Key overnight events:

  • WTI futures expiring in July rallied 1.9% to settle at its highest since 11th Nov last year after a government report showed that US crude inventories and production declined. Crude stockpiles fell 4.23 million barrels, more than twice as much as expected, an Energy Information Agency report showed. Crude futures extended gains this morning by a further 0.7% to $49.88/bb.
  • The S&P 500 Index rose for a second day, climbing 0.7% to its highest level in almost a month as markets warmed to the idea that the economy can withstand a hike. Bank and energy shares were amongst the strongest gainers. The US dollar pared gains overnight, with the Bloomberg Dollar Spot Index dropping a further 0.2% earlier today.
  • Preliminary May figures for the US Markit Services PMI dropped to 51.2 from 52.8, missing the estimated reading of 53.0.
  • Fitch raised its China GDP forecast in 2016 to 6.3% from 6.2%, citing earlier stimulus. The ratings agency downgraded its outlook on US, partly on weaker capex in the energy sector.



  • Spot 1.3772
  • USDSGD fell for a second day, by as much as 0.3% to 1.3750; the currency pair has risen 2.9% since the beginning of the month.
  • Industrial production for April is due for release later today and is expected to have fallen 0.2% from a month ago.



  • Spot 0.7206
  • Private capex in the first quarter this year fell 5.2% from the previous quarter, worse than the expected fall of 3.5%.
  • AUDUSD slid 0.6% following the release of the data, but erased losses soon after. The currency pair remains on course to test the next key resistance level at 0.7000.



  • Spot 1.2979
  • As expected, the Bank of Canada kept its key interest rate unchanged at 0.50%. The BOC said the economy should rebound in the third quarter, citing solid growth in the US and stronger oil prices. The central bank added that the Alberta wildfires are expected to knock 1.25 percentage points off real GDP in the second quarter, which translates to a hit of about 0.25% to forecasted GDP.
  • USDCAD slid following the central bank’s rate decision, falling by as much as 1.0% to 1.2977. The Canadian dollar strengthened due to a more hawkish adopted by the BOC.
  • The next resistance lies at the 50-day moving average of 1.2924.



  • Spot 6.5599
  • Onshore and offshore yuan gained after the PBOC raised its daily reference by 0.2% following yesterday’s decision to set it at the weakest level since 2011. USDCNH fell 0.1% to a session low of 6.5572.
  • Managing Director of Jefferies, Brad Bechtel, commented that market consensus has shifted as evident in the lack of impact yesterday following the weakest CNY fixing since 2011. As such, he doesn’t think the yuan is set for a much bigger devaluation.



  • Spot 8.3072
  • USDNOK declined 0.4% to a session low of 8.3020, close to its lowest level in a week, as oil prices continue to edge higher towards $50/bbl.


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UEN: 201419754M

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