18 Jun: Consolidation rules ahead of the FOMC decision. Aud$ under pressure leading into today’s RBA Minutes.

By | June 18, 2019


It has been mostly a day of consolidation as we approach Wednesday’s FOMC decision although the commodity currencies remain under pressure on the back of some concerns of a less-dovish statement than had been previously expected underpinned the US$ on most fronts. The main FX focus on Monday was in Cable, which fell to a six month low as concerns grew that Boris Johnson will become prime minister and may resort to a no-deal Brexit if no headway can be made in the divorce negotiations with the EU.

In other markets, it was mostly a day of consolidation, with stocks and the metals going nowhere, although WTI ended down by 1% after Reuters reported that Iran and Russia ended talks without deal on when the next OPEC+ meeting is to be held.

In terms of data, the New York State Empire Mfg Index does not usually register as a market mover, but on Monday it fell to the worst level in 3 years, making the largest one-month fall on record and increased concerns about the direction of the US economy, and the prospect of rate cuts down the track, if data continues to hint at a concerted downturn in growth.

Looking ahead, Tuesday gets under way with the RBA Minutes which may put the Aud$ under further pressure if they show an increasing easing bias and concerns over economic growth. Also from Australia, we get the Q1 House Price Index (exp -1.6%qq), which are unlikely to be positive for the currency. From Europe, the ECB’s Draghi/De Guindos will be speaking early in the session, and in terms of data we get the German/EU ZEW Economic Sentiment Survey (exp: Sentiment;-6.0, Current Situation; +6.0), German PPI (exp +0.1%mm, +2.1%yy) and EU CPI (exp 0.3%mm, 1.2%yy). The US will see the Building Permits (exp -2.9%mm) and Housing Starts (exp -0.4%mm) for May, while C/B speakers will include the BOE’s Carney and the ECB’s Draghi (again) and Lane.

 Economic data highlights will include:

Tue: NZ Q2 WBC Consumer Survey, China House Price Index, Australian House Price Index, RBA Minutes, German PPI, EU Trade Balance, CPI, German/EU ZEW Economic Sentiment Survey, US Building Permits, Housing Starts, API Weekly Crude Oil Stock Inventory, Speeches; ECB’s Draghi (twice), Lane, De Guindos, BOE’s Carney

Market moves, in brief:

FX: DXY 97.56 (+0.11%)

Bonds: US10Y; 2.093% (+0.14%), German 10Y; -0.245% (+4.68%), UK 10Y; 0.85% (+0.44%), Australian 10Y; 1.394% (+0.86%), NZ 10Y; 1.645% (-0.30 %), China 10Y; 3.272% (-0.37%)

Stock Indices: DJI; xxxx%, S+P; xx%, NASDAQ; xxxx%, EUStoxx50; xxxx%, FTSE100; xxxx%, Shanghai Composite; +0.20%,

Metals: Gold $1339 oz (-0.17%), Silver $14.83 oz (-0.20%), Copper $2.6465 lb (+0.65%), Iron Ore $104.17 per tonne (NYMEX) (-0.15%),

Oil: WTI $ 51.90 pb (-1.1%)

EURUSD: 1.1217
Res  1.1240  1.1265  1.1300
Sup  1.1200  1.1175  1.1145
USDJPY: 108.52
Res  108.65  108.80  109.00
Sup  108.40  108.20  108.00
GBPUSD: 1.2533
Res  1.2560  1.2585  1.2610
Sup  1.2520  1.2495  1.2460
USDCHF: 0.9989
Res  1.0000  1.0020  1.0040
Sup  0.9970  0.9950  0.9930
AUDUSD: 0.6852
Res  0.6870  0.6885  0.6900
Sup  0.6845  0.6830  0.6815
NZDUSD: 0.6493
Res  0.6500  0.6515  0.6530
Sup  0.6480  0.6460  0.6440
S&P.fs: 2892.28
Res  2900.00  2910.00  2920.00
Sup  2885.00  2875.00  2865.00
DJ30.fs: 26134.00
Res  26160.00  26215.00  26270.00
Sup  26080.00  26005.00  25935.00
SPI200.fs: 6545
Res  6560  6575  6595
Sup  6530  6515  6500
XAUUSD: 1339.57
Res  1345.00  1350.00  1355.00
Sup  1335.00  1330.00  1325.00
XAGUSD: 14.83
Res  14.90  15.00  15.10
Sup  14.75  14.65  14.55
WTI.fs: 51.89
Res  52.65  53.70  54.85
Sup  51.50  50.60  49.85