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Economic calendar (GMT0):
00:30 Australia Westpac Consumer Confidence June -6.8% 0.2%
08:30 United Kingdom Average Earnings, 3m/y April +1.7% +1.2% +0.7%
08:30 United Kingdom Average earnings ex bonuses, 3 m/y April +1.3% +1.2% +0.9%
08:30 United Kingdom Claimant count May -25.1 -25.0 -27.4
08:30 United Kingdom Claimant Count Rate May 3.3% 3.2%
08:30 United Kingdom ILO Unemployment Rate April 6.8% 6.7% 6.6%
09:00 OPEC OPEC Meetings
The U.S. dollar traded lower against the most major currencies, but the U.S. currency is still supported by higher U.S. Treasury yields. The yield on the U.S. 10-year Treasuries climbed to 2.64% on Tuesday. That was the highest yield since last month.
The euro traded mixed against the U.S. dollar. The euro suffers due to bond yield gap between some euro area government bonds and U.S. Treasuries. While the currency in the Eurozone is to remain permanently cheap, the first interest rate hike by the Fed in the United States and by the Bank of England in the U.K. is more likely.
The European Central Bank cut its interest rate last Thursday. The ECB reduced its deposit rate to -0.10% from 0.0%. The European Central Bank is the world’s first major central bank to use a negative rate. The deposit rate of -0.10% means that commercial bank will be charged for holding their reserves. This measure should spur commercial banks to ramp up lending.
The British pound increased against the U.S. dollar due to the strong labour market data in the U.K. The U.K. unemployment rate fell to 6.6% in the three months to April from 6.8% in the previous three months. That was the lowest level since early 2009. Analysts had expected a decline to 6.7%.
Jobless claims (claimant count) declined by 27,400 in May, compared with a forecast for a decline of 25,000 people. April’s figure was revised to a decrease of 28,400 from 25,100.
Weekly earnings increased by 0.7% in the three months to April, missing expectations for a 1.2% gain, after a 1.7% rise in the previous three months. The growth of wages is slower than inflation in the U.K. The inflation rate in the UK was 1.8% in April.
The Japanese yen rose against the U.S. dollar due to expectations that the Bank of Japan will not expand its stimulus measures at its meeting this week.
EUR/USD: the currency pair traded mixed
GBP/USD: the currency pair climbed to $1.6796
USD/JPY: the currency pair declined to Y101.85
The most important news that are expected (GMT0):
14:30 U.S. Crude Oil Inventories June -3.4
18:00 U.S. Federal budget May 106.9 -142.8
21:00 New Zealand RBNZ Interest Rate Decision 3.00% 3.25%
21:00 New Zealand RBNZ Rate Statement
21:00 New Zealand RBNZ Press Conference
23:01 United Kingdom RICS House Price Balance May 54% 52%
23:50 Japan Core Machinery Orders April +19.1% -10.8%
23:50 Japan Core Machinery Orders, y/y April +16.1%
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