Italy’s turmoil was again the focus in European trading with the impact spilling across asset classes, including stocks, which headed lower in Europe, where most of the damage was done. By the time the US got going, the markets generally consolidated. Given the rising tensions in Europe, the Euro dived, while the Chf and the Jpy were the main beneficiaries, as the move away from Italian bonds benefited US Treasuries, with 10-year yields having fallen heavily to 2.76% due to safe haven demand, dragging both US$Jpy and EurJpy lower, and looking sick at the end of the session. Commodity currencies also headed lower due to the risk-off mood, while Gold ended up by around 0.25%. The Euro and Italian bonds were eventually given a mild lift after the Five Star leader, Luigi Di Maio, said the never sought to leave the Euro. EurUsd has since remained choppy, but towards the lower end of the day’s range.
As we head into June, the DXY is currently up by 5.5% – and looks to be headed higher.
Wednesday gets underway with the Japan Retail trade for April, the Consumer Confidence for May, and speeches from the BOJ’s Kuroda and the RBNZ’s Orr, while the Australian Building Permits will be the only other major in interest in Asia. Europe will focus in the German CPI/HICP (CPI, exp 0.3%mm, 2.0%yy; HICP, exp 1.8%yy) and the April Import/Export Index. The German Unemployment and the Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate for May, will also be released. The US session will feature the Q1 Preliminary GDP (exp 2% qq, 2.3% annualised). Also from the US we get the ADP Jobs data (exp +189k), the Wholesale Inventories for April and the US Personal Consumption/Expenditure for Q1 (Prices exp 2.7%, Expenditure exp 2.5%). The SNB’s Jordan will be speaking late in the day. The API Weekly Crude Oil Stock Inventory will also be released
I am on a plane later today and there will be no further updates till next week. Have a good one.
|INDICES / COMMODITIES|