Key overnight events:
- US CPI in May rose 0.2% from a month earlier and 1.0% year-on-year, less than the predicted rises of 0.3% and 1.1% respectively. Stripped of food and energy, CPI were higher by 0.2% month-on-month and 2.2% year-on-year, matching estimates.
- Brexit campaigns have been suspended after a UK lawmaker who backed Remain was murdered; the killer’s motives remains unclear. As tracked by Oddschecker, odds for Brexit slid below 38% just hours after surpassing above 44% earlier. Traders noted that the US equity rebound during yesterday’s session coincided with the deterioration in chances of Brexit.
- The pound erased its previous day’s declines against the US dollar, gaining as much as 1.2% to 1.4294 and rebounding from a 1.4013-low, its weakest level since April. The US dollar weakened slightly as the Bloomberg Spot Dollar Index slipped 0.2%. The S&P 500 Index ended 0.3% higher, halting its steepest run of daily losses since Feb 11th.
- WTI futures expiring in July sank 3.8% to $46.21/bbl. Output in Canada is expected to ramp up this month after wildfires cut production. US crude inventories dropped for a fourth week to 531 million barrels, but remain 33% above the five-year seasonal average, according to the US Energy Information Administration.
- The yen slipped 0.5% to 104.73 per dollar, weakening from its strongest level since 2014 and trimming its jump in the week to 2.1%. Japan Finance Minister Aso said earlier today he was very concerned about one-sided, abrupt and speculative currency movements. The yen had surged as much as 2.3% yesterday after the BOJ stood pat on stimulus.
- Central banks in Japan, the US and Europe are discussing an emergency addition of dollars to financial markets to ensure liquidity should the pound plunge if Brexit materialises, the Nikkei reported.
- Indonesia’s central bank reduced its benchmark rate by 25 basis points to 6.50%, surprising the majority of economists surveyed by Bloomberg.
- Spot 1.3491
- Non-oil domestic exports in May surged 11.6% year-on-year, exceeding the median estimates of a 1.6% drop. Export growth was led by prefabricated buildings, non-monetary gold and pharmaceuticals, the International Enterprise of Singapore said.
- USDSGD slid as much as 0.4% to a session-low of 1.3461.
- Spot 0.7394
- AUDUSD recovered from a 1.0% slide last night to gain as much as 0.6% to 0.7404 earlier today.
- For most of June so far, The currency pair has been bounded in between its 50-day moving average of 0.7442 and 200-day moving average of 0.7273.
- Spot 1.2924
- USDCAD reversed a 0.6% gain to a 0.8% drop in Asia morning trade as the currency pair reverted back to the 1.2900 handle.
- The loonie looks set to snap a week-losing winning streak against the dollar and trim its decline this week to about 1%.
- Spot 6.5951
- The PBOC weakened its fixing rate by 0.09% to 6.5795 versus the dollar, as the yuan rose along with most other Asian currencies, tracking a weaker dollar.
- USDCNH fell 0.2% to an intraday low of 6.5892 earlier today, failing to hold above the 6.6000 handle for the third time in a week.
- Spot 8.3474
- USDNOK rose as much 1.3% last night, briefly breaching its 200-day moving average of 8.4700, before reversing and extending losses to 0.4% to 8.3377 earlier today as crude oil prices recovered and Brexit fears abated.