Market Roundup
• ORB Poll on UK EU referendum: “Leave” has 10-point lead vs “Remain” – ORB for Independent.
• U Mich consumer sentiment index prelim June 94.3 v final May 94.7, conditions beat 111.7 v 108.8 forecast.
• U Mich 1-yr inflation prelim steady at 2.4%, 5-yr 2.3% V 2.5% previous.
• Canada adds 13.8k jobs in May vs f/c of 3.8k; unemployment at 10-month low.
• ECB’s Constancio increasingly aware of limits of monetary policy.
• ECB’s Rimsevic: ECB ready to use all tools if necessary in case of Brexit.
• Sterling falls hard as Brexit campaign enters final fortnight, hedging costs rise.
• Oil down 3 percent as U.S. drillers add rigs, strong dollar weighs.
Looking Ahead – Economic Data (GMT)
• 23:50 Japan Business Survey Index* Q2 -7.9-previous.
• 2:00 China Urban investment (ytd) yy May forecast 10.5%, 10.5%-previous
• 2:00 China Industrial Output YY* May forecast 5.9%, 6%-previous
• 2 00 China Retail Sales YY* May forecast 10.1%, 10.1%-previous
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1218 levels and currently trading at 1.1252 levels. The pair has made session high at 1.1305 and hit lows at 1.1242 levels. The euro drifted lower against the dollar on Friday as traders were puzzled over continuing concerns about global growth and a potential British exit from the EU. Meanwhile, U.S. and Japanese policymakers are expected to produce no surprises at meetings next week. Following a poor May jobs report, the Federal Reserve is widely expected to leave policy rates unchanged The U.S. dollar index, which measures the dollar against a basket of currencies, added to earlier gains to touch a one-week high after a University of Michigan survey showed U.S. consumer sentiment eroded less than forecast in early June. The index was up 0.69 percent at 94.602. The euro plumbed its lowest since one week at $1.1242. It was last trading at $1.1252.
GBP/USD is supported in the range of 1.4175 levels and currently trading at 1.4267levels. It reached session high at 1.4408 and hit low at 1.4175 levels. The British pound fell to a seven-week low against the dollar on Friday, hurt by a poll showing support for those who want Britain to leave the European Union is rising, adding to growing uncertainty about the June 23 membership referendum. A poll by ORB for The Independent paper published on Friday showed the “Leave” camp had a 10-point lead over “Remain. The “Leave” camp has a 10-point lead over “Remain” less than two weeks before Britain's referendum on whether to stay in the European Union, according to a poll by ORB for The Independent newspaper, published on Friday. Since falling to a low of $1.38 in February, the pound has held up well in the face of concerns that a vote to leave would undermine economic growth and create problems with the financing of the country's huge current account gap.
AUD/USD is supported around 0.7356 levels and currently trading at 0.7377 levels. It hit session high at 0.7417 and made session lows at 0.7366 levels. The Australian dollar inched lower against US dollar on Friday, as a decline in oil prices towards $48 a barrel and slight strength in US dollar weakened commodity-related currencies. The Aussie has powered up more than 1 percent this week against the euro, yen, and pound. The bounce came after the Reserve Bank of Australia (RBA) wrong-footed doves with the omission of a clear easing bias in its monthly policy review statement. The RBA on Tuesday kept rates at a record low of 1.75 percent, taking a pause after last month's cut and recent data showing reasonable strength in the economy. The Australian dollar declined to hit low at $0.7368, after finding resistance at $0.7515 on Thursday. It was still up for a second consecutive week with a gain of 0.6 percent.
USD/CAD is supported at 1.2657 levels and is trading at 1.2758 levels. It has made session high at 1.2780 and lows at 1.2673 levels. The Canadian dollar strengthened against its U.S. counterpart on Friday after data showed stronger-than-expected domestic jobs data, although gains for the risk-sensitive commodity-linked currency were restrained as oil prices and stocks fell. Canada added far more jobs than expected in May as hiring picked up in construction and manufacturing, although a drop in the unemployment rate to a 10-month low stemmed from fewer people looking for work. Statistics Canada data released on Friday showed an increase of 13,800 positions last month, topping economists' forecasts for a gain of just 3,800 jobs. The Canadian dollar strengthened against the greenback immediately following the report but, gave up most the gains as oil prices fell towards $48.85.
Equities Recap
European shares fell to near a four-week low on Friday, with Lufthansa dropping after the surprise departure of its finance chief, while political worries put pressure on cyclical stocks on the last trading day of the week.
UK's benchmark FTSE 100 closed down 1.8 percent, the pan-European FTSEurofirst 300 ended the day down by 2.28 percent, Germany's Dax ended down 2.51%, France’s CAC finished the day down by 2.21 percent.
U.S. stocks dropped for a second straight day on Friday following another drop in oil prices and renewed worries about the global economy.
Dow Jones closed down by 0.66 percent, S&P 500 ended down by 0.91 percent, Nasdaq finished the day down by 1.28 percent.
Treasuries Recap
U.S. Treasury yields fell to four-month lows on Friday as European sovereign debt yields plunged on concerns about a potential British exit from the European Union and global growth.
Benchmark 10-year notes ended up 12/32 in price to yield 1.639 percent, after earlier falling to 1.627 percent, the lowest since Feb. 11.
Commodities Recap
Oil prices settled down 3 percent on Friday after data showing the U.S. oil drilling rig count rising for a second week in row and a stronger dollar weighed on demand for greenback-denominated crude futures.
Brent's front-month settled down $1.41 at $50.54 a barrel, losing 2.7 percent for its largest drop in a month.
The front-month in U.S. crude's West Texas Intermediate (WTI) futures fell $1.49 to $49.07, down 3 percent, marking the largest slide since early April.
Gold rebounded to a fresh three-week high on Friday, as investor risk aversion lifted appetite for the metal, putting it on track for a second straight weekly rise.
Spot gold rose as high as $1,277.70 an ounce, its highest since May 18, and was up 0.4 percent at $1,273.21 an ounce by 2:08 p.m. EDT (1808 GMT). It was negative earlier.
U.S. futures for August delivery settled up 0.3 percent at $1,275.90 an ounce.
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