Forex News from InstaForex

Wall Street Higher Supported by Comey Relief

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U.S. equities finished higher on Wednesday after written testimony from former FBI director James Comey did not provide major revelations regarding the probe into Russian meddling with 2016's presidential election.

The Dow Jones industrial average climbed 0.18 percent to end at 21,173.69, with Nike leading gains while Coca-Cola lagged behind. The S&P 500 added 0.16 percent to close at 2,433.14, as financials led eight sectors up and energy declined the most. The Nasdaq composite rose 0.36 percent to finish at 6,297.38.

The stock market mostly fluctuated this week as investors held off from making large wagers ahead of Comey's testimony.

Equities were pressured by the near two percent decline in the S&P 500's energy sector. All but two of the 34 components of the sector dropped as U.S. crude futures plunged five percent because of the sudden increase in U.S. inventories.

Signet Jewelers was the biggest percentage advancer on the S&P 500, which climbed four percent. Newfield Exploration was the biggest decliner by tumbling seven percent.

Investors are currently focused on Britain's general election and the European Central Bank's policy meeting, both on Thursday.

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Uk Election: Odds are in Decline for Conservatives

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After exit polls somewhat shocked the market and pointing to YouGov model prediction just weeks ago that forecasted a hung parliament weeks ago, betting odds are in decline, except for the odds for most seats.

The betting market is pricing 93 percent probability that the Conservative will win most of the seats in 650 members’ parliament.

The market is pricing less than 62 percent probability that Theresa may be the next Prime Minister. The odds for Jeremy Corbyn has moved higher from 20 percent to 33 percent.

The market is also pricing 66 percent probability that the Conservatives will be able to hold on to their majority in the election. The odds of a Labour Party majority is currently at less than 7 percent.

The odds of a hung parliament has moved up from less than 20 percent before the election to 33 percent as of now.

Foreign Secretary Boris Johnson is the favorite with 30 percent odds to become the next Conservative Party leader if Theresa May is replaced.

Results so far:
So far, the Labour Party has won 10 seats, while the Conservatives have secured wins in five. Still, a very long way to reach the magic figure (326).

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Dow Touches Record High but Ends Flat After Comey Testimony

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U.S. equities finished mostly higher on Thursday as Wall Street priced in former FBI Director James Comey's testimony. The “Trump trade” made a comeback but the S&P and Dow industrials eventually ended little changed.

The Dow Jones industrial average climbed 0.04 percent to finish at 21,182.53, as Caterpillar led gains while Walt Disney lagged behind. The S&P 500 added 0.03 percent to 2,433.79, with financials leading five sectors up and utilities was the largest decliner. The Nasdaq composite rose 0.39 percent to end at 6,321.76.

The Trump 'reflation trade' was back for the day with the S&P 500 financial sector gaining 1.1 percent.

The S&P 1500 construction and engineering index climbed 1.4 percent while the measure of construction materials stocks rose 1.5 percent. The S&P 1500 steel sector index advanced 4.1 percent, the most since April 20.

The announcement of Commerce Secretary Wilbur Ross that a national security review of the U.S. steel industry will be made to protect interests of domestic steel producers and consumers had bolstered infrastructure stocks.

Utilities stocks dropped the most on the S&P 500 as Treasury yields rose. The S&P utilities sector fell 0.88 percent, the most since mid March.

Among stocks active in corporate news, Alibaba jumped 13.3 percent to $142.34 after the company said it sees revenue growth of 45 to 49 percent in the 2018 fiscal year. Yahoo, which has a 15.5 percent stake in Alibaba, advanced 10.2 percent to $55.71.

Chipmaker Nvidia bounced 7.3 percent to $159.94 after Citigroup cited its bullish outlook on the stock and said in the long term it could reach $300.

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Australian Economy Likely to have added 10,000 Jobs in May

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The data released last week indicated that the Australian economy grew at an annualized rate of 1.7 percent in the first quarter. Even with subdued growth, the labor market added 37,400 jobs in April. Most of the employment gains in the month was driven by part time employment, rising 49,000. This more than countered the 11,000 drop in full-time employment.

The participation rate remained stable at 64.8 percent as the unemployment rate dropped two tenths of a percentage point to 5.7 percent, approaching a low not seen since 2013, noted Wells Fargo. Even if employment growth has been solid, wage growth has been more stagnant.

However, the economy is likely to have added 10,000 jobs in May, according to consensus forecast. The forward momentum of labor market permitted the Reserve Bank of Australia to keep rates on hold at 1.5 percent during its latest meeting.

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Treasury Yields Continue to Rally Ahead of Fed Meeting

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U.S. government bond yields edged up as prices retreated ahead of the closely monitored two-day U.S. Federal Reserve policy meeting scheduled to start on Tuesday.

The yield on the two-year Treasury note, which is particularly sensitive to shifts in Fed policy, advanced 2.1 basis points to 1.359 percent. Meanwhile the yield on the 10-year note advanced 1.4 basis points to 2.215 percent. The yield on the long bond or the 30-year bond advanced 1.5 basis points to 2.867 percent.

Treasury yields rallied due to expectations of a quarter-point rate increase by the Fed by the end of the June policy meeting. Aside from this, investors will also be looking for clues on the pace of the rate increases after the latest one, with odds of a fifth rate hike since December 2015 falling below 50 percent.

Market participants are also expected to look forward to consumer price data slated to be released on Wednesday as Fed policymakers called the weak consumer price data in March and April as temporary to build up a June rate hike.

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New Zealand Food Prices Gain 2.4% In May

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Food prices in New Zealand were up 2.4 percent on month in May, Statistics New Zealand said on Wednesday - following the 0.8 percent gain in April.

Fruit and vegetable prices rose 8.2 percent on month, while meat, poultry, and fish prices rose 2.3 percent.

Seasonally adjusted, food prices gained 1.6 percent on month.

On a yearly basis, prices were up 3.1 percent.

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Tech Stocks’ Rebound Sends Wall Street to Close at Records

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The Dow and the S&P 500 notched fresh record highs as technology shares regained footing following two days of selloff. But investors are now setting their sights on an expected Federal Reserve interest rate hike after the central bank's two-day June policy meeting.

Tech shares were hit by sell offs on Monday, extending from a downturn at the end of last week and dragging broader index particularly the tech-heavy Nasdaq. On Tuesday, the S&P 500 tech sector regained footing and rebounded by 0.9 percent after its biggest two-day losing streak in almost a year. Microsoft and Facebook led the index higher.

The Dow Jones Industrial Average advanced 92.80 points or 0.4 percent to end at 21, 328.47 after hitting a historic intraday peak of 21, 332.77. Meanwhile, the S&P 500 index advanced by 10.96 points to end at 2,440.35, also entering record territory, bolstered by materials and IT sectors.

The Nasdaq Composite Index advanced 44.90 points or 0.7 percent to close at 6,220.37.

Analysts said that with regards to the Fed meeting, investors had already priced in a rate-hike and is seen to have little impact to the market. Investors are also confident with the concept that the Fed will continue to be cautious to ensure that the higher rates will not slow down growth.

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New Zealand Reports Stable Q1 Economic Growth Despite Slowdown in Building Activity

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The New Zealand economic growth accelerated slightly on a sequential basis in the first quarter of this year. GDP grew 0.5 percent after rising 0.4 percent in the fourth quarter of 2016, showed Statistics New Zealand.

"Much lower building activity combined with mixed results for the service sector took the shine off higher dairy production and saw a second quarter of moderate overall GDP growth. At an industry level, 11 out of 16 industries increased this quarter, with agriculture and retail trade having the biggest increases, while construction was significantly down,” said national accounts senior manager Gary Dunnet.

Construction dropped 2.1 percent, with all building sectors indicating a decline. Non-residential building construction, declining from a recent peak, was the important driver. This was also reflected with declining investment in both residential and non-residential building construction.

Service industries activity came in mixed, rising 0.4 percent in the first quarter. Retail trade and accommodation mainly drove the service growth. On the contrary, postal, transport and warehousing and rental hiring and real-estate services dropped.

Household spending rebounded in the first quarter, growing 1.3 percent. This shows solid growth in retail trade. This rise added to the year-on-year growth rate of 4.7 percent, the largest rise in household spending in more than a decade. Meanwhile, net exports dropped in the March quarter. Exports of goods and services dropped 0.4 percent, while imports of goods and services were up 1.3 percent.

On a year-on-year basis, the GDP growth of New Zealand came in at 3 percent.

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U.S. Bank Shares Regain Footing after Earlier Retreat

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Shares of U.S. lenders rebounded in New York afternoon trading after being hit by weak retail sales and inflation data released earlier in the day, causing investors to flock to the more defensive areas in the equity market.

The broader financial sector of the S&P 500 index slid 0.6 percent before regaining footing later in the session, ending 0.2 percent up. The KBW index, which monitors both regional and national banks, slid 1.2 percent to 93.19 at one point but finished 0.1 percent up at 94.44.

The S&P financial sector has followed suit of the broader index but jitters surrounding the Federal Reserve's decision to hike rates, along with fresh details regarding the central bank's plan to shrink its balance sheet, caused it to end 0.1 percent down at 2,437, regardless of gains 0.6 percent of the utilities sector.

Energy companies' shares also struggled during the session, with S&P 500's energy sector sliding 1.8 percent after a 3.5 percent drop in the price of the international benchmark brent to $47.02 per barrel.

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Fxwirepro: Usd/jpy Hits Fresh 2-Week High at 111.14 Mark, Markets Await Boj’s Policy Rate Decision

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USD/JPY is currently trading around 111.03 marks.

It made intraday high at 111.14 and low at 110.81 levels.

Intraday bias remains neutral for the moment.

A daily close above 110.94 will take the parity higher towards key resistances a111.84, 112.62, 113.79, 114.88, 115.50, 117.21, 118.18, 118.66, 119.52 and 120.46 levels respectively.

On the other side, a sustained close below 110.94 will drag the parity down towards key supports around 109.27, 108.32, 106.72, 106.03 and 104.96 levels respectively.

BOJ will release latest monetary policy statement and policy rate today.

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Dollar Strengthens on Upbeat Data, Poised for Weekly Gains

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The dollar firmed in Asian trading, bound for weekly gains versus a currency basket as positive U.S. economic data bolstered hopes by investors that the central bank will remain true to its penciled in rate hike path.

The dollar index, which monitors the greenback's performance against six of its major counterparts, rose 0.1 percent to 97.474 and has risen 0.6 percent for the week.

The U.S. dollar advanced 0.2 percent to 111.11 yen, bound for 1 percent weekly gains as investors are on the sideline ahead of a Bank of Japan meeting. BOJ Governor Haruhiko Kuroda will release an update on the central bank's policy at the end of the policy meeting, during which it is widely expected that it will maintain its ultra-loose monetary policy and reiterate past assurances that it has no plans to follow the Fed's tapering plans.

The euro was stable at $1.1147, significantly shy of the seven-month high of $1.1296 hit on Wednesday. It is down 0.6 percent for the week. Meanwhile, the sterling ticked up 0.1 percent to $1.2762 after receiving a boost overnight following a divided decision from the Bank of England after its policy meeting.

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Japan Has Y203.367 Billion Trade Deficit In May

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Japan had a merchandise trade deficit of 203.367 billion yen in May, the Ministry of Finance said on Monday.

That missed forecasts for a surplus of 43.3 billion yen following the 481.7 billion yen surplus in April.

Exports were up 14.9 percent on year, shy of expectations for a gain of 16.0 percent following the 7.5 percent gain in the previous month.

Imports climbed an annual 17.8 percent versus expectations for 14.5 percent and up from 15.1 percent a month earlier.

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U.K. and EU Begin Brexit Talks

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British Brexit Secretary Davis Davis launches official talks in Brussels on Monday, that will forge the terms on with the UK will divorce from the European Union and set its ties with the zone for the coming years.

Almost a year since Britons shocked the world by voting on June 23 to sever ties with their main trading partner and almost three months since PM Theresa May triggered a two-year countdown to Brexit in March 2019, there is almost no clarity to what the future holds for both parties.

Even the British premier's political survivability is in question. Theresa May's conservatives lost their majority in a general election 10 days ago.

Davis is slated to meet chief EU arbitrator Michel Barnier at the European Commission's headquarters. They are scheduled to give a joint press conference following dialogue among their teams that will last seven hours.

Both parties attempted to downplay expectations for the possible results after a day of discussions. EU diplomats hope that the first meeting can enhance the talks' atmosphere following heated exchanges.

Davis conceding to Monday's agenda led some EU officials to perceive that May's government may be beginning to come around how the Brexit talks should proceed on Brussel's terms.

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RBA Minutes On Tap For Tuesday

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The Reserve Bank of Australia will on Tuesday release the minutes from its June 6 meeting, highlighting a modest day for Asia-Pacific economic activity.

At the meeting, the RBA decided to retain its interest rate at a record low 1.50 percent for the ninth consecutive meeting.

Australia also will see Q1 figures for house prices, with forecasts suggesting an increase of 2.2 percent on quarter and 8.9 percent on year. That follows the 4.1 percent quarterly increase and the 7.7 percent yearly gain in the previous three months.

New Zealand will provide June data for the consumer confidence index from ANZ; in May, the index climbed 1.8 percent to a score of 123.9.

Japan will release May figures for nationwide and Tokyo area department store sales; in April, sales were up 0.7 percent on year and down 0.8 percent on year, respectively.

Hong Kong will provide May numbers for consumer prices and unemployment. In April, the inflation rate was 2.0 percent, while the jobless rate came in at 3.2 percent.

News are provided byInstaForex.
 
Dow, S&P 500 Log Record Close as Tech Stocks Regain

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US equities rallied on Monday as technology stocks recuperated following their not-so-impressive performance in the last session.

The S&P 500 and Dow Jones glided higher as the technology sector climbed 1.7%, pushing equity indices higher. Previously, the sector lost 3.4% in the last few weeks.

Major tech shares including Facebook, Apple, and Alphabet all inched higher. Also, Amazon logged an all-time high as the trading session started.

The Dow stood at 21,528.99, up 0.83%, with Apple leading the advances. The Nasdaq ended at 6,239.01, up 1.42%. The S&P 500 closed at 2,453.46, with the IT leading eight sectors to their surge.

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Sek Likely to Strengthen Gradually in Months Ahead, Eur/sek to Trade Around 9.2 by End-2017

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The Swedish krona has consolidated in a comparatively narrow range between 9.70 and 9.80 against the euro in the past month. Riksbank’s surprise decision in April to extend its quantitative easing program to the end of this year, albeit halving the monthly rate of asset purchases in the second half of the year, came against the backdrop of volatile inflation readings and uncertainty in Europe, noted Lloyds Bank in a research report.

However, additional easing of monetary policy over and above this is unlikely. To a greater extent, Emmanuel Macron’s performance in the French presidential and legislative elections has lowered the political uncertainty in Europe. Moreover, keeping inflation aside, the Swedish economy continues to perform well.

Household consumption continues to be strong, while manufacturing and services PMI are solid. Furthermore, the SEK is believed to be considerably undervalued on a fundamental basis. Therefore, a gradual strengthening is likely in the months ahead, with EUR/SEK falling to 9.2 by the end of 2017, added Lloyds Bank.

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U.S. Treasury Yields Slide as Traders Wager on Gradual Rate Hikes

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U.S. government bond yields traded down as two Fed Reserve officials underlined that central bank's gradual strategy to hiking interest rates, while, taking note of the concerns regarding weak inflation and subdued growth in the economy.

Chicago Fed President Charles Evans said the U.S. central bank can postpone another hike until December and hold off in September another increase in interest rates. Meanwhile. Boston Fed President Eric Rosengren said the lower rates may be a norm in the market for a longer period of time.

Yield on the 10-year Treasury note declined 3.5 bps to 2.153 percent. The two-year note yield trimmed 1.6 bps at 1.348 percent. Yield on the 30-year bond lost 5.2 bps to trade at 2.735 percent, bringing the bond's yield to its lowest level since November 8.

The statements caused bond investors to become doubtful on how fast the Fed will hike rates in the future as it also looks to unwind its $4.5 trillion balance sheet this year.

News are provided byInstaForex.
 
New Zealand Credit Card Spending Data Due On Thursday

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New Zealand will on Thursday release May figures for credit card spending, highlighting a modest day for Asia-Pacific economic activity. Spending was up 0.9 percent on month and 6.4 percent on year in April.

Taiwan will see May figures for unemployment, with the jobless rate expected to rise to 3.80 percent from 3.78 percent in April.

Hong Kong will provide Q1 data for current account; in the three months prior, the current account surplus was 34.83 billion HKD, while the capital account had a deficit of 185 million HKD and the financial account showed a shortfall of 65.92 billion HKD.

The central bank in the Philippines will wrap up its monetary policy meeting and announce its decision on interest rates.

The bank is widely expected to keep its benchmark lending rate unchanged at 3.00 percent.

News are provided byInstaForex.
 
Gold Climbs as Treasury Yields Hit Near 10-Year Low

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Gold prices rose Thursday as the US dollar's easing made the Treasury yields hit its lowest in almost a decade.

The curve of the Treasury yield straightened to almost 10-year troughs as investors assessed how the Federal Reserve's hawkish tool shaped the economy but inflation measures are slumping. The greenback tumbled from a one-month peak versus a bunch of currencies.

US gold futures for August settlement traded at $1,253.10 an ounce, up 0.6%. Spot gold stood at $1,251.91 an ounce, up 0.5%. Earlier, it gained 0.3%, its biggest intraday percentage change since June 6.

Meanwhile, the holdings of SPDR Gold Trust climbed 0.4% to 853.98 tonnes, previously 853.68 tonnes.

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