On North Korea willingness to resolve issues with the US, risk-off mood eased somewhat in Asia on the final trading of the week, lifting the sentiment around the higher-yielding assets such as equities and Treasury yields. However, markets remained on the edge since Trump canceled the June North Korea Summit, keeping the downside capped in the safe-havens Yen and gold.
Among the Asia-pac currencies, USD/JPY rebounded from two-week lows, but upside stalled near 109.75 levels. The Antipodeans traded on the back foot amid rife geopolitical tensions and broad-based US dollar strength while a lack of fresh economic news also left most majors at mercy of the risk trends and USD dynamics.
Main topics in Asia
North Korea willing to meet with the U.S. at any time
Wires are crossing that North Korea are willing to meet with the U.S. at any time …
Canada PM pins new US tariff talk on NAFTA – Reuters
As reported by Reuters, Canada’s Prime Minister, Justin Trudeau, accused the Trump administration of “flimsy logic” regarding a new investigation into placing tariffs on foreign vehicles imported into the US, and suggested the move is specifically linked to NAFTA talks.
Fed will raise rates three more times this year – Reuters poll
Federal Reserve will hike rates three more times this year, pushing the interest rates to 2.25 percent – 2.5 percent by the year-end, according to latest Reuters poll.
Mexico will not be pressured into NAFTA renegotiation but will make counter-offer – Reuters
As reported by Reuters, Mexico is staunchly refusing to cave to US pressure to conclude the stalled-out NAFTA renegotiations.
US Commerce Secretary Ross to visit China June 2-4 to discuss trade issues – Xinhua
Xinhua, China’s state-run news agency, is out with the latest headline, citing that the US Commerce Secretary Wilbur Ross is scheduled to visit China from June 2nd to 4th to discuss the impending trade issues.
Gold clocks 10-day high above $1300
Currently, gold (XU/USD) is trading at $1,302/Oz, having clocked a ten-day high of $1,306 in the overnight trade. The yellow metal picked up a bid yesterday, possibly due to renewed geopolitical tensions and the resulting risk aversion in the equity markets.
Key Focus ahead
Today’s EUR calendar offers the German IFO business climate and the second estimate of UK Q1 GDP, which will be reported at 0830 GMT alongside the release of the prelim business investment and other minority reports. Meanwhile, the ECOFIN meetings will go on all through the day. These meetings are usually held in Brussels and attended by Finance Ministers from EU member states.
Meanwhile, the Reserve Bank of Australia (RBA) Assistant Governor Bullock will speak at 1200 GMT at De Nederlandsche Bank’s Housing Market seminar, in Amsterdam. His speech will be followed by the key US durable goods and Revised UoM Consumer Sentiment data.
A bevy of central bank speakers is lined up to make their respective speeches in the NA session, which will wrap up an eventful macro week.
1315 GMT – ECB Coeure’s speech
1320 GMT – Fed Chair Powell’s speech
1320 GMT – BOE Governor Carney’s speech
1545 GMT – Fed Kaplan speech
1545 GMT – Fed Bostic speech
1545 GMT – Fed Evans speech
1920 GMT – ECB Weidmann’s speech
EUR/USD: Bullish tinge, but hard to be optimistic longer term
The pair could find acceptance above 1.1750 today and may rise even further if the US durable goods figure, scheduled for release at 12:30 GMT, disappoints expectations.
GBP/USD continues to pout, buyers remain silenced ahead of the UK’s GDP figures
The Sterling has been hammered by drooping economic figures that saw the Bank of England forced to walk back an expected rate hike in May, and today’s quarterly GDP figures will see traders hoping for some good news.
UK: Recent activity data point to Q1 GDP growth at 0.1% q/q – Barclays
The Barclays Research Team offers a sneak peek at what to expect from today’s UK GDP second estimate for the first quarter, slated for release at 0830 GMT.
Key US data previews – Nomura
Analysts at Nomura previewed the forthcoming key US data for the end of the week.
Heading for the Friday finish line with a long weekend looming in both US and UK, we should expect some position consolidation.