Asia wrap: Little fanfare

Stephen Innes SPI Asset Management

The main news and perhaps the most unsurprising result came from the House of Representatives, which voted 314-117 to send the debt ceiling bill to a rubber-stamped Senate approval to little market fanfare as judged muted reaction across US futures.

But investors could be treading cautiously ahead of Friday's NFP, which should take on increased importance as that will be the last significant data point that Fed officials will have a chance to comment on before their June 14th rate decision.

In China, the headline Caixin manufacturing PMI rose to 50.9 in May from 49.5 in April, suggesting improved manufacturing activity due to increased demand. But looking at the bellwether Yuan's plight, it will take more than a slightly above contraction PMI reading to mend China's leaky ship.

Oil market participants expect the nine major OPEC+ producers, which announced voluntary production cuts in April, to keep production unchanged. And while they will most certainly ramp up the " Ouching" rhetoric, one possible outcome is that OPEC could broaden the cuts to smaller producers. However, in the absence of Russian compliance, whether this will stem the pessimistic tide is debatable.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.