Daily Market Update 17th June 2016
ECONOMIC DATA OF THE DAY
| Time | CY | Indicator | Forecast | Previous |
|---|---|---|---|---|
| 08.30pm | USD | Housing Starts MoM | -1.9% | 6.6% |
| 08.30pm | CAD | CPI Core MoM | 0.5% | 0.5% |
(Source: FabTrader)
OVERNIGHT NEWS
- US: CPI rose 0.2% MoM (Exp. 0.3%) and 1.0% YoY (Exp. 1.1%). The Core CPI came as expected at 0.2% MoM driven by a 0.4% jump in shelter costs. Energy prices increased 1.2% MoM led by a 2.3% pop in gas prices. Food prices declined 0.2% including a 0.5% slide in food purchased for home consumption. It was the fifth month in seven that grocery prices declined. YoY the headline CPI rose 1.0%.YoY core prices jumped 2.2% to mark the seventh successive month that annualised core inflation matched or exceeded 2%.Home Builder sentiment improved and came at 60 (Exp 59). The sales expectations index leapt five points to 70, the highest level since OctoberThe Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey came back into positive territory at 4.7 and better than expected but indicators for new orders, shipments, and employment remained negative. Initial jobless claims rose 13k, to 277k in the week ending June 11, modestly higher than our (275k) and median consensus expectations (270k). The four-week moving average fell to 269k (previous: 270k)
- New Zealand: Bank Indonesia (BI) cut all policy rates by 25bps against market expectations. The bank lowered the old benchmark policy rate to 6.50%, and the new policy rate (7d reverse repo rate) to 5.25%. BI also eased rules around loan to value for the housing market, raising it to 80% (from 78% earlier). This easing will come into effect in August. This move is aimed at boosting housing transactions, and to improve credit growth, which stayed low at 8.0% y/y in April.
FOREIGN EXCHANGE (INDICATIVE RATES)
| Currency | Last | % Change | Overnight Range |
|---|---|---|---|
| DXY | 94.57 | 0.32% | 94.205 – 95.318 |
| EURUSD | 1.1234 | -0.42% | 1.1131 – 1.1295 |
| USDJPY | 104.49 | 0.12% | 103.55 - 104.6 |
| AUDUSD | 0.7373 | -0.27% | 0.7286 – 0.7393 |
| GBPUSD | 1.4225 | 0.33% | 1.4013 - 1.4254 |
(Source: FabTrader)
Commodities (INDICATIVE RATES)
| Currency | Price USD | % Change | Overnight Range |
|---|---|---|---|
| Gold | 1281.10 | 1.20% | 1283.32 - 1315.71 |
| Silver | 17.26 | 2.08% | 17.3945 - 17.8645 |
| Oil (BRENT) | 47.19 | 2.18% | 47.09 – 48.77 |
| Oil (WTI) | 46.16 | 3.08% | 46.16 – 47.75 |
(Source: Bloomberg and Saxo)
COMMODITIES
Gold: Gold came well off session highs, after earlier extending its rise above $1,300 an ounce to hit its highest since August 2014.
Oil: BREXIT fears was still dominant in the oil markets with concern that BREXIT will lead. Market will be watching the Baker Hughes rig count data tonight.
FOREX NEWS
A mix of commodities lower, a drop of Asia equities and USDJPY pushed the USD higher against all the other currencies. The biggest move yesterday was USDJPY which dropped like a rock as soon as the support level of 105.50 got broken, reaching a low of 103.55 but managed to find some bids with the US equities and rates recovering and more importantly some verbal intervention coming from BOJ with Aso saying “see one-sided, speculative moves in FX” and “Will act to halt speculative FX moves when needed” .
AUD and NZD dropped following the move in Commodities but NZD still managing to hold above the new support at 0.7000.
Very quiet move in Emerging Markets
Crude Oil rises for first time in seven days
Crude oil prices rose on Friday for the first time in seven days as markets took a breather from concerns about the impact of Britain's possible exit from the European Union.Brent crude futures were up 59 cents, or 1.3 percent, at $47.78 a barrel at 0143 GMT after slumping 3.6 percent in the previous session. The contract is on track to fall nearly 5.5 percent for the week. U.S. West Texas Intermediate crude futures rose 37 cents, or 0.8 percent, to $46.58. The contract fell 3.8 percent in the previous session and prices are down around 5 percent so far this week. The British pound rose from a two-month low after campaigning for next week's so-called Brexit vote next week was suspended following the murder on Thursday of UK member of parliament Jo Cox, who was a vocal advocate for Britain to stay in the European Union. Commodities across the board also posted gains, while equity benchmarks including Japan's Nikkei stock average rose. "We need to brace ourselves for further volatility," said Ben Le Brun, market analyst at OptionsXpress in Sydney. "We are seeing a bit of a recovery now with maybe some short positions being unwound. It is certainly going to be a wild ride for investors and traders going into the June 23 decision," he said. Still, global oil majors Chevron Corp and Royal Dutch Shell Plc are putting small refineries on the auction block as they look to trim lower-margin assets in the face of headwinds from rising crude oil prices. Chevron, the second largest U.S. oil company, is soliciting interest in its Burnaby, British Columbia, refinery and gasoline stations, the company told Reuters. Shell is looking for buyers for its Martinez, California, refinery, two people familiar with the situation told Reuters. Shell declined to comment. (Source: reuters.com)
