> AU May NAB Business Confidence : 20 v. 23 revised prev.
> EU June ZEW Economic Sentiment : 81.3 v. 85.5 exp.
> EU June German ZEW Economic Sentiment : 79.8 v. 86.0 exp.
> EU Q2 Final Employment Change : -0.3% v. -0.3% exp.
> US April Trade Balance : -68.9 v. -68.5bio exp.
> US April JOLTS Job Openings : 9.29Mio v. 8.18Mio exp.
Overnight Headlines (BBG)
> The EU/US will look to end their multi year trade disagreements as the US goes on a mission to repair trade relationships with some of their key allies under this administration
> US President Biden has finished negotiations with the GOP group Capito with no deal on the infrastructure package as yet while sticking to tax increases
What you need to know
Another uneventful session, much as expected as investors are clearly choosing to sit on their hands ahead of a very important Thursday with US CPI and the ECB due to meet. The data in Asia was centred around the NAB business confidence/conditions numbers, which was mixed as conditions rose month/month although confidence was unable to see strong gains. Market reaction for the AUDUSD was minimal, largely unchanged on the release and trading well within its 30pip range for the session.
In Europe, there are growing fears that the recent spike in COVID19 cases in the UK is going to delay the much anticipated reopening plan as the Delta variant, previously known as the Indian strain, is seeing cases skyrocket. GBPUSD was a touch softer on the session, although largely recovering to finish the session unchanged.
In the US, the job openings numbers climbed to a huge 9.3mio in April, although the focus for the data is well and truly on the inflation print tomorrow night. Negotiations in Congress from President Biden and team have continued on their infrastructure plan, with no deal as yet with the two sides unable to come to a compromise. Fairly strong move lower in UST yields despite the inflation angst, with the 10y down as much as 6.1bps on the day. US equity markets hovering around gains/losses, with the S&P500 closing the session up with marginal gains. Commodities seem to have regained their lustre, the move lower in UST yields helping the cause as Base Metals performed very well with Iron ore up 5.5% while Copper able to edge out 0.5% gains. WTI crude has breached the US$70/barrel level, up another 1.15% and continuing its strong move higher. Gold prices have slumped a touch, down 0.3% and struggling to hold above US$1900/oz.
The Day Ahead
> AU RBA Ast. Gov. Kent to speak (9:30am AEST)
> AU June Westpac Consumer Sentiment : -4.8% prev.
> NZ June Prelim ANZ Business Confidence : 1.8 prev.
> CN May PPI & CPI : 8.5% & 1.6% exp. (y/y)
> CA BOC Rate Decision/Statement : 0.25% exp (no change)
> US May Final Wholesale Inventories : 0.8% exp.
> US EIA Crude Oil Inventories : -3.3Mio exp.
Should get some more action today during the Asian session, however the moves will likely be limited ahead of tomorrow’s US CPI report. RBA Ast. Gov. Kent’s speech today will be focused on debt markets, so will keep an eye on the Q&A period for any insight into local policy ahead of next month’s important meeting. Chinese May Consumer/Producer inflation numbers will hit the wires, with strong beats higher likely to cause some movement.
While, the Bank of Canada meeting this evening will be watched for further insight into tightening of policy following the announcement of bond tapering. Not expecting a major break today, unfortunately continuing to sit in the tight range on AUDUSD, although widened a touch on the increased data docket.
Range for the day : 0.7720 – 0.7780
Little change to the technical picture yet again, with the pair feeling comfortable trading around the 50/100DMA ahead of Thursday’s print. Will need to see a close above 0.7760 to see further upside potential, the 0.7700 handle will be very important on the downside close.
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