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Wall Street drifts lower
US indices fell for a second day yesterday, pressured by the lack of news on the trade deal front and a weak banking sector as expectations for a Fed interest rate cut rose. Hong Kong is anticipating more protests as the extradition bill is due to be debated in the Legislature.
US30USD Daily Chart
The US30 index slid for a second day yesterday amid muted volumes as below forecast CPI raised expectations for an earlier Fed rate cut, which weighed on banking counters
The index held above the 55-day moving average at 25,977
US consumer prices rose 1.8% y/y in May, below forecasts of a 1.9% gain and the weakest reading in three months. The probability of a cut at the June meeting rose to 21% while that for July is at 83.5%, according to pricing in the interest rate markets. There are no major data releases scheduled for today.
DE30EUR Daily Chart
The Germany30 index snapped a three-day rising streak yesterday, taking its cue from Wall Street
The index is still above the 55-day moving average at 12,030, which has supported prices on a closing basis since June 3
German industrial production is expected to continue its run in contraction territory in April, with forecasts suggesting a reduction of -0.5% m/m (seasonally-adjusted) following a 0.3% decline in March.
HK33HKD Daily Chart
The HongKong33 index fell the most in more than a month yesterday as the protests against the extradition bill escalated, with tear gas and rubber bullets used on protesters
The index is likely eyeing the low of 26,629 struck earlier this month, which is near the 61.8% Fibonacci retracement of the October-April rally at 26,694
Legislative leader Carrie Lam refuses to pull the controversial bill and called for order. The HKMA stated that local financial markets were operating “in an orderly manner”, adding that Hong Kong banks were well capitalised.
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A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
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