Thursday 17/06/2021
What to Know
China pledges to release metal reserves to tackle price and shortage fears. The Chinese government is concerned with the commodity price rally, which pushed factory gate price up to their highest since 2008 and threatened to squeeze industry profits.
Data
- AU May MI Leading Index : -0.1% v. 0.2% prev.
- UK May Core CPI & H/line CPI : 2.0% & 2.1% v. 1.5% & 1.8% exp.
- CN May Industrial Production & Fixed Asset Investment : 8.8% & 15.4% v. 9.2% & 17.0% exp. (5pm AEST)
- CN May Retail Sales & Unemployment Rate : 12.4% & 5.0% v. 14.0% & 5.1% exp. (5pm AEST)
- CA May CPI : 0.5% v. 0.4% exp.
- US EIA Crude Oil Inventories : -7.4Mio v. -2.1Mio exp.
- US FOMC Statement/Decision/Press Conference : <0.25% v. <0.25% exp. (rate hike expectations brought forward)
AUDUSD Day’s Range: 0.76061 – 0.77065
USD appreciated sharply after the Federal Reserve signaled that they expected to increase the interest rate in 2023, one year earlier than the previous expectation. The yield on the benchmark 10-year Treasury note rose 0.08 percent to 1.58 percent and the US dollar index climbed 0.8%. U.S. stocks fall, the Dow Jones Industrial Average fell 0.8% to 34033.67, S&P edged down 0.5% and the NASDAQ Composite dropped 0.2%. Quincy Krosby commented that the statement was considered more hawkish than the market had expected.
The Chair of the Fed Reserve Powell acknowledged that the Fed was now ‘talking about’ tapering the Fed’s $120 billion a month asset-buying programme. This year’s median GDP forecast was raised to 7.0% and the PCE inflation estimate rose to 3.4%.
Key events this week:
- U.S. Treasury Secretary Janet Yellen testifies before a House panel Thursday on the federal budget
- Rate decisions come from Switzerland and Norway on Thursday
- The Bank of Japan’s monetary policy decision is on Friday
Major Moves in the market:
Stocks
- S&P 500 futures fell 0.3% as of 7:18 a.m. in Tokyo. The S&P 500 fell 0.5%
- Nasdaq 100 futures lost 0.4%. The Nasdaq 100 fell 0.3%
- Nikkei 225 futures fell 0.1%
- Australia’s S&P/ASX 200 Index futures rose 0.1%
- Hang Seng Index futures dropped 0.6% earlier
Currencies
- The yen traded at 110.65 per dollar after slipping 0.6%
- The offshore yuan was at 6.4374 per dollar
- The Bloomberg Dollar Spot Index rose 0.9%
- The euro traded at $1.1996 after dropping more than 1%
Bonds
- The yield on 10-year Treasuries advanced eight basis points to 1.58%
- Australia’s 10-year bond futures dropped
Commodities
- West Texas Intermediate crude slid 0.9% to $71.55 a barrel
- Gold was at $1,814 after tumbling 2.6%
Upcoming data:
- CA BOC Gov. Tiff Macklem to speak
- NZ Q1 GDP : 0.5% exp.
- AU RBA Gov. Lowe to speak
- AU May Employment Change & Unemployment Rate : 30.5K & 5.5% exp
- EU May Final H/line CPI & Core CPI : 2.0% & 0.9% exp.
- US June Philly Fed Manufacturing Index : 30.3 exp.
- US Unemployment Claims : 360K exp.
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