There was no common theme in markets overnight, with equities slightly lower (S&P500 -0.3%), bond yields and commodities slightly higher, and the US dollar slightly lower. Commodities, Brent crude oil futures rose 1.3% to $69.50, copper rose 1.4%, and gold rose 1.2%, while iron ore rose 1.9% to $213.65.
Overnight Currency Ranges
AUD/USD 0.7731 0.7787
EUR/USD 1.2126 1.2169
GBP/USD 1.4078 1.4146
USD/JPY 109.07 109.50
NZD/USD 0.7182 0.7249
USD/CAD 1.2061 1.2136
USD/CNH 6.4374 6.4500
AUD/JPY 84.47 85.14
AUD/NZD 1.0724 1.0778
A quieter day expected ahead where the Minutes of the May RBA board meeting will be scrutinised for any signals with respect to the future of the QE and yield target policies (which will be determined in early July). The AUD/USD traded in a tight 0.7731/87 range to start the week with the initial weakness short lived. Technical support rests ahead of 0.7700 while topside resistance should emerge as we approach 0.7815/20.
Event Risk Data Today
Australia: The RBA will publish the Minutes of the May Board Meeting. The focus will be on commentary around QE and Yield Curve Control, given that the Board will decide whether to extend these policies at the July meeting.
Japan: GDP is expected to contract 1.1% in Q1, with the state of emergency constraining household activity over the quarter.
Euro Area: The second estimate of Q1 GDP will provide more information around the contributions to output (market f/c: -0.6%qtr, -1.8%yr). Meanwhile, the March trade balance is expected to print at EUR 19.1bn, after rising imports pared back the surplus in the February update.
UK: The March ILO unemployment rate is expected to hold at 4.9% with the extended furlough scheme continuing to hold down job losses.
US: April building permits are expected to rise 0.6%, while housing starts should ease off after a catch-up surge in March (market f/c: -2.0%). The FOMC’s Kaplan will participate in a Panel Discussion at the Atlanta Fed