Vinson Financials - Market Review for June 07, 2018

FINANCIAL MARKET REVIEW FOR JUN 07, 2018 Asian shares rose to a fresh 11-week high on Thursday, supported by sound economic fundamentals, while expectations the European Central Bank (ECB) may soon start to wind down its stimulus boosted the euro and global bond yields.

Economic data released through the Asian session this morning was limited to new home sales figures and April trade data out of Australia.

For the Aussie Dollar, New home sales fell by 4.2% in April, following March’s 2% fall.

The numbers were another indicator of a deterioration in the real estate sector, supporting the RBA’s concerns over the construction sector that could hamper growth and labour market conditions down the road.

The Aussie Dollar moved from $0.76691 to $0.76719 upon release of the data.

Australia’s Trade surplus narrowed from a revised A$1.731b to A$0.977bn in April, which was worse than a forecasted narrowing to an AS$1bn surplus.

The exports of goods and services fell by 2% to A$34.188bn, while the imports of goods and services remained unchanged at A$33.211bn, leading to the narrowing in April.

The fall in exports was attributed to a 16% fall in the export of non-monetary gold and a 2% fall in the export of non-rural goods. Partially offsetting the declines was an 83% rise in the exports of goods under merchanting and a 1% rise in services.

The import of goods and services fell by just A$9m to A$33.211bn, with the import of consumption goods falling by 2% (A$202m) and monetary gold falling by 15% (A$104m), while the import of capital goods rose by 2% (A$114m) and intermediate and other merchandise goods imports up by 1% (A$111m). The imports of services rose by 1% (A$71m).

The Aussie Dollar moved from $0.76681 to $0.76578 upon release of the figures, before easing back to $0.7655 at the time of writing, down 0.16% for the session.

Elsewhere, the Japanese Yen was up 0.16% to ¥110, the gains coming in spite of a risk on session, with the U.S Dollar under the hammer ahead of tomorrow’s G7.

In the equity markets, the majors were largely in positive territory, the Nikkei and ASX200 closing out the day up 0.87% and 0.53% respectively, while the Hang Seng was up 0.72%, while the CSI300 bucked the trend ahead of tomorrow’s G7, down 0.17% at the time of writing, the moves coming off the back of solid gains in the U.S overnight and continued optimism over the global economic outlook, trade war jitters leaving the CSI300 trailing.

The Day Ahead: For the EUR, economic data through the session is limited to April factory orders out of Germany and finalized 1st quarter GDP numbers out of the Eurozone.

vinsonfinancial.com | (+357) 250-288-6163 | general@vinsonfinancials.com

FINANCIAL MARKET REVIEW FOR JUN 07, 2018 With April factory orders expected to rebound, supporting the upward revision to May’s manufacturing PMI numbers and the Eurozone’s GDP numbers to remain in line with prelims, there could be some further upside for the EUR, which has found its legs off the back of some unexpectedly hawkish commentary from members of the ECB. While the numbers are unlikely to materially influence the ECB’s outlook on policy, the recent moves in the EUR may have been overzealous, the slowdown in the Eurozone economy still of some concern, with May’s private sector PMI numbers showing little reason to consider a rebound in 2nd quarter growth.

At the time of writing, the EUR was up 0.39% to $1.1820, with the rally coming off the back of expectations that the ECB will bring to an end its QE program in the coming months and an easing in geo-political risk in the Dear Mr.Benitez, region, though it remains to be seen whether the swing of the pendulum will remain in favour of the EUR. For the Pound, economic data is limited to house price figures that will unlikely have a material influence on the Pound that has enjoyed renewed attention following the better than expected private sector PMI numbers, raising the expectations of a near-term rate hike, though progress on Brexit continues to be an uncertainty from a policy perspective.

At the time of writing, the Pound was up 0.34% to $1.3458, with direction through the day hinged sentiment towards policy, with hopes of a free trade agreement with the U.S and Brexit chatter also in play.

In the US, it’s a quiet day on the data front, with key stats through the day limited to the weekly jobless claims figures that will provide little direction for the Dollar ahead of tomorrow’s G7.

While the U.S economy is showing its teeth through the 2nd quarter, a material shift in sentiment towards monetary policy elsewhere and concerns over a trade war with China have pinned back the Greenback of late, with tomorrow’s G7 the next main event for the Dollar.

At the time of writing, the Dollar Spot Index was down 0.34% to 93.299, with noise from the Oval Office likely to influence through the day View our full economic calendar for a daily roundup of major economic events.

vinsonfinancial.com | (+357) 250-288-6163 | general@vinsonfinancials.com