Daily Market Update 23rd June 2016
ECONOMIC DATA OF THE DAY
| Time | CY | Indicator | Forecast | Previous |
|---|---|---|---|---|
| 09.35am | JPY | Nikkei Japan PMI Manufacturing | N/A | 47.7 |
| 08.30pm | USD | Initial Jobless Claims | 270k | 277k |
(Source: FabTrader)
OVERNIGHT NEWS
- US: Existing home sales rose to a more than nine-year high during May. The National Association of Realtors said sales increased 1.8% MoM (Mkt est: +1.8%) to a seasonally adjusted annual rate of 5.53mln (Mkt est: 5.55mln), the strongest pace since February 2007. The national median sale price rose 4.7% YoY to $239,700.
- FED Speech: Fed Chair Janet Yellen said:
- By many measures, market liquidity remains quite adequate and hasn’t deteriorated
- Even so, there are indications suggesting that, under stress, liquidity may disappear
- Fed is looking at factors including regulations, changes in business models and high-frequency trading
- We’re watching inflation and inflation expectations
- Fed to Gradually Raise Rates If Economy Progresses
- We do have the capacity to have different rates than the rest of the world, but we have to recognize that differentials in our stance of policy impact, for example, the value of the dollar
- Brexit vote is “risk that we are monitoring,” and “we will be watching closely to see what the vote is and what possible repercussions it might have.”
FOREIGN EXCHANGE (INDICATIVE RATES)
| Currency | Last | % Change | Overnight Range |
|---|---|---|---|
| DXY | 93.54 | -0.45% | 93.477 – 94.007 |
| EURUSD | 1.1327 | 0.69% | 1.1254 – 1.1348 |
| USDJPY | 104.63 | 0.25% | 104.32 - 104.98 |
| AUDUSD | 0.7513 | 0.79% | 0.7461 – 0.7527 |
| GBPUSD | 1.4785 | 0.78% | 1.4642 - 1.4844 |
(Source: FabTrader)
Commodities (INDICATIVE RATES)
| Currency | Price USD | % Change | Overnight Range |
|---|---|---|---|
| Gold | 1262.42 | 0.18% | 1261.27 - 1270.71 |
| Silver | 17.24 | 0.09% | 17.121 - 17.3423 |
| Oil (BRENT) | 49.88 | 2.67% | 49.58 – 51.24 |
| Oil (WTI) | 49.46 | 2.37% | 48.4 – 50.54 |
(Source: Bloomberg and Saxo)
COMMODITIES
Precious Metals: Very quiet on the precious metals front with the risk being quite even on both sides for gold depending on the result of the Brexit. A Remain vote will probably push Gold to 1180 and a Brexit will trigger new highs above 1300
Oil: Production fell for the 14th out of the last 15 weeks to the lowest level since September 2014 and inventories dropped by 917,000 barrels last week, according to data from the Energy Information Administration
FOREX NEWS
Oil prices were up slightly on Thursday, shrugging off a smaller-than-expected decline in U.S. stockpiles, as the market nervously awaited the result of Britain's "Brexit" vote.
Trading has been choppy in the run up to Thursday's vote on whether Britain leaves or stays in the European Union (EU), although markets appear to have largely priced in a "Remain" vote.
Brent's front-month August contract LCOc1 was up 5 cents at $49.93 a barrel at 0654 GMT. It closed down 74 cents, or 1.5 percent, at $49.88 a barrel on Wednesday.
U.S. oil CLc1 was up 1 cent to $49.14 a barrel, after slipping lower earlier. Both contracts were up for most of the day in Asian trading.
Once the Brexit vote is out of the way the oil market is likely to switch its focus to fundamentals, turning its attention to more potential supply disruptions that have sent prices higher this year.
The worsening crisis in Venezuela, the country with the highest oil reserves, may be the next source of supply concern, said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo
"There is a cloud hanging over the market from the Brexit vote, which is keeping prices down a bit," he said. "If the vote comes off, we could go up," Nunan said, referring to a vote to remain in the EU.
U.S. crude inventories fell less than expected last week, while product inventories were up slightly, the U.S. Energy Information Administration said on Wednesday. <EIA/S>
Crude inventories USOILC=ECI dropped 917,000 barrels in the week ended June 17, compared with expectations for a decrease of 1.7 million barrels. It was the fifth consecutive week of drawdowns for crude inventories.
The pound rose to a six-month high against the dollar on Thursday. [FRX/]
The yen JPY=, often a safe-haven currency for risk averse investors, was up slightly after falling earlier, while the Nikkei .N225 closed 1 percent higher.(Source: reuters.com)
