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General Trend:

• US official seemingly plays down expectations for Trump/Xi G20 meeting
• Financials continue to weigh on Shanghai Composite
• Asian chipmakers rise, Micron gains in afterhours trading following its earnings/outlook
• China battery manufacturer CATL plans to raise investments in European production base
• RBNZ left rates unchanged (as expected), said lower cash rate may be needed over time, did not express concerns about currency
• NZD rises and falls after RBNZ decision, little reaction seen in bond market
• Probability of 50bps July US Fed rate cut declines after Fed comments
• USD/JPY rises with US bond yields
• Thai Baht (THB) weakens, Deputy PM supports 2019 rate cut
• US gasoline futures rise over 5% on possible closure of Philadelphia Energy Solutions refinery

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.1%
• (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.50%; AS EXPECTED; MEMBERS DISCUSSED A RATE CUT AT THIS MEETING
• (NZ) IMF: New Zealand Dollar is not immediate concern, still a bit above long-term average
• BNO.AU Announced the top line results of the exploratory trial of BNC210 for the treatment of agitation in elderly patients in a hospital setting
• MOY.AU Announces first gold discovered from sulphide ore at Nullagine; Commissioning of Stage 1 sulphide plant produces first gold
• (NZ) Reserve Bank of New Zealand (RBNZ) Dep Gov Bascand RBNZ is renewing approach to financial stability

Japan

• Nikkei 225 opened -0.6%
• 723.JP CEO Bunsei Kure to step down (3 months after reappointing him), CFO Hidetoshi Shibata to be named as the new CEO, effective end of June
• 5938.JP Shareholders bring back ousted CEO Kinya Seto, re-naming him CEO; Seto comments he is targeting to return to company to profit this FY19/20, main issue is high fixed costs – AGM
• (JP) According to a joint study between Japan Center for Economic Research and Nikkei the USD/JPY at 107 is right around its equilibrium exchange rate, based on most recent economic data, 5 other regional Asian currencies are undervalued - Nikkei
• 8233.JP To exit China and close its Shanghai store by as early as 2020
• 3659.JP Founder stops process related to sale of stake - Korean press
• (JP) Japan Govt announced plans to hold Upper House election on July 21st

Korea

• Kospi opened slightly lower
• (KR) South Korea Fin Min Hong: To provide KRW70T over the next 5 years to support its services sector, will spend 70% of extra budget in Q3 if approved - Local Press

China/Hong Kong

• Hang Seng opened -0.5%; Shanghai Composite opened -0.6%
• (US) Senior Trump Administration official: no broad trade deal is expected to be made at the G20 meeting between Trump and Xi; US is not willing to come to the Trump-Xi meeting with concessions on trade; It’s possible that US and China may agree on no new tariffs as a goodwill gesture, but not clear if that will happen
• (CN) China Q2 Beige Book notes domestic economy shows modest improvement, manufacturing and retail outperformed; Risks ahead look more serious
• (CA) China Embassy in Canada confirms China has halted imports of Canadian meat after finding pork with residue of feed additive Ractopamine
• (CN) China PBoC Open Market Operation (OMO): Skips for the 3rd consecutive session
• (CN) China PBOC sets yuan reference rate: 6.8701 v 6.8580 prior
• (CN) CNOOC Energy Tech IPO opens for trade at CNY2.45 v CNY2.04/shr pricing, rises 44% to daily limit
• (CN) China PBOC sells CNY30B in 1-month and 6-month bills in Hong Kong

Other

• (JP) G20 draft communique: Calls for promotion of free trade as a means for strong global economic growth; calls for need to create positive economic cycle of growth and distribution (will not explicitly oppose protectionism due to opposition from US) - Japan press

North America

• (US) Philadelphia Energy Solutions expected to close oil refinery after recent fire (largest refinery on east coast) - press
• (US) Weekly API Oil Inventories: Crude: -7.6M v -0.8M prior
• (US) Fed Chair Powell: Monetary policy shouldn't overreact to short-term swings in sentiment; doing so would risk adding even more uncertainty to the outlook
• (US) Fed's Bullard (dove, voter, dissenter): a 50bps cut in July would be overdone; 50bps cut is not called for right now
• (US) Fed's Bullard (dove, voter, dissenter): Think 2 rate cuts before the end of the year would ensure a soft landing, move policy from slightly restrictive to slightly accomodative; if Fed does cut rates in July do not feel a need to also end reduction in the balance sheet since that is already going to end in Sept; Was approached by Trump administration about a possible seat on Fed board, but said was happy in current job
• (US) Fed's Barkin (hawk, non-voter): Fed policy stance is modestly accommodative; doesn't know whether rates should be cut this year
• MU Guides Q4 $0.45 +/-$0.07 v $0.72e, Adj Rev $4.5B +/-$0.2B v $4.70Be - earnings call
• (US) Special Counsel Mueller to testify before House Committee on Intelligence and Judiciary July 17th
• TSLA CEO Musk reiterates on track to set all-time delivery record, has enough vehicle orders to set the record - US financial press

Europe

• (UK) New UK PM to be announced on Jul 23 – press
• (EU) Reportedly Germany Chancellor Merkel says she hopes EU Parliament selects candidates by midweek; calls for an EU Commission solution by June 30th - closed-door comments to lawmakers

Levels as of 1:20 ET

• Nikkei 225, -0.6%, ASX 200 -0.1%, Hang Seng +0.1%; Shanghai Composite -0.2%; Kospi -0.1%
• Equity Futures: S&P500 flat; Nasdaq100 flat, Dax flat; FTSE100 -0.3%
• EUR 1.1373-1.1353 ; JPY 107.50-107.09 ; AUD 0.6971-0.6950 ;NZD 0.6663-0.6594
• Gold -0.6% at $1,410/oz; Crude Oil +1.8% at $58.88/brl; Copper -0.1% at $2.728/lb

For the 24 hours to 23:00 GMT, the EUR declined 0.27% against the USD and closed at 1.1369.

In the US, data showed that the housing price index rose 0.4% on a monthly basis in April, surpassing than market consensus for a gain of 0.2%. In the previous month, the index had recorded an advance of 0.1%.

On the other hand, the US Richmond Fed manufacturing index declined to a level of 3.0 in June, compared to a reading of 5.0 in the prior month. Market participants had envisaged the index to record a drop to a level of 2.0. Moreover, the nation’s CB consumer confidence index fell to a 2-year low level of 121.5 in June, amid ongoing trade tensions and more than market expectations for a decrease to a level of 131.0. In the previous month, the index had recorded a revised reading of 131.3. Also, new home sales unexpectedly plummeted to its lowest level in 5-months by 7.8% on a monthly basis to a level of 626.0K in May, compared to a revised level of 679.0K in the prior month. Markets had anticipated new home sales to register a rise to a level of 684.0K.

The US dollar rose against its major peers, after Federal Reserve (Fed) Chairman, Jerome Powell, dampened hopes for a potential rate cut.

In a speech, US Fed Jerome Powell stated that the central bank will reassess whether current economic uncertainties call for lower rates and will take a wait-and-see approach to determine its next move on interest rates. Powell reiterated that the central bank will “act as appropriate” to sustain the US economic expansion. He added that baseline outlook for the economy remains favourable, despite rising crosscurrents in the global economy. However, he warned that the economy is facing growing uncertainties about trade and worries about the global economy.

In the Asian session, at GMT0300, the pair is trading at 1.1354, with the EUR trading 0.13% lower against the USD from yesterday’s close.

The pair is expected to find support at 1.1328, and a fall through could take it to the next support level of 1.1302. The pair is expected to find its first resistance at 1.1396, and a rise through could take it to the next resistance level of 1.1438.

Looking ahead, traders would keep an eye on Germany’s GfK consumer confidence index for July, slated to release in a few hours. Later in the day, the US durable goods orders and advance goods trade balance, both for May along with the MBA mortgage applications, will be on investors’ radar.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP declined 0.38% against the USD and closed at 1.2690, amid rising fears over no-deal Brexit, following former British Foreign Secretary, Boris Johnson’s comments that he would push for an on-time Brexit on 31 October 2019 either with or without a deal.

In the Asian session, at GMT0300, the pair is trading at 1.2684, with the GBP trading 0.05% lower against the USD from yesterday’s close.

The pair is expected to find support at 1.2643, and a fall through could take it to the next support level of 1.2601. The pair is expected to find its first resistance at 1.2755, and a rise through could take it to the next resistance level of 1.2825.

Trading trend in the Sterling today, is expected to be determined by UK’s BBA mortgage approvals for May, set to release in a few hours.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.13% against the JPY and closed at 107.17.

In the Asian session, at GMT0300, the pair is trading at 107.45, with the USD trading 0.26% higher against the JPY from yesterday’s close.

The pair is expected to find support at 106.99, and a fall through could take it to the next support level of 106.52. The pair is expected to find its first resistance at 107.71, and a rise through could take it to the next resistance level of 107.96.

Moving ahead, traders would await Japan’s retail trade and large retailers’ sales, both for May, slated to release overnight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.31% against the CHF and closed at 0.9749.

In the Asian session, at GMT0300, the pair is trading at 0.9768, with the USD trading 0.19% higher against the CHF from yesterday’s close.

The pair is expected to find support at 0.9716, and a fall through could take it to the next support level of 0.9663. The pair is expected to find its first resistance at 0.9799, and a rise through could take it to the next resistance level of 0.9829.

With no macroeconomic releases in Switzerland today, investors would look forward to global macroeconomic releases for further direction.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.05% against the CAD and closed at 1.3176.

In the Asian session, at GMT0300, the pair is trading at 1.3185, with the USD trading 0.07% higher against the CAD from yesterday’s close.

The pair is expected to find support at 1.3156, and a fall through could take it to the next support level of 1.3126. The pair is expected to find its first resistance at 1.3212, and a rise through could take it to the next resistance level of 1.3238.

Amid lack of economic releases in Canada today, traders would focus on global macroeconomic events for further direction.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the AUD declined 0.07% against the USD and closed at 0.6961.

LME Copper prices rose 0.8% or $44.5/MT to $5985.5/MT. Aluminium prices rose 1.7% or $29.0/MT to $1776.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.6961, with the AUD trading flat against the USD from yesterday’s close.

The pair is expected to find support at 0.6943, and a fall through could take it to the next support level of 0.6924. The pair is expected to find its first resistance at 0.6979, and a rise through could take it to the next resistance level of 0.6996.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

Germany Gfk consumer sentiment for July dropped to 9.8, down from 10.1 and missed expectation of 10.0. On the positive side, Economic Expectation rose from 1.7 to 2.4. Gfk noted that "the downward spiral that economic expectation began at the start of 2018 halted in June, at least for the moment." Still, "the global economic cooling off, on-going discussions around Brexit, and the trade war with the USA are putting a strain on the economic indicator".

On the other hand, Income Expectations, which dropped from 57.7 to 45.5, was a major drag. Gfk noted: "the voices heralding the end of the employment boom are growing. As a result, fears concerning job losses have increased at a number of employers".

Full release here.

For the 24 hours to 23:00 GMT, Gold declined 0.29% against the USD and closed at USD1422.90 per ounce, after Federal Reserve Chairman, Jerome Powell’s, remarks reduced rate cut expectations.

In the Asian session, at GMT0300, the pair is trading at 1411.10, with gold trading 0.83% lower against the USD from yesterday’s close.

The pair is expected to find support at 1400.23, and a fall through could take it to the next support level of 1389.37. The pair is expected to find its first resistance at 1432.43, and a rise through could take it to the next resistance level of 1453.77.

The yellow metal is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Silver declined 0.84% against the USD and closed at USD15.41 per ounce, weighed down by losses in gold prices.

In the Asian session, at GMT0300, the pair is trading at 15.32, with silver trading 0.58% lower against the USD from yesterday’s close.

The pair is expected to find support at 15.23, and a fall through could take it to the next support level of 15.13. The pair is expected to find its first resistance at 15.50, and a rise through could take it to the next resistance level of 15.68.

The white metal is trading below its 20 Hr and 50 Hr moving averages.