Bank Of Japan Minutes On Tap For Wednesday

Trading 23 Juin 2021 Commentaire »

The Bank of Japan will on Wednesday release the minutes from its monetary policy meeting on April 26-27, headlining a busy day in Asia-Pacific economic activity.

At the meeting the BoJ decided to keep its monetary stimulus unchanged, holding the benchmark interest rate steady at -0.1 percent. The bank also will continue to purchase Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent. It also downgraded its near-term inflation forecast and raised its growth projections despite the ongoing Covid restrictions.

Japan also will see April results for its leading and coincident indexes and June results for the manufacturing, services and composite PMIs from Jibun Bank. In March, the leading index had a score of 102.4 and the coincident was at 92.9. In May, the manufacturing index was at 53.0, services was at 46.5 and composite was at 48.8.

Singapore will provide May numbers for consumer prices; in April, overall inflation was down 0.2 percent on month and up 2.1 percent on year, while core CPI rose an annual 0.6 percent.

Taiwan will release May figures for industrial production and retail sales; in April, output was up 13.62 percent on year and retail sales jumped an annual 18.27 percent.

Thailand will provide May numbers for imports, exports and trade balance. Imports are expected to surged 53.65 percent on year after jumping 29.79 percent in April. Exports are called higher by an annual 30.0 percent after climbing13.09 percent in the previous month. The trade surplus is pegged at $0.78 billion, up from $0.18 billion a month earlier.

Also, the central bank in Thailand will wrap up its monetary policy meeting and then announce its decision on interest rates. The bank is widely expected to keep its benchmark lending rate unchanged at 0.50 percent.

The Philippines will see April figures for retail sales; in March, sales were up 1.8 percent on year.

Australia will see June results for the manufacturing, services and composite PMIs from Markit Economics; in May, their scores were 60.4, 58.0 and 58.0, respectively.


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Dollar Retreats From Higher Levels, Loses Ground Against Peers

Trading 23 Juin 2021 Commentaire »

After exhibiting strength against most of its peers in the Asian session, the U.S. dollar turned a bit easy against a few major currencies on Tuesday as traders digested Fed Chair Jerome Powell's Congressional testimony.

The dollar gained early on in the session as U.S. treasury yields rose amid speculation that the central bank will gradually tighten its monetary policy.

Later on in the day, Powell continued to downplay the risks of inflation during testimony before the House Select Subcommittee on the Coronavirus Crisis.

Powell acknowledged inflation has increased notably in recent months but reiterated the view that the jump is due to "transitory" factors and predicted inflation would drop back toward the Fed's longer-run goal of 2% price growth.

The Fed chief noted the economy has shown sustained improvement since he last appeared before the committee, citing widespread Covid-19 vaccinations as well as unprecedented monetary and fiscal policy actions.

However, he also warned the coronavirus pandemic continues to pose risks to the economic outlook, pointing to the slowing pace of vaccinations and new strains of the virus.

Powell stressed that the Fed will do "everything we can to support the economy for as long as it takes to complete the recovery."

In economic news today, the National Association of Realtors' report showed existing home sales extended a recent pullback in May but fell by less than economists had expected. NAR said existing home sales slid by 0.9% to an annual rate of 5.80 million in May after tumbling by 2.7% to a rate of 5.85 million in April. Economists had expected existing home sales to slump by 2.2% to a rate of 5.72 million.

Existing home sales have plummeted by 12.9% since January but are still up by 44.6% compared to May of 2020.

The dollar index, which rose to 92.14, dropped down to 91.65 later on in the day, and was last seen at 91.73, down 0.18% from the previous close.

Against the Euro, the dollar weakened to $1.1939, netting a loss of about 0.16%. The Pound Sterling strengthened to $1.3948 a unit, gaining from $1.3861.

The Yen weakened to 110.68 a dollar, more than a week's low, dropping from Monday's close of 110.33.

Against the Aussie, the dollar weakened to 0.7555 from 0.7535.

The Swiss franc lost marginally against the dollar, weakening to 0.9185 from 0.9178.

Against the Loonie, the dollar turned weak, fetching C$1.2308 a unit, compared to C$1.2363 on Monday.


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Treasuries Close Modestly Higher After Seeing Early Weakness

Trading 23 Juin 2021 Commentaire »

Treasuries moved modestly higher over the course of the trading session on Tuesday, recovering from an early move to the downside.

Bond prices rebounded after seeing early weakness and spent rest of the day hovering slightly above the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 1.472 percent.

The uptick by treasuries came as Federal Reserve Chair Jerome Powell continued to downplay the risks of inflation during testimony before the House Select Subcommittee on the Coronavirus Crisis.

Powell acknowledged inflation has increased notably in recent months but reiterated the view that the jump is due to "transitory" factors and predicted inflation would drop back toward the Fed's longer-run goal of 2 percent price growth.

The Fed chief also warned the coronavirus pandemic continues to pose risks to the economic outlook, pointing to the slowing pace of vaccinations and new strains of the virus.

Powell stressed that the Fed will do "everything we can to support the economy for as long as it takes to complete the recovery."

Treasuries remained modestly higher after the Treasury Department revealed this month's sale of $60 billion worth of two-year notes attracted average demand.

The two-year note auction drew a high yield of 0.249 percent and a bid-to-cover ratio of 2.54, while the ten previous two-year note auctions had an average bid-to-cover ratio of 2.55.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

On the U.S. economic front, the National Association of Realtors released a report showing existing home sales extended a recent pullback in May but fell by less than economists had expected.

NAR said existing home sales slid by 0.9 percent to an annual rate of 5.80 million in May after tumbling by 2.7 percent to a rate of 5.85 million in April. Economists had expected existing home sales to slump by 2.2 percent to a rate of 5.72 million.

Existing home sales have plummeted by 12.9 percent since January but are still up by 44.6 percent compared to May of 2020.

Looking ahead, the Treasury is due to announce the results of this month's auction of $61 billion worth of five-year notes on Wednesday.

Traders are also likely to keep an eye on the Commerce Department's report on new home sales in the month of May.


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Oil Futures Settle Lower Ahead Of Inventory Data

Trading 23 Juin 2021 Commentaire »

Crude oil futures settled lower on Tuesday, weighed down by speculation that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will likely agree to increase crude production.

Profit taking by traders after crude oil prices rose to their highest level since 2018 contributed as well to the weak close of the commodity.

West Texas Intermediate Crude oil futures for July ended down $0.60 or about 0.8% at $73.06 a barrel on the expiration day.

WTI Crude oil futures for August, the new front-month contract, ended down $0.27 or 0.4% at $72.85 a barrel.

Oil prices rose in recent sessions on hopes of economic revival and expected pick-up in summer travel on the back of increasing vaccination coverage.

Meanwhile, expectations for an early return of Iranian crude faded after Ebrahim Raisi, an ultraconservative cleric who's generally hostile toward the West, emerged as the winner of June 18 elections. He's due to take over from Rouhani in mid-August.

BofA Global Research raised its Brent crude price forecasts for this year and next, saying the global oil market will continue to be undersupplied. Goldman Sachs is expecting firmer oil prices moving forward.

On the supply front, OPEC and allies have been gradually increasing production since May as per the decision taken a few months ago. The OPEC+ is now set to meet again on July 1 to take stock of the situation, and it is being speculated that the group will consider hiking production further.

Traders now await weekly oil reports from the American Petroleum Institute (API) and Energy Information Administration (EIA). The API's report is due later today, while the EIA's inventory data is due out Wednesday morning.


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Gold Futures Settle Lower As Markets Await Powell's Testimony

Trading 23 Juin 2021 Commentaire »

Gold futures ended lower on Tuesday, recording losses for the third time in the last four sessions, with traders looking ahead to the Federal Reserve Chairman Jerome Powell's testimony before the Congress.

Powell will testify before the U.S. House of Representatives Select Subcommittee on the Coronavirus Crisis. He is due to discuss the Fed's response to the pandemic but could also face questions about the outlook for monetary policy.

In his prepared remarks for hearing before Congress, Powell said that the current surge in inflation is likely to be transitory and it could move back to the Fed's 2% target when supply imbalances are resolved.

The Fed chief gave a positive assessment of the labor market, saying that employment should pick up in coming months as vaccinations progress and the economy emerges from the pandemic.

"We at the Fed will do everything we can to support the economy for as long as it takes to complete the recovery," Powell noted.

The dollar, which stayed higher till a little past noon, faltered and posted losses against some of its peers.

The dollar index was last seen hovering around 91.75 (down 0.16% from the previous close) after having moved up to 92.14 in the Asian session.

Gold futures for August ended down by $5.50 or about 0.3% at $1,777.40 an ounce. Gold futures had gained about 0.8% on Monday, after posting losses last Thursday and Friday.

Silver futures for July ended down by $0.168 or 0.7% at $25.857 an ounce, while Copper futures for July closed higher by $0.460 or 1.1% at $4.2300 per pound.

A report from the National Association of Realtors showed existing home sales in the U.S. saw further downside in the month of May.

NAR said existing home sales slid by 0.9% to an annual rate of 5.80 million in May after tumbling by 2.7% to a rate of 5.85 million in April. Economists had expected existing home sales to slump by 2.2% to a rate of 5.72 million.

Existing home sales have plummeted by 12.9% since January but are still up by 44.6% compared to May of 2020.


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Two-Year Note Auction Attracts Average Demand

Trading 23 Juin 2021 Commentaire »

Kicking off this week's series of announcements of the results of its long-term securities auctions, the Treasury Department revealed Tuesday that this month's sale of $60 billion worth of two-year notes attracted average demand.

The two-year note auction drew a high yield of 0.249 percent and a bid-to-cover ratio of 2.54.

Last month, the Treasury also sold $60 billion worth of two-year notes, drawing a high yield of 0.152 percent and a bid-to-cover ratio of 2.74.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous two-year note auctions had an average bid-to-cover ratio of 2.55.

Looking ahead, the Treasury is due to announce the results of this month's auction of $61 billion worth of five-year notes on Wednesday and this month's auction of $62 billion worth of seven-year notes on Thursday.


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Eurozone Consumer Confidence Highest Since 2018

Trading 22 Juin 2021 Commentaire »

Eurozone consumer confidence strengthened for a fifth month in a row in June to its highest level since early 2018, preliminary data from the European Commission showed Tuesday.

The flash consumer confidence index rose to -3.3 from -5.1 in May. Economists had forecast a score of -3.0.

The latest reading was the highest since January 2018, when it was -3.0

The confidence index for EU also improved for a fifth straight month, climbing 1.5 points to -4.5. That was the highest reading since October 2018, when it was at the same level.

Data for the survey was collected from June 1 to 21.

The final figures for June are set to be released along with the monthly economic sentiment survey results due on June 29.


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*Eurozone June Flash Consumer Confidence -3.3 Vs. -5.1 In May, Consensus -3.0

Trading 22 Juin 2021 Commentaire »

Eurozone June Flash Consumer Confidence -3.3 Vs. -5.1 In May, Consensus -3.0


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U.S. Existing Home Sales Extend Pullback In May But Drop Less Than Expected

Trading 22 Juin 2021 Commentaire »

After reporting sharp decreases in U.S. existing home sales over the three previous months, the National Association of Realtors released a report on Tuesday showing existing home sales saw further downside in the month of May.

NAR said existing home sales slid by 0.9 percent to an annual rate of 5.80 million in May after tumbling by 2.7 percent to a rate of 5.85 million in April. Economists had expected existing home sales to slump by 2.2 percent to a rate of 5.72 million.

Existing home sales have plummeted by 12.9 percent since January but are still up by 44.6 percent compared to May of 2020.

"Home sales fell moderately in May and are now approaching pre-pandemic activity," said NAR chief economist Lawrence Yun. "Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market."

"The market's outlook, however, is encouraging," he continued. "Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes."

The report said the median existing home price was $350,300 in May, up 2.8 percent from $340,600 in April and up 23.6 percent from $283,500 a year ago.

Total housing inventory jumped 7.0 percent to 1.23 million units at the end of May from 1.15 million at the end of April but was still down by 20.6 percent from 1.55 million at the end of May 2020.

The unsold inventory represents 2.5 months of supply at the current sales price, up from April's 2.4 months of supply but down from 4.6 months last May.

NAR also said single-family home sales fell by 1.0 percent to an annual rate of 5.08 million in May, while existing condominium and co-op sales were unchanged at a rate of 720,000.

On Wednesday, the Commerce Department is scheduled to release a separate report on new home sales in the month of May.

Economists currently expect new home sales to climb by 0.8 percent to an annual rate of 870,000 in May after plunging by 5.9 percent to a rate of 863,000 in April.


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Euro Little Changed After Eurozone Consumer Sentiment Index

Trading 22 Juin 2021 Commentaire »

Following the release of Eurozone flash consumer sentiment index for June at 10:00 am ET Tuesday, the euro changed little against its major counterparts.

The euro was trading at 131.73 against the yen, 1.0949 against the franc, 0.8565 against the pound and 1.1905 against the greenback around 10:03 am ET.


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