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June 22, 2017

Time (GMT) Currency Event Previous Forecast
08:00 EUR ECB Economic Bulletin
12:30 CAD Core Retail Sales m/m -0.2% 0.6%
12:30 USD Unemployment Claims 237K 241K
14:00 EUR Consumer Confidence -3 -3

 

Global Commentary

Markets fell broadly across Asia on Wednesday as the global selloff in crude hurt investor confidence across the region.  Mainland China’s Shanghai Composite bucked the falling trend however and gained 0.52%, after the MSCI agreed to list domestic Chinese equities as part of its index.  Investors in Hong Kong were unimpressed with the decision though, and the hang Seng ended the day 0.57% lower.  In Japan, the Nikkei slipped off its 22 month high as it lost 0.45%, but the Japanese benchmark index did remain above the 20,000 level.  Australia’s S&P/ASX 200 underperformed the region as it fell 1.59% on broad based weakness across all the major sectors.  In Singapore the Straits Times Index ended the day 0.89% lower, while in South Korea the Kospi retreated 0.49%.  Markets across Europe continued lower in the wake of more losses for crude and as the departure of a key ally of President Emmanuel Macron hit French equities.  The broad based Stoxx Europe 600 ended the day 0.18% lower, with the DAX in Germany falling 0.32%, and the CAC 40 in France off by 0.37%.  London’s FTSE also posted a loss of 0.33% as falling crude and a resurgent Pound weighed on equities.  In the U.S., most sectors posted losses on Wednesday, although there was strength from the technology and health care sectors that helped fuel gains for the Nasdaq.  At the close, the S&P 500 was lower by 0.06%, the Dow fell 0.26%, but the Nasdaq posted a 0.74% gain.

 

FOREX

EUR – The Euro firmed again the USD and Yen on Wednesday, while ending unchanged against the Pound after ranging back and forth during the session.

GBP – Hopes for future interest rate hikes in the U.K. sent the Pound higher against the USD and Yen on Wednesday, with the Pound finishing unchanged versus the Euro following a choppy trading session.

USD – The USD managed to firm somewhat against the Yen on Wednesday as it recovered from early weakness, but versus the Pound and Euro the U.S. dollar slid lower on the session.

JPY – The Yen was broadly softer on Wednesday, even though risk appetite remained muted in markets due to the sharp fall in crude prices.

TRY – The Lira firmed against the Yen and USD on Wednesday, while ending the session unchanged versus the Euro and Pound after giving back early gains against both currencies.

RUB – Falling crude prices kept pressure on the Russian currency Wednesday, with the Ruble ending the session broadly softer versus major currencies.

 

Commodities

Metals – Precious metals ended mixed on Wednesday as weakness for the U.S. dollar helped gold halt its two session slide.  August gold added $2.30, or 0.2%, to settle at $1,245.80 an ounce.  Meanwhile, July silver fell $0.043, or 0.3%, to finish at $16.374 an ounce

Oil – Crude dropped further to post a more than ten month low on Wednesday as traders continue to be wary of escalating production levels for crude, especially in the U.S.  August West Texas Intermediate crude lost $0.98, or 2.3%, to settle $42.53 a barrel.

 

Indices

S&P500 – The S&P started the day with gains, but as it became apparent that crude was going to continue sliding lower the market took a turn lower.  By mid-morning the S&P had moved into negative territory, and it continued lower in choppy trade.  Late afternoon saw a recovery off session lows, with the S&P ending the day with a slight loss of 0.06% for the session.

DAX – The DAX fell from the open and was down as much as 0.8% in early trade before recovering and moving steadily higher throughout the rest of the session.  The recovery wasn’t strong enough to lift the DAX into positive territory however, and the German benchmark index finished the day with a 0.32% loss.

Nikkei – The Nikkei opened in the red and after trying to regain unchanged levels in the morning finally capitulated and headed steadily lower in afternoon trade.  The loss took the index off its 22 month high, but it did remain above the 20,000 level.  By the close the Nikkei was 0.45% lower as the combination of falling crude prices and a stronger Yen were too much for Japanese equities to overcome.


Stocks

Goldman Sachs Group Inc – After getting a solid boost following the U.S. presidential elections shares of Goldman Sachs leveled off at the $250 a share level in late February and early March.  Since then the stock has turned lower as questions have emerged regarding the Trump administrations ability to move forward successfully with their agenda for economic and fiscal policy.  The stock has found support at the $215 a share level, bouncing three times already as it tested that support level.  Wednesday saw the stock closing at $222.49 a share with a 1.13% loss on the day as markets were broadly weaker.  There also looks to be some resistance just above this level at $226 a share, so we could see the stock continue trading in this fairly tight range of $215 to $226 a share for some time, as the summer months tend to be ranging in U.S. equity markets.

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