Asian indices:
- Australia’s ASX 200 Index is up 3.3 points (0.05%) and is currently trading at 7,260.00.
- Japan’s Nikkei 225 index climbs 228.24 points (0.78%) and is currently trading at 29,616.54
- Hong Kong’s Hang Seng Index rose 27.44 points (0.14%) and is now trading at 19,654.68.
- China’s A50 index fell -44.1 points (-0.34%) and is now trading at 12,968.69.
UK and Europe:
- UK FTSE 100 futures are now up 8 points (0.1%), with the spot market now estimated to open at 7,762.62
- Euro STOXX 50 futures are currently up 5 points (0.12%) and the spot market is now estimated to open at 4,322.88.
- German DAX futures are currently up 10 points (0.06%) and the spot market is now estimated to open at 15,923.82.
US Futures:
- DJI futures are currently down -2 points (-0.01%).
- S&P 500 futures are currently up 0.75 points (0.02%).
- Nasdaq 100 futures are currently down -0.75 points (-0.01%).
- Producer prices in Japan continued to slow as raw material prices continued to ease, dropping to 5.8% year-on-year, the lowest level in 23 months. However, it fell short of expectations of 5.4%.
- German wholesale prices will be released at 6am and could weigh further if the EUR/USD weakens (falling from 23.8% y/y to 2% in 11 months).
- Swiss Producer Prices will then be released at 06:30, followed by Eurozone industrial production data at 09:00.
- Fed members will be speaking every day this week, with Bostic, Kashkari, Birkin and Cook on the list today.
- BOE Chief Economist Hue Pil will also speak at 16:00 BST
- Currency volatility was very low overnight, especially as it took a breather from the end of a volatile week.
- US dollar index climbs to 5-week high in bullish consolidation week, while Canadian dollar, euro, pound, Swiss franc form bearish consolidation week
- Copper prices fell -4% last week after a series of weak data from China, hampering the economy’s progress towards ~5% of GDP in 2023.
- The Turkish lira hit a new all-time high against the US dollar as President Erdogan still holds the lead, although he has yet to secure a complete majority.
President Erdogan does not have a perfect majority:
With 91.9% of the votes counted, Erdogan has a slight lead over his rival, Kirikda Rogul, but falls short of a perfect majority. And that means Turkey could be headed for a runoff, with some suspecting Mr Erdogan has a slight edge. Over the past two decades, there has been great hope that the president could be ousted, shaping a market landscape that could lead to a possible reversal of unorthodox monetary policy and a stronger lira. Either way, it could be weeks before the election is complete.
US debt ceiling talks to resume on Tuesday:
Biden and McCarthy agreed to resume talks on the debt ceiling on Tuesday, leaving some hopes the ceiling will be raised. One could argue that the fact that Wall Street is hovering near its highs suggests an assumption that the problem will be resolved, which could trigger a risk-on-rally. But other markets are less confident, with gold still holding above $2,000 and the US dollar receiving bids from safe-haven flows, yields still subdued.
EUR/USD hourly chart:
EUR/USD trades within the established downtrend and bearish channel on the hourly chart. Friday saw a solid break below 1.0900 with heavy volume, with a good chunk of trading activity occurring around 1.0884, suggesting initiative selling.
The price is trending higher during the Asian trade and if the price continues to rise, we would be interested in a bearish setup around resistance levels such as the daily pivot point. Upper trendline or his 1.0884 VPOC.
Upcoming Economic Event (GMT +1 hour)
— By Matt Simpson
Follow Matt on Twitter @cLeverEdge
