Good Morning,
Market Headlines
BOE announced its intention to increase QE program by an additional GBP100bn (total now GBP745bn), benchmark Bank Rate unchanged at 0.10%. US Philly Fed manufacturing data surprised markets having surged to +27.5 (vs est. -21) from -43.1 in May. US Employment data came in worse than expected coupled with a worrying trend in infection rates in some US states pushed risk assets slightly lower overnight with both the S&P 500 and the Dow Jones finishing 0.3% lower while the NASDAQ gained 0.3%. Oil bucked the trend and finished up 2.3% on the day while US yields were flat.
Currencies
- The US dollar rose by 0.3% (two-week high)
- EUR ranged between 1.1260 to 1.1186.
- GBP dropped from 1.2550 to 1.2402, as the BoE maintained a dovish overall bias.
- USD/JPY ranged between 106.70 and 107.15.
- AUD ranged between 0.6900 to 0.6836.
- NZD traded between 0.6465 to 0.6419.
- AUD/NZD slipped further from 1.0680 to 1.0635.
AUD Thoughts
- AUD/USD struggles to keep the bounce from a three-day low of 0.6835.
- Florida and Texas and Beijing in virus concerns, Germany, Portugal also keep fears of wave 2.0 alive.
- Equities dwindle amid mixed data and geopolitical tension.
- A light calendar keeps the Aussie at the mercy of qualitative catalysts.
One-week-old falling trend line favours the AUD/USD pair to keep the weakness after breaking monthly support, now resistance. The downbeat sentiment also takes clues from the
moving average convergence/divergence (MACD) histogram that posts the strongest bearish signals since late-March. Even so, 21-day simple moving average (SMA) near 0.6810 can offer immediate support to the quote ahead of dragging it to near 0.6665, comprising 200-day SMA. Meanwhile, buyers will wait for a clear break above 0.6930 for fresh entries while targeting 0.7000 threshold.
Event Risk Data Today
- Australia: May’s preliminary retail trade has expectations for a strong bounce back of 12.0% after April’s 17.7% slump.
- Japan: CPI reading for May expected for no change in consumer prices versus a year ago as they remain on the cusp of deflation.
- UK: May retail sales expectations to be positive, with early signals of recovery in preliminary industry data.
- US: FED Chair Powell and other members (03:00 AEST), Rosengren (00:15 AEST) and Quarles (02:00 AEST) will speak at separate events.