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June 27, 2017

Time (GMT) Currency Event Previous Forecast
08:00 EUR ECB President Draghi Speaks
09:30 GBP BOE Financial Stability Report
10:00 GBP BOE Gov Carney Speaks
14:00 USD CB Consumer Confidence 117.9 116.2
17:00 USD Fed Chair Yellen Speaks

 

Global Commentary

With no weekend catalysts or major news events on Monday, Asian markets headed broadly higher thanks to firming commodity prices and a continue rally in technology.  Mainland China’s Shanghai Composite led the gains, rising 0.89%, with the Hang Seng in Hong Kong following close behind with a 0.79% gain.  In Japan, the Nikkei advanced by 0.10%, giving back larger early gains as the Yen stabilized versus the U.S. dollar.  Australia’s S&P/ASX 200 edged up by 0.08% thanks to gains from utilities and mining companies.  In South Korea the Kospi hit a new record high as it added 0.42% for the session, while the Straits Times Index in Singapore was unchanged as markets there remained closed for the final day of Ramadan.  Markets in Europe ended broadly higher, helped by rising crude prices, strong German business sentiment, and a rally in Italian banking shares after that country’s government stepped in and shut down two failed lenders.  The pan-European Stoxx Europe 600 added 0.37% on the day, with Germany’s DAX advancing 0.29%, and the French CAC 40 tacking on 0.56%.  In London, gains from energy and mining shares helped the FTSE snap a four session losing streak and gain 0.31%.  Markets in the U.S. struggled all day and dropped late in the session to finish mixed as shares of technology firms sagged.  At the close the S&P 500 edged up by 0.03%, the Dow had a slight gain of 0.07%, but the Nasdaq was lower by 0.29%.

 

FOREX

EUR – The Euro was mixed on Monday as it firmed solidly against the Yen, but slipped versus the U.S. dollar, while ending the session unchanged against the Pound.

GBP – The Pound gapped higher at the open against rival currencies as traders once again believe the Brexit will turn out positively for the U.K.  The British currency remained substantially firmer versus the Yen, but slipped and gave back some gains versus the U.S. dollar, while ending the session unchanged against the shared Euro currency.

USD – The U.S. dollar began the session with weakness, and a poor durable goods number from the U.S. did nothing to help early in the North American session.  However, as risk appetite turned higher later in the day so did the USD, and it finished the day firmer versus the Euro and Yen, but slightly softer against the Pound.

JPY – The Yen was broadly and significantly softer versus rival currencies on Monday as risk appetite climbed, causing traders to move out of haven assets and currencies such as the Yen.

TRY – The Lira ended the session broadly firmer on Monday after a period of volatility mid-day when the Turkish central bank kept interest rates on hold and reaffirmed their position to hold monetary policy tightly until inflation rates in Turkey moderated.

RUB – The continued rally in crude helped the Ruble continue its own recovery, with the Russian currency ending the session broadly firmer against major currencies.

 

Commodities

Metals – Precious metals fell for the first time in four sessions Monday as risk appetite came online in markets, and a huge sale of 1.8 million ounces rocked gold markets.  August gold fell $10.00, or 0.8%, to settle at $1,246.40 an ounce, while September silver shed $0.076, or 0.5%, to $16.631 an ounce.

Oil – Crude gained for the third session in a row, continuing its bounce off the ten month low hit last week, and with traders betting on a large drop in this week’s U.S. supply data.  August West Texas Intermediate crude rose by $0.37, or 0.9%, to settle at $43.38 a barrel.

 

Indices

S&P500 – The S&P made strong gains at the open, but then slipped off its highs as crude prices began to show volatility, and technology shares sold off.  The index remained flat just above the unchanged line for the afternoon, finishing with a slight gain of just 0.03% as the markets struggled to defend gains.

DAX – The DAX made strong gains in the morning in response to German business sentiment coming in at a record high level.  Unfortunately, weakness from Wall Street weighed on the market in the late afternoon and it gave back a good portion of the early gains to end with a modest rise of 0.29%.

Nikkei – The Nikkei soared higher in early trade, but quickly pulled back off its early highs as investors saw the Yen begin to pull higher versus the U.S. dollar.  The index managed to hold onto a small gain and continued to trade just above the unchanged line throughout the afternoon, closing the session higher by 0.10%.


Stocks

Alphabet – Since nearly reaching the $1,000 level in early June shares of Alphabet (formerly Google), have struggled and continue to do so as the stock fell 1.38% on Monday.  While technology in general has seen a solid rally recently, shares of Alphabet remained mired around the $950 level, giving us the feeling that the $1,000 level may be too much for the stock to crack just now.  In fact, with summer trading being notoriously slow, we may have to wait until September to see the stock even take a run at the level.  With shares remaining in a tight trading range and showing little in the way of bias one way or another it may be a good time to take a pass on this stock and wait for some momentum to heat up one way or another.

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