Focus Shifts to the North Korea – U.S Summit – The Dollar is in for a Ride
Earlier in the Day:
Key stats scheduled for release through the Asian session this morning were limited to machinery orders out of Japan.
Following the contraction in the Japanese economy through the 1st quarter, there was some good news, after disappointing household spending figures released last week, with core machinery orders surging by 10.1% in April, month-on-month, coming in well ahead of a forecasted 2.8% and March’s 3.9% decline.
Year-on-year, orders were up 9.6%, which was also well ahead of a forecasted 3.9% rise and March’s 2.4% decline.
The numbers suggest that the economy may avoid another quarter of contraction, with orders from the manufacturing sector jumping by 22.7%, attributed to the auto sector, though household spending remains the missing piece of the puzzle.
The Japanese Yen moved from ¥109.404 to ¥109.459 upon release of the figures, before easing to ¥109.78 against the Dollar, down 0.21% for the session.
Elsewhere, the Aussie Dollar was up 0.05% to $0.7605, the Australian markets closed for the Queen’s birthday, with the Kiwi Dollar up 0.07% to $0.7039, the markets seeing some risk return to the table following the G7 Summit.
In the equity markets, the Nikkei was up 0.64% at the time of writing, while the Hang Seng and CSI300 were up 0.31% and by 0.17% respectively, the pair partially recovering heavy losses from Friday.
It’s a busy week ahead and, with the North Korea – U.S Summit tomorrow, it’s going to be a choppy week ahead.
The Day Ahead:
For the EUR, there are no material stats scheduled for release, leaving the EUR in the hands of market risk appetite ahead of tomorrow’s North Korea – U.S Summit, sentiment towards Thursday’s ECB and trade war chatter.
At the time of writing, the EUR was up 0.23% to $1.1796.
For the Pound, it’s a busy day on the data front, with April’s industrial and manufacturing production figures, alongside trade data scheduled for release this morning, ahead of NIESR GDP estimates in the early afternoon.
Following some solid private sector PMI numbers, positive numbers today would continue to support the market’s shift in sentiment towards BoE policy and raise the stakes for a rate hike in the months ahead.
At the time of writing, the Pound was up 0.02% to $1.3408, with direction through the day hinged on today’s manufacturing production figures, which are forecasted to be Pound positive and any Brexit chatter.
Across the Pond, there are no material stats scheduled for release out of the U.S through the day, leaving the Dollar firmly in the hands of the U.S President going into the North Korea – U.S Summit tomorrow. There will be some apprehension ahead of the meeting, with Trump needing to get more out of the Summit than just a photo opp.
At the time of writing, the Dollar Spot Index was down 0.07% to 93.474, with the markets taking a cautious stance ahead of the Summit, while digesting news from the G7 Summit that left sentiment mixed following some contrasting tweets from the U.S President.