Forex news and forecasts from 10-06-2021

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10.06.2021
23:50
Japan: BSI Manufacturing Index, Quarter II -1.4
22:30
New Zealand: Business NZ PMI, May 58.6
19:50
Schedule for tomorrow, Friday, June 11, 2021
Time Country Event Period Previous value Forecast
06:00 (GMT) United Kingdom Manufacturing Production (MoM) April 2.1% 1.5%
06:00 (GMT) United Kingdom Manufacturing Production (YoY) April 4.8% 41.8%
06:00 (GMT) United Kingdom Industrial Production (YoY) April 3.6% 30.5%
06:00 (GMT) United Kingdom Industrial Production (MoM) April 1.8% 1.2%
06:00 (GMT) United Kingdom Total Trade Balance April -2  
06:00 (GMT) United Kingdom GDP m/m April 2.1% 2.2%
06:00 (GMT) United Kingdom GDP, y/y April 1.4% 27.6%
06:45 (GMT) France CPI, y/y May 1.2%  
06:45 (GMT) France CPI, m/m May 0.1%  
08:00 (GMT) France IEA Oil Market Report    
08:30 (GMT) United Kingdom BOE Gov Bailey Speaks    
12:30 (GMT) Canada Capacity Utilization Rate Quarter I 79.2% 80.6%
13:00 (GMT) United Kingdom NIESR GDP Estimate May 1.3%  
14:00 (GMT) U.S. Reuters/Michigan Consumer Sentiment Index June 82.9 84
17:00 (GMT) U.S. Baker Hughes Oil Rig Count June    
19:00
DJIA +0.26% 34,536.94 +89.80 Nasdaq +0.82% 14,025.50 +113.75 S&P +0.55% 4,242.60 +23.05
17:59
U.S.: Federal budget , May -132
16:02
European stocks closed: FTSE 100 7,088.18 +7.17 +0.10% DAX 15,571.22 -9.92 -0.06% CAC 40 6,546.49 -16.96 -0.26%
15:00
ECB signals it’s too early to taper - Wells Fargo Securities

ActionForex reports that analysts at Wells Fargo Securities discuss the ECB's latest policy update.

"The European Central Bank (ECB) held monetary policy steady at today’s meeting, keeping its Deposit Rate at -0.50% and making no changes to its asset purchase programs. The ECB also signaled it was too early to taper its bond purchases, saying that it expects an accelerated pace of purchases to continue during Q3. At this stage, so long as the Eurozone economy shows a perceptible firming in growth in the months ahead, we expect the ECB to announce a slower pace of bond purchases from Q4 2021 at its September meeting."

"Most interest heading into the meeting had been on the central bank’s bond purchase plans. On that front, the ECB kept its Pandemic Emergency Purchase Program (PEPP) at €1.85 trillion, and said that purchases would run until at least March 2022. The ECB also said its PEPP purchases would be flexible with respect to time, asset classes and countries. In addition, the central bank said it would continue its purchases under the Asset Purchase Program (APP) at a pace of €20 billion per month."

"There had been particular interest heading into the meeting regarding whether the ECB would slow the pace of its PEPP purchases, after it had accelerated purchases under the program earlier this year. On that front, the ECB announcement signaled that it was too early for the central bank to taper its purchases at this time. Specifically, the ECB said: “Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects net purchases under the PEPP over the coming quarter to continue to be conducted at a significantly higher pace than during the first months of the year".”

"The announcement is not all that surprising. Although confidence surveys indicate an upswing is now likely underway, activity data are still somewhat mixed... Nonetheless, the unchanged pace of bond purchases is something of a contrast to other G10 central banks (Bank of Canada, Bank of England) that have already begun to taper their asset purchases. As a result, the market reaction, which included a modest initial drop and subsequent rebound in the EUR/USD exchange rate, was not all that surprising either. At this stage, so long as the Eurozone economy shows a perceptible firming in growth in the months ahead, we expect the ECB to announce a slower pace of PEPP purchases from Q4 2021 at its September meeting. From a foreign exchange perspective, while we do expect the euro to gain against the U.S. dollar over the medium-term, it could lag gains in other G10 currencies such as the British pound or Canadian dollar."

"Finally, the ECB provided updated economic projections showing faster growth and inflation with today’s announcement. The ECB now forecasts Eurozone GDP growth of 4.6% in 2021 (compared to 4.0% in March) and 4.7% in 2022 (4.1% in March). For inflation, the ECB expects the CPI to rise 1.9% in 2021 (compared to 1.5% in March) and by 1.5% in 2022 (1.2% in March). ECB President Lagarde also said the risks to the growth outlook were now broadly balanced."

14:40
U.S.: Another hot month for inflation, as used vehicle prices boost core inflation to a 29-year high - TD Bank Financial Group

ActionForex reports that analysts at TD Bank Financial Group discuss U.S. key inflation report for May. 

"Consumer prices had another hot month in May, rising 0.6% month/month, after a 0.8% m/m gain in April. That was one tick above expectations and boosted the headline inflation rate to 5.0% year-on-year (y/y), up from 4.2% in April. That marks the highest pace of inflation since August 2008."

"Core prices (ex. food and energy) were also up 0.7% m/m in May, slightly above expectations, and after rising by 0.9% m/m in April. That drove year/year core inflation higher to 3.8% in May – the largest increase since 1992."

"Many of the same categories that saw accelerated price growth in April saw continued robust growth in May. Used vehicle prices continued to be a big story, rising 7.3% m/m in May. Again, price hikes there accounted for one third of the headline increase in inflation. Elsewhere, household furniture and operations (+1.3 m/m), new vehicles (+1.6% m/m), airline fares (7.0%) and apparel (1.2% m/m) all saw robust gains."

"If you want to travel somewhere in the U.S. right now, it’s going to cost you. There is a theme to some of the biggest prices hikes, purchasing or renting vehicles and air travel have all seen huge upswings in recent months. Americans are increasingly vaccinated with stimulus money in their accounts to spend now that restrictions are lifted. This surge in demand is running up against supply that cannot adjust quickly enough."

"The question is: how long will these elevated price increases go on? Over time supply is expected to adjust, but with pandemic-related supply shortages and constraints still in place the process could take some time. Even as some of these swings are transitory, measures that aren’t as affected by the pandemic are also seeing sturdy price gains."

14:13
ECB: Avoiding taper talk - ING

Carsten Brzeski, the Global Head of Macro at ING, notes that the first outcome of today's European Central Bank (ECB) meeting is "no changes at all, not even tweaking the language on asset purchase front-loading". He suggests that the ECB clearly wants to avoid any taper talk and therefore chose to stay put.

"The ECB just announced...well, the ECB didn’t announce anything new. In fact, the just-released monetary policy decision was an anticlimax for those expecting any change. It is an almost verbatim copy of the April decision. No change in rates, no change in asset purchases and no change to the language that asset purchases will be conducted “at a significantly higher pace than during the first months of the year”."

"The ECB is obviously, and in our view rightly so, buying time despite higher actual inflation prints and the prospects of a further acceleration of inflation. With hard data not yet matching the optimism reflected in strong soft indicators, the ECB is currently choosing to err on the side of caution rather than withdraw monetary stimulus prematurely."

13:44
ECB raises 2021 GDP growth forecast to 4.6% from 4.0% previously estimated

  • 2022 GDP growth forecast raised to 4.7% from 4.1% previously estimated
  • 2023 GDP growth forecast remained unchanged at 2.1%
  • 2021 inflation forecast increased to 1.9% from 1.5% previously estimated
  • 2022 inflation forecast increased to 1.5% from 1.2% previously estimated
  • 2023 inflation forecast remained unchanged at 1.4%

13:34
U.S. Stocks open: Dow +0.57%, Nasdaq +0.08%, S&P +0.37%
13:27
Before the bell: S&P futures +0.13%, NASDAQ futures -0.21%

U.S. stock-index futures traded mixed on Thursday, as investors assessed the U.S. key inflation report, which showed a bigger-than-expected gain in price pressures in May.


Global Stocks:

Index/commodity

Last

Today's Change, points

Today's Change, %

Nikkei

28,958.56

+97.76

+0.34%

Hang Seng

28,738.88

-3.75

-0.01%

Shanghai

3,610.86

+19.46

+0.54%

S&P/ASX

7,302.50

+32.30

+0.44%

FTSE

7,102.01

+21.00

+0.30%

CAC

6,551.31

-12.14

-0.18%

DAX

15,583.50

+2.36

+0.02%

Crude oil

$70.27


+0.44%

Gold

$1,892.50


-0.16%

13:02
Wall Street. Stocks before the bell

(company / ticker / price / change ($/%) / volume)


3M Co

MMM

203.06

0.32(0.16%)

971

ALCOA INC.

AA

38.31

0.33(0.87%)

17319

ALTRIA GROUP INC.

MO

50

0.10(0.20%)

10632

Amazon.com Inc., NASDAQ

AMZN

3,284.00

2.85(0.09%)

40707

American Express Co

AXP

165.5

1.41(0.86%)

835

AMERICAN INTERNATIONAL GROUP

AIG

52.55

0.39(0.75%)

2567

Apple Inc.

AAPL

127.2

0.07(0.06%)

874297

AT&T Inc

T

29.09

0.08(0.28%)

74748

Boeing Co

BA

251.3

3.24(1.31%)

241222

Caterpillar Inc

CAT

235.75

1.10(0.47%)

4150

Chevron Corp

CVX

108.73

0.95(0.88%)

11256

Citigroup Inc., NYSE

C

78.94

0.80(1.02%)

72618

Deere & Company, NYSE

DE

350.25

0.72(0.21%)

918

E. I. du Pont de Nemours and Co

DD

84.1

-0.07(-0.08%)

11324

Exxon Mobil Corp

XOM

63.34

0.69(1.10%)

92286

Facebook, Inc.

FB

330.93

0.68(0.21%)

52886

FedEx Corporation, NYSE

FDX

294.55

1.44(0.49%)

14243

Ford Motor Co.

F

15.57

0.09(0.58%)

643855

Freeport-McMoRan Copper & Gold Inc., NYSE

FCX

40.9

0.20(0.49%)

156580

General Electric Co

GE

13.79

0.06(0.44%)

188596

General Motors Company, NYSE

GM

63.3

0.53(0.84%)

60136

Goldman Sachs

GS

386.8

4.02(1.05%)

21722

Google Inc.

GOOG

2,489.99

-1.41(-0.06%)

6228

Hewlett-Packard Co.

HPQ

30

-0.05(-0.17%)

2742

Home Depot Inc

HD

307.56

0.22(0.07%)

4833

Intel Corp

INTC

57.15

0.15(0.26%)

104220

International Business Machines Co...

IBM

151

0.33(0.22%)

6777

Johnson & Johnson

JNJ

166.4

0.81(0.49%)

3536

JPMorgan Chase and Co

JPM

164.49

1.55(0.95%)

51933

McDonald's Corp

MCD

232.38

0.91(0.39%)

402

Merck & Co Inc

MRK

74.74

0.70(0.95%)

50568

Microsoft Corp

MSFT

254.45

0.86(0.34%)

110858

Nike

NKE

132.1

0.26(0.20%)

6126

Pfizer Inc

PFE

39.89

0.08(0.20%)

83403

Procter & Gamble Co

PG

135

0.21(0.16%)

2348

Starbucks Corporation, NASDAQ

SBUX

111.75

0.36(0.32%)

7087

Tesla Motors, Inc., NASDAQ

TSLA

603.95

5.17(0.86%)

323338

The Coca-Cola Co

KO

55.78

0.30(0.54%)

24089

Twitter, Inc., NYSE

TWTR

59.78

0.07(0.12%)

66718

Verizon Communications Inc

VZ

57.16

0.11(0.19%)

78176

Visa

V

232

-0.31(-0.13%)

3499

Wal-Mart Stores Inc

WMT

139.26

0.18(0.13%)

8570

Walt Disney Co

DIS

176.68

0.64(0.36%)

15357

Yandex N.V., NASDAQ

YNDX

68.76

0.23(0.34%)

1908

13:01
ECB's president Lagarde: PEPP purchases will continue to be "significantly higher" than prior in the quarter ahead

  • Headline inflation forecasts remain below target over the forecast horizon
  • Underlying price pressure remains subdued due to slack
  • Projections signal a gradual increase in core inflation
  • Headline inflation likely to increase in coming months
  • Financing conditions are broadly stable
  • Overall risks are broadly balanced
  • Global demand, fiscal measures support activity in Eurozone
  • ECB will continue to monitor foreign exchange rate
  • Surveys point to a sizable improvement in the second quarter
  • Surveys indicate a strong services recovery
  • We expect growth to improve strongly in H2
  • Core inflation is projected to rise to 1.1% in 2021 to 1.3% in 2022, 1.4% in 2023
  • Temporary factors are behind inflation projection rise
  • Once the pandemic impact fades, underlying inflation will gradually rise in medium-term

12:51
U.S. weekly jobless claims total 376,000

The data from the Labor Department revealed on Thursday the number of applications for unemployment decreased less than anticipated last week, but again hit a fresh pandemic-era low.

According to the report, the initial claims for unemployment benefits decreased by 9,000 to 376,000 for the week ended June 5. This was the lowest reading since March 2020, when the COVID-19 pandemic struck.

Economists had expected 370,000 new claims last week.

Claims for the prior week were left unrevised at 385,000.

Meanwhile, the four-week moving average of jobless claims fell to 402,500 from an unrevised 428,000 in the previous week.

Continuing claims dropped to 3,499,000 from a downwardly revised 3,757,000 in the previous week.

12:41
U.S. consumer prices increase more than anticipated in May

The Labor Department announced on Thursday the U.S. consumer price index (CPI) rose 0.6 percent m-o-m in May, following an unrevised 0.8 percent m-o-m increase in the previous month.

Over the last 12 months, the CPI climbed 5.0 percent y-o-y, accelerating from +4.2 percent y-o-y reported for the period ending in April. This was the highest reading since August 2008.

Economists had forecast the CPI to rise 0.4 percent m-o-m and 4.7 percent y-o-y in the 12-month period.

According to the report, the index for used cars and trucks continued to rise sharply, climbing 7.3 percent m-o-m in May. This gain accounted for about one-third of the seasonally adjusted all items advance. Meanwhile, the food index rose 0.4 percent m-o-m, while the energy index was flat m-o-m as a drop in the gasoline index again offset gains in the electricity and natural gas indexes.

The core CPI excluding volatile food and fuel costs jumped 0.7 percent m-o-m in May after an unrevised 0.9 percent m-o-m climb in the previous month.

In the 12 months through May, the core CPI surged 3.8 percent compared to an unrevised 3.0 percent advance for the 12 months ending April. This was the largest 12-month increase since June 1992.

Economists had forecast the core CPI to increase 0.4 percent m-o-m and to 3.4 percent y-o-y last month.

12:30
U.S.: Initial Jobless Claims, June 376 (forecast 370)
12:30
U.S.: Continuing Jobless Claims, May 3499 (forecast 3602)
12:30
U.S.: CPI excluding food and energy, Y/Y, May 3.8% (forecast 3.4%)
12:30
U.S.: CPI, Y/Y, May 5% (forecast 4.7%)
12:30
U.S.: CPI, m/m , May 0.6% (forecast 0.4%)
12:30
U.S.: CPI excluding food and energy, m/m, May 0.7% (forecast 0.4%)
12:18
USD/CHF: Break above 0.9049/55 to confirm a base for a move to the 200-DMA at 0.9072 - Credit Suisse

FXStreet reports that USD/CHF posted a small bullish “hammer” yesterday from the range lows at 0.8930/25. However, analysts at Credit Suisse suggest that only a move above 0.9049/55 would complete a base.

“USD/CHF fell to the bottom of the range at 0.8930/25 yesterday, before reversing higher to post a small bullish ‘hammer’, with a growing RSI divergence and daily MACD cross still in place. We, therefore, stay biased towards a move higher, with first resistance at 0.9012, then 0.9048/55, above which confirm a base and open up a move back to the 200-day average at 0.9072, then 0.9098.” 

“The 0.9072, then 0.9098 levels need to cap to keep the broader, medium-term risks lower in our view, however, it’s worth noting that the potential ‘measured base objective’ projects a move well beyond here.” 

“Our broader bias stays lower whilst below 0.9072/98 and our base case is still that the market will find a cap here and turn back lower."

11:55
ECB leaves its main refinancing rate at 0.00% in May; pledges to continue to conduct net asset purchases under PEPP with total envelope of EUR1,850 billion until at least the end of March 2022

The European Central Bank (ECB) left its main refinancing rate unchanged at 0.00 percent on Thursday, as widely expected. Its interest rates on the marginal lending facility and the deposit facility were also left unchanged at 0.25 percent and -0.50 percent, respectively.

In its policy statement, the ECB said:

  • Governing Council expects key ECB interest rates to remain at their present or lower levels until it has seen inflation outlook robustly converge to level sufficiently close to, but below, 2% within projection horizon;
  • Governing Council will continue to conduct net asset purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of EUR1,850 billion until at least the end of March 2022 and, in any case, until it judges that coronavirus crisis phase is over;
  • Governing Council expects net purchases under PEPP over coming quarter to continue to be conducted at significantly higher pace than during the first months of the year;
  • Governing Council will purchase flexibly according to market conditions and with view to preventing tightening of financing conditions;
  • If favourable financing conditions can be maintained with asset purchase flows that do not exhaust envelope over net purchase horizon of PEPP, envelope need not be used in full;
  • Governing Council will continue to reinvest the principal payments from maturing securities purchased under PEPP until at least the end of 2023;
  • Net purchases under asset purchase programme (APP) will continue at monthly pace of EUR20 billion;
  • Governing Council will continue to provide ample liquidity through its refinancing operations (TLTROs);
  • Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in sustained manner, in line with its commitment to symmetry

11:45
Eurozone: ECB Interest Rate Decision, 0.0% (forecast 0%)
11:36
USD/CAD: BoC supports the loonie to overcome its consolidation phase - OCBC

FXStreet notes that the Bank of Canada (BoC) did not spring surprises, and remains on track despite a slowdown in employment numbers in recent months. This left the CAD tracking the broad USD closely. Economists at OCBC Bank see a period of potential consolidation for the loonie.

“The BoC left policy parameters unchanged in its decision yesterday. No signs that the existing BOC guidance will be derailed by two months of weaker than expected employment numbers, with the next taper in asset purchases due in the July decision.”

“Market implied expectations stand at approx. 2 hikes by end-2022, leaving the BoC still one of the most hawkish within the major central banks.” 

“Underlying support for the CAD is intact, but the near-term consolidative phase will have to be surmounted.”

11:18
USD/JPY: Sustained break above 109.64 to confirm a base for a move back to 110.77/97 - Credit Suisse

FXStreet reports that USD/JPY continues to hold key 55-day average and uptrend support at 109.29/19. Economists at Credit Suisse to look for a floor here with a sustained move above 109.64 needed to confirm a near-term base for a move back to 110.77/97, in line with an expected rise in yields.

“USD/JPY continues to defend key support from its 55-day average and uptrend from early January at 109.29/19 and we continue to look for a floor to be found here in line with 10yr US Bond yields also finding a floor at its key resistance at 1.50/475%.” 

“A sustained break above near-term resistance at 109.64 remains needed to confirm a near-term base is in place to ease the immediate pressure off this support for strength back to 109.96 initially ahead of 110.12 and then the 110.29/35 ‘reversal day’ highs. Beyond this latter area is needed to reassert the bull trend for 110.77/97.” 

10:56
European session review: EUR slips as investors await ECB's policy update and U.S. key inflation data

TimeCountryEventPeriodPrevious valueForecastActual
05:30FranceNon-Farm PayrollsQuarter I-0.1% 0.3%
06:45FranceIndustrial Production, m/mApril1%0.5%-0.1%


EUR fell slightly against most of its major rivals in the European session on Thursday as investors patiently awaited the announcement of the ECB's monetary policy decision and the release of the U.S. crucial inflation data for May.

The European Central Bank (ECB) is scheduled to announce its latest policy decision at 11:45 GMT. Markets do not expect the Bank to make any changes in the pace of its bond purchases or record-low interest rates, despite rising inflation concerns.

The May data on U.S. consumer prices, set to be released at 12:30 GMT, is expected to help determine whether the Federal Reserve might begin policy tightening sooner than planned.  The Fed’s policymakers have continued to reassure the markets that any jumps in inflation as the U.S. economy rebounds from the COVID-19 pandemic will be transitory. This thesis is to be tested by today’s CPI readings. Economists forecast the headline CPI rose 4.7% y/y in May, following a 4.2% climb in the previous month that was the highest in nearly 13 years. There are worries that the hotter-than-expected inflation data could cause the Fed to pare back its bond-buying program and the prospects of interest rate hikes in the U.S.

10:37
USD/CNH: Further rangebound likely - UOB

FXStreet reports that FX Strategists at UOB Group expect USD/CNH to trade between 6.3650 and 6.4050 for the time being.

24-hour view: “Our expectation for USD to ‘trade between 6.3900 and 6.4050’ yesterday was incorrect as it dropped to 6.3825. Downward momentum has improved and USD could weaken further to 6.3750. For today, the next support at 6.3700 is unlikely to come into the picture. Resistance is at 6.3900 followed by 6.3950.”

Next 1-3 weeks: “While 6.3750 is still intact, shorter-term momentum has more or less dissipated and USD is unlikely to strengthen. From here, USD is more likely to trade sideways within a range of 6.3650/6.4050.”

10:19
EUR/USD: The risk stays seen mildly lower whilst below 1.2208/18 - Credit Suisse

FXStreet reports that the Credit Suisse analyst team suggests that while below 1.2208/18, the EUR/USD pair can keep the immediate risk lower for further weakness to 1.2053/51.

“Early strength in EUR/USD yesterday was capped at price resistance at 1.2208/18 and with daily RSI and MACD momentum trending lower we maintain our immediate albeit mild defensive bias.”

“We continue to look for further weakness within the broader sideways range with support seen at 1.2144/34 initially, below which should see a fall back to 1.2103, then 1.2053/51 – the mid-May low and 38.2% retracement of the rally from late March and now also the rising 55-day average. Our bias is to then look for a floor here. A break though would expose the 200-day average and May low at 1.1989/85.” 

10:02
We are likely to see US consumer price inflation rise further - ING

FXStreet reports that economists at ING presented their forecasts for US inflation data, which will be released today.

“This week we are likely to see consumer price inflation rise further – our forecast is 4.8% YoY for May with core (ex-food and energy inflation) rising to 3.3% from 3%. For the former, this would mark the highest inflation reading since 2008 – when oil prices surged to $146/barrel – while for the core rate it would be the strongest reading since 1993! This should mark the peak in inflation, though, given much of it is being driven by comparing price levels in a vibrant reopening economy versus those of twelve months ago, when there were sharp falls in prices across the board as companies desperately sought cash. Nonetheless, supply chain issues, rising commodity prices, labour market shortages and rising house prices suggest to us inflation could remain more elevated and be more persistent than the Federal Reserve is publicly forecasting. This is a key factor why we think the Fed will raise the interest rate sooner than 2024.”

09:44
ECB expected to keep stimulus flowing despite inflation concerns

CNBC reports that market participants in Europe are actually expecting the ECB to keep its foot on the stimulus pedal this week.

Talk of a “taper” of pandemic-era bond purchases has reached a crescendo in many corners of the globe, but many believe the ECB will keep to its current path due to an uncertain economic outlook and to avoid an unwanted tightening of financial conditions.

Inflation has risen to levels not seen for a long time but the key questions are a) how reliable the data currently is as Covid-19 has changed consumption habits leading to a potential misrepresentation of the data? And b) how long will inflation be boosted by a post-lockdown effect?

“The re-opening of the economies will now bring many price mark-ups in the sectors hit the most by the lockdowns, be it as a result of regaining previous losses or passing through higher costs,” explained Carsten Brzeski, an ECB watcher with ING Diba, in a research note. 

“The effects will be transitory but could last easily until next year’s summer, keeping inflation elevated for a while,” he said.

Recent economic data suggests that with the vaccination rollout and the easing of lockdown measures across Europe, the euro zone economy will rebound strongly starting in the second quarter of this year. 

This might also lead the ECB to reassess the risk of the economic outlook from its “tilted to the downside” stance, to a “balanced” stance, according to Dirk Schumacher, an ECB watcher with Natixis.

09:25
AUD/USD: RBA Lowe speech and upbeat jobs data to support the aussie – Westpac

FXStreet reports that economists at Westpac discuss AUD/USD prospects.

“Our underlying bias is for USD depreciation but we should brace for volatility after the FOMC meeting. A$’s commodity price support remains very strong, with spot iron ore back to $212/t, coking coal at highs since Aug 2019 and oil (thus LNG) marching higher, though copper has softened. We suspect AUD/USD sees choppy price action postFOMC but with a fair value 0.84+, are happy to remain long from 0.7680. If Lowe gives clear support to those calling for QE tapering and May jobs rebound, the gap to fair value should shrink.”

09:06
China new bank loans unexpectedly rise in May

Reuters reports that according to data released by the People’s Bank of China (PBOC), China’s new bank loans unexpectedly rose in May from the previous month, even as the central bank has sought to contain rising debt in the world’s second-largest economy.

Chinese banks extended 1.5 trillion yuan ($234.76 billion) in new yuan loans in May, up from 1.47 trillion yuan in April and beating analysts’ expectations of 1.41 trillion yuan.

The tally also was higher than the 1.48 trillion yuan issued the same month a year earlier, when policymakers rolled out unprecedented measures to deal with the shock from the coronavirus crisis.

Growth in outstanding yuan loans eased to 12.2%, the slowest pace since February 2020, and compared with 12.3% in April. Analysts had expected 12.2% growth.

Broad M2 money supply grew 8.3% from a year earlier, above estimates of 8.1% forecast in the Reuters poll, which matched the pace in April.

08:44
Commodities are likely set for a bumpy ride – ANZ

FXStreet reports that strategists at ANZ Bank discuss commodities prospects.

“China is actively looking to limit coal consumption, which is already resulting in a boom for LNG imports. China is also increasing its efforts to limit the impact of heavy industry on the environment. Steel and aluminium are two of the sectors that have been targeted with recent curbs on output. However, Beijing is also looking to limit exports in an effort to reduce emissions. The use of scrap metal in the production process, a more energy efficient process, will also be encouraged. The impact on the commodity market is unlikely to be uniform. Global steel and aluminium markets (ex-China) could tighten, pushing prices higher. However, increased use of scrap could weigh on certain raw materials. The rising cost of this energy transition could also further raise inflation concerns and heighten fears of tightening monetary conditions.”

08:23
Global food import costs to surge 12% to record this year -FAO

Reuters reports that the the Food and Agriculture Organization (FAO) said that global food import costs are expected to rise 12% in 2021 to a record due to surging commodity prices and robust demand during the COVID-19 crisis.

The world's food import bill, including shipping costs, is projected to reach $1.715 trillion this year, from $1.530 trillion in 2020, the FAO said.

Growth in agricultural trade during the pandemic showed the inelastic nature of food consumption and the resilience of international markets, but price rises since late 2020 were raising risks for poorer import-reliant countries, the FAO said.

Its monthly food price index hit a 10-year high in May, reflecting sharp gains for cereals, vegetable oils and sugar.

The FAO said a separate index of food import values, including freight costs that have also soared, reached a record in March this year, surpassing levels seen during previous food price spikes in 2006-2008 and 2010-2012.

08:01
Euro and sterling set to gain on recovery – Westpac

FXStreet reports that economists at Westpac discuss the prospects of the euro and the pound.

“We continue to expect the FOMC and other major central banks to 'hold the line' on policy for an extended period, anticipating that a US taper will not be seen until the second half of 2022 and that rate hikes will follow with a lag come 2024. Relative economic growth will arguably then remain the most compelling factor for FX markets in the period ahead.” 

“For DXY, we look for a further 3.2% fall to 87.3 in the second half of 2022 after which the US dollar is expected to stabilise and begin to grind higher as US monetary tightening takes effect.”

“Between now and September 2022, the euro is expected to gain 4.3% from 1.2179 currently to 1.27 on sentiment and strength in exports. Having outperformed the euro in recent months, future gains for the UK's sterling are likely to be modest, a 1.8% rise to 1.44 is our base case.”

07:39
UK house prices continued to increase in May - RICS

RTTNews reports that survey results from the Royal Institution of Chartered Surveyors (RICS) showed that UK house prices continued to increase in May driven by robust demand and a shortfall of new instructions.

The house price balance rose to 83 percent in May from 76 percent in April. This was the fourth successive month in which upward pressure on house price seemingly intensified, RICS said.

A net 45 percent of respondents expect house prices to rise in the near-term, which was virtually unchanged from the net 47 percent in April.

Likewise, twelve month price expectations remained elevated, with a net balance of +64 percent of contributors anticipating an increase over the year to come.

Newly agreed sales also increased in May, evidenced by a net balance of +30 percent of contributors reporting an increase.

07:19
Asian session review: the dollar rose slightly against most currencies

TimeCountryEventPeriodPrevious valueForecastActual
01:00AustraliaConsumer Inflation ExpectationJune3.5% 4.4%
05:30FranceNon-Farm PayrollsQuarter I-0.1% 0.3%
06:45FranceIndustrial Production, m/mApril1%0.5%-0.1%


During today's Asian trading, the US dollar rose slightly against the euro and declined moderately against the yen.

Traders are waiting for data on changes in consumer prices in the US in May, which will be released today at 12:30 GMT. The average forecast of analysts suggests an acceleration in inflation to 4.7% in annual terms. Consumer prices rose 4.2% in April, the fastest pace since September 2008.

The US Federal Reserve has previously said that inflationary pressures are temporary as the economy continues to recover from the crisis caused by the COVID-19 pandemic. However, the accelerating pace of the consumer price recovery is causing concern among analysts and traders.

In addition, the focus of traders ' attention is the meeting of the European Central Bank (ECB). The ECB is likely to announce a continuation in the third quarter of the pace of asset repurchases under the anti-crisis program Pandemic Emergency Purchase Program (PEPP) at a similar or slightly lower level compared to the second quarter, analysts predict. At the same time, the regulator may give a more optimistic assessment of the prospects for the euro zone economy, while inflation forecasts are expected to remain virtually unchanged.

The ICE index, which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose by 0.05%.

07:01
French industrial production unexpectedly declined in April

MarketWatch reports that data from statistics agency Insee showed that French industrial production fell slightly in April, missing expectations for an increase.

Total industrial output--comprising output in manufacturing, energy and construction--decreased 0.1% in April compared with March. Economists had forecast a 0.5% increase in April.

Insee upwardly revised the on-month industrial production figure for March to a 1.0% increase from a 0.8% rise previously.

Compared with February 2020 total industrial output was down 5.5% in April 2021 in calendar-adjusted terms.

06:48
Options levels on thursday, June 10, 2021 EURUSD GBPUSD

EUR/USD

Resistance levels (open interest**, contracts)

$1.2275 (792)

$1.2253 (490)

$1.2236 (358)

Price at time of writing this review: $1.2169

Support levels (open interest**, contracts):

$1.2128 (572)

$1.2100 (1369)

$1.2066 (1008)


Comments:

- Overall open interest on the CALL options and PUT options with the expiration date June, 9 is 36256 contracts (according to data from July, 9) with the maximum number of contracts with strike price $1,1650 (3889);


GBP/USD

$1.4207 (257)

$1.4170 (146)

$1.4139 (113)

Price at time of writing this review: $1.4114

Support levels (open interest**, contracts):

$1.4035 (314)

$1.4010 (662)

$1.3957 (2973)


Comments:

- Overall open interest on the CALL options with the expiration date July, 9 is 12729 contracts, with the maximum number of contracts with strike price $1,4500 (3552);

- Overall open interest on the PUT options with the expiration date July, 9 is 14180 contracts, with the maximum number of contracts with strike price $1,4000 (2973);

- The ratio of PUT/CALL was 1.11 versus 1.12 from the previous trading day according to data from June, 9

 

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

06:45
France: Industrial Production, m/m, April -0.1% (forecast 0.5%)
06:31
ECB to plot next phase of pandemic bond buying

Bloomberg reports that ECB officials will decide on Thursday just how much monetary stimulus the euro zone needs as it emerges from coronavirus lockdowns over the summer.

After ramping up their bond-buying program in the second quarter to keep borrowing costs in check, it’s time for officials to settle on a new pace for the months ahead.

Most economists expect them to lock in the current pace for another three months. The ECB is unlikely to publicly set a specific target though, forcing investors to read between the lines of the policy statement, new economic forecasts, and President Christine Lagarde’s press conference.

The backdrop is a resurgent economy fueled by higher vaccination rates and falling infections that are reviving European restaurants, shops and beaches. That’s also driving a jump in prices, raising the question of when the ECB should act to keep inflation under control.

The key phrase to look out for is whether the ECB expects to buy debt under its Pandemic Emergency Purchase Programme at a “significantly higher pace than during the first months of the year.”

Net buying under the 1.85 trillion-euro ($2.3 trillion) program is currently running at about 20 billion euros a week, up from 14 billion euros a week at the start of the year.

Most economists say they no longer expect a significant reduction in the coming quarter, after policy makers including Lagarde rebuffed the notion that the economy could cope.

06:15
China's top banking regulator warns of bad debt, local real estate bubbles

Reuters reports that China's top banking and insurance regulator said banks should guard against a rise in non-performing assets, as the country rolls back some of the relief measures implemented during the pandemic to help firms withstand the fallout.

"The default rate for some large and medium-sized enterprises has risen, and the credit risks at banking institutions has intensified," Guo Shuqing told a financial forum in Shanghai via a video message.

He said a growing trend of local real estate bubbles remained "serious".

Corporate bond defaults have risen sharply in China in recent years, reaching $14 billion in 2020, according to the Institute of International Finance. Chinese banks extended a record $3 trillion in new loans in 2020, according to data from the People's Bank of China.

Investors should also be aware of potential investment losses on financial derivative products, commodity-linked futures, and rising Ponzi schemes, Guo said.

The regulator will also resolutely clean up illegal security issuance activities and fend off the pick-up in shadow banking activities, Guo added.

05:59
Japan producer prices climb 0.7% in May

RTTNews reports that the Bank of Japan said that producer prices in Japan were up 0.7% on month in May. That exceeded expectations for an increase of 0.5% and was down from 0.9% in April.

On a yearly basis, producer prices climbed 4.9%, beating forecasts for 4.5% and up from 3.6% in the previous month.

The Bank of Japan said that export prices were up 1.0% on month and 11.0% on year, while import prices rose 2.2% on month and surged 25.4%on year.

05:36
France: Non-Farm Payrolls, Quarter I 0.5%
02:30
Commodities. Daily history for Wednesday, June 9, 2021
Raw materials Closed Change, %
Brent 72.02 -0.22
Silver 27.763 0.68
Gold 1888.726 -0.15
Palladium 2770.09 -1.06
01:01
Australia: Consumer Inflation Expectation, June 4.4%
00:30
Schedule for today, Thursday, June 10, 2021
Time Country Event Period Previous value Forecast
01:00 (GMT) Australia Consumer Inflation Expectation June 3.5%  
05:30 (GMT) France Non-Farm Payrolls Quarter I -0.1%  
06:45 (GMT) France Industrial Production, m/m April 0.8% 0.5%
11:45 (GMT) Eurozone ECB Interest Rate Decision 0.0% 0%
12:30 (GMT) U.S. Continuing Jobless Claims May 3771 3602
12:30 (GMT) U.S. Initial Jobless Claims June 385 370
12:30 (GMT) Eurozone ECB Press Conference    
12:30 (GMT) U.S. CPI excluding food and energy, m/m May 0.9% 0.4%
12:30 (GMT) U.S. CPI excluding food and energy, Y/Y May 3% 3.4%
12:30 (GMT) U.S. CPI, Y/Y May 4.2% 4.7%
12:30 (GMT) U.S. CPI, m/m May 0.8% 0.4%
18:00 (GMT) U.S. Federal budget May -226  
22:30 (GMT) New Zealand Business NZ PMI May 58.4  
23:50 (GMT) Japan BSI Manufacturing Index Quarter II 1.6  
00:15
Currencies. Daily history for Wednesday, June 9, 2021
Pare Closed Change, %
AUDUSD 0.77286 -0.08
EURJPY 133.485 0.17
EURUSD 1.21775 0.05
GBPJPY 154.715 -0.12
GBPUSD 1.41137 -0.24
NZDUSD 0.71758 -0.26
USDCAD 1.21081 -0.01
USDCHF 0.89541 -0.14
USDJPY 109.605 0.12

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