran out of puff, while BoJ board member Sakurai said, also yesterday, (from Rome) that it remained “essential” for the central bank to conduct monetary policy “under the current framework for the time being.” By “current framework” he meant a short-time interest rate target of -0.1% and pegging of the 10-year JGB yield at near 0% (the curve control policy), alongside its QQE program. The stock market sell-off has abated in Asia. Japan’s Nikkei 225 managed to close with a fractional 0.2% gain, while S&P 500 futures are showing modest gains. President Trump’s trade advisor Navarro said that the Trump administration just wants “free, fair, and reciprocal trade…the mission here is to defend our technology and IP.”
Charts of the Day
Main Macro Events Today
- MPC Member Haskel and McCafferty Speech
- US CB Consumer Confidence – Expectations – to inch up to 128.5 in June, from 128.0 in May and close to a 17-year high of 130.0 in February. Additionally, S&P Case-Shiller home prices are seen rising to 211.2 in April from 208.0, while the Richmond Fed index may dip to 15 in June from 16.
- FOMC Member Bostic and Kaplan Speech
- NZ Trade Balance – Expectations – is seen narrowing to NZD100 mln in May from NZD263 mln in April.
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Andria Pichidi
Market Analyst
HotForex
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