Monday 1st June: Asian markets mostly higher as China data shows pickup

Global Markets:

• Asian Stock Markets : Nikkei up 0.81%, Shanghai Composite up 2.21%, Hang Seng up 3.40%, ASX up 1.10%
• Commodities : Gold at $1752.05 (+0.02%), Silver at $18.82 (+1.74%), Brent Oil at $37.82 (-0.05%), WTI Oil at $35.42 (-0.20%)
• Rates : US 10-year yield at 0.674, UK 10-year yield at 0.201, Germany 10-year yield at -0.419

News & Data:

• (CAD) GDP m/m -7.20% vs -9.00% expected
• (CAD) RMPI m/m -13.40% vs -23.90% expected
• (USD) Core PCE Price Index m/m -0.40% vs -0.30% expected
• (USD) Personal Spending m/m -13.60% vs -12.60% expected
• (USD) Chicago PMI 32.3 vs 40.1 expected
• (USD) Revised UoM Consumer Sentiment 72.3 vs 73.7 expected
• Relief rally continues after a muted Trump response and encouraging China PMIs
• Spain’s manufacturing sector remains in deep downturn during May

CFTC Positioning Data:

• EUR long 75K vs 72K long last week. Longs increased by 3K
• GBP short 22K vs 19K short last week. Shorts increased by 3K
• JPY long 35K vs 28K long last week. Longs increased by 7K
• CHF long 9K vs 9K long last week. Unchanged
• AUD short 40k vs 39K short last week. Shorts increased by 1K
• NZD short 15K vs 16K short last week. Shorts trimmed by 1K
• CAD short 34k vs 35K short last week. Shorts trimmed by 1K.

Markets Update:

Asian stock markets, led by Hong Kong, are notably higher on Monday following the mostly positive cues from Wall Street Friday on relief that U.S. President Donald Trump did not announce new tariffs or a withdrawal from the phase one trade agreement with China. In addition, official data released over the weekend showed that China’s factory activity expanded in May.

After a cautious start Asian markets were led higher by China on signs parts of the domestic economy were picking up. The Nikkei 225 closed 0.8% as shares of index heavyweight and conglomerate Softbank Group jumped 4%.

South Korea’s Kospi rose 1.8% even as Reuters reported Monday that the country’s exports in May fell 23.7% year-on-year. Mainland Chinese stocks also saw robust gains on the day, with the Shanghai composite up 2.2% while the Shenzhen component surged 3.3%.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.995 after declining from levels above 99.6 last week. Oil prices initially eased on worries about U.S. demand, but found support from reports Russia had no objection to the next meeting of OPEC and its allies being brought forward to June 4 from the following week.

Upcoming Events:

Monday, June 01, 2020

• 02:00 PM GMT – (USD) ISM Manufacturing PMI

Tuesday, June 02, 2020

• 01:30 AM GMT – (AUD) Current Account
• 05:30 AM GMT – (AUD) Cash Rate
• 05:30 AM GMT – (AUD) RBA Rate Statement

Wednesday, June 03, 2020

• 01:30 AM GMT – (AUD) GDP q/q
• 08:30 AM GMT – (GBP) Final Services PMI
• 12:15 PM GMT – (USD) ADP Non-Farm Employment Change
• 02:00 PM GMT – (CAD) BOC Rate Statement
• 02:00 PM GMT – (CAD) Overnight Rate
• 02:00 PM GMT – (USD) ISM Non-Manufacturing PMI

Thursday, June 04, 2020

• 01:30 AM GMT – (AUD) Trade Balance
• 11:45 AM GMT – (EUR) Main Refinancing Rate
• 11:45 AM GMT – (EUR) Monetary Policy Statement
• 12:30 PM GMT – (CAD) Trade Balance
• 12:30 PM GMT – (EUR) ECB Press Conference
• 12:30 PM GMT – (USD) Unemployment Claims

Friday, June 05, 2020

• 12:30 PM GMT – (CAD) Employment Change
• 12:30 PM GMT – (CAD) Unemployment Rate
• 12:30 PM GMT – (USD) Average Hourly Earnings m/m
• 12:30 PM GMT – (USD) Non-Farm Employment Change
• 12:30 PM GMT – (USD) Unemployment Rate