ECONOMIC DATA OF THE DAY

Time	CY	Indicator	Forecast	Previous
10.00pm	CAD	Bank of Canada Rate Decision	0.5%	0.5%
10.00pm	CAD	Bank of Canada Releases Monetary Policy Report	N/A	N/A

(Source: FabTrader)

OVERNIGHT NEWS

• US: 
• U.S. wholesale moved up 0.1% (Exp. +0.2%) after expanding a revised 0.7% in April (Prev: +0.6%)during May, weighed by the largest decline in automobile stocks in more than 2-1/2 years. The component of wholesale inventories that is used in the calculation of GDP - wholesale stocks excluding autos - rose 0.4% driven by higher prices for commodities, notably petroleum. Auto inventories sank 1.9%, the largest decline since September 2013. Wholesale stocks of petroleum leapt 3.2% and farm products inventories spiked 5.9%. Sales at wholesalers grew 0.5%.
• FED Speech: 
• Federal Reserve Bank of Minneapolis President Neel Kashkari says “there’s not a huge urgency to raise rates because inflation is coming up low.” “We’re a long way away from that so we feel like we can continue to be patient”

FOREIGN EXCHANGE (INDICATIVE RATES)

Currency	Last	% Change	Overnight Range
DXY	96.50	0.15%	96.07 – 96.553
EURUSD	1.1062	-0.18%	1.106 – 1.1126
USDJPY	104.75	1.65%	102.88 - 104.99
AUDUSD	0.7605	0.43%	0.7582 – 0.7658
GBPUSD	1.3282	1.31%	1.3064 - 1.3295

(Source: FabTrader)

Commodities (INDICATIVE RATES)

Currency	Price USD	% Change	Overnight Range
Gold	1334.29	1.63%	1330.41 - 1357.86
Silver	20.16	0.64%	19.967 - 20.5315
Oil (BRENT)	48.47	4.90%	46.09 - 49.22
Oil (WTI)	46.46	4.46%	44.56 - 46.93

(Source: Bloomberg and Saxo)

COMMODITIES

Precious Metals: Gold dropped the most in seven weeks and silver also slumped after touching 2-year highs, as stock markets climbed on speculation that policy makers will act to spur growth. Furthermore, a return of Fed rate hike expectations are generating selling pressure. 

Oil: August WTI crude is soaring $1.63, or 3.6%, to US$46.39 a barrel after OPEC said production from countries outside the cartel would fall more than previously expected this year. In its monthly report OPEC said non-OPEC production would fall by 880,000 barrels a day this year, larger than previously expected due to lower output in Canada and in the U.S.

FOREX NEWS

The whole move started with GBPJPY in the Asia session with strong buying interest from Funds in USDJPY and stops in GBPUSD at 1.3050 and it continued in the NY session. In 2 sessions, GBPJPY moved from 130 to 138.8 (6.4%) and should find a short term resistance at 140. For USDJPY the main resistance will be at 106/107, the level before Brexit

After some stops got triggered at 1.3050 in GBP, we saw a flurry of buying from funds. It seems there is more certainty in the market with the nomination of Theresa May as the new PM. The next resistance level is at 1.3500 

I keep hearing and reading trade views to go long USDCAD and it feels the market is long USD now. The rally in Oil overnight pushed it down but still above the support level of the 100d MA at 1.2989. A drop below will most probably trigger a lot of stops. Bank of Canada meets today at 10pm Sing Time and no chance is expecting in the rates (Exp. 0.50%)

AUD and NZD benefited from the rally of commodities overnight and reaching new highs since May for AUD above 0.7600 while NZD is trading again at the highs of the year.

 Emerging Market Currencies rallied as well in sympathy but not as much as the rest

Asian shares near 2016 highs as risk appetite improves

Asian shares came within reach of their 2016 highs on Wednesday as prospects of solid U.S. growth and accommodative economic policy in major markets whet investors' risk appetite damaged by uncertainty from Brexit.

Spreadbetters expected European shares to take a breather following days of gains, forecasting a slightly lower open for Britain's FTSE .FTSE, Germany's DAX .GDAXI and France's CAC .FCHI. U.S. stock futures ESc1 dipped 0.1 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose as much as 0.4 percent to 427.83, just below its year-to-date high of 428.22 hit on April 21.

Japan's Nikkei .N225 gained 1.1 percent.

Australian stocks added 0.5 percent and South Korea's Kospi .KS11 rose 0.6 percent. New Zealand shares .NZ50 inched down 0.1 percent but were near a record high struck Tuesday. Shanghai .SSEC advanced 0.4 percent.

"A while ago, everything looked so uncertain on Brexit. But now that the UK looks set to have a new prime minister ... that is soothing investor sentiment," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Britain's interior minister Theresa May is set to take over as prime minister on Wednesday.

Elsewhere, Philippine shares .PSI reached a more than 1-year high and Vietnam .VNI scaled an 8-year peak.

In Japan, Prime Minister Shinzo Abe ordered a new round of fiscal stimulus spending, as expected, after an election victory on Sunday.

Abe's meeting on Tuesday with former U.S. Federal Reserve Chair Ben Bernanke, a proponent of "helicopter money" policies - printing money and directly handing it to the private sector to stimulate the economy - fueled speculation that some of Abe's stimulus plan could be funded by the Bank of Japan's easing.

Such expectations pushed down the yen 4 percent over the last two days. The yen last traded at 104.22 yen to the dollar JPY=.(Source: reuters.com)