· The yuan gained and the safe-haven yen slid against the dollar on Monday as appetite for risk-sensitive currencies improved after the United States and China agreed to restart their troubled trade talks.
The dollar was up 0.37% at 108.28 yen after going as high as 108.49.
In offshore markets, the Chinese yuan initially gained up to as much as 6.8157 per dollar. It later pared gains to 6.8365 but was still up 0.46%.
· “Most of the discussions that took place between the United States and China at the G20 had already been anticipated, but the mention of Huawei was a bit of a surprise,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
“There were more dollar short positions than expected, and these are being covered. But once these shorts are covered, the dollar’s advance is likely to slow ahead of the non-farm jobs report.”
· Economists polled by Reuters expect U.S. non-farm payrolls, which will be released on Friday, to have risen to 160,000 in June from 75,000 in May.
Other key U.S. data due this week include Wednesday’s Institute of Supply Management’s (ISM) non-manufacturing activity index for June.
· Supported by the greenback’s rise against the yen, the dollar index against a basket of six major currencies added 0.24% to 96.359.
The euro fell 0.14% to $1.1352.
The U.S. Treasury 10-year yield was up about 3 basis points at 2.030%, putting some distance between a 2-1/2-year low of 1.974% plumbed on June 20.
· The U.S. economy is in a ‘good place’ but uncertainties from trade disputes and a slowdown in global growth are on the rise, U.S. Federal Reserve Vice Chair Richard Clarida said on Monday.
Clarida added that it was positive that trade negotiations between the U.S. and China appear to be restarting but noted that some Fed policymakers have been advocating easier monetary policy in the face of uncertainties.
· Japan will tighten restrictions on exports of high-tech materials used in smartphone displays and chips to South Korea in response to a South Korean ruling on war-time forced labor, the industry ministry said on Monday.
A South Korean appeals court on Wednesday upheld a lower court ruling ordering Japanese steelmaker Nippon Steel Corp to compensate Korean plaintiffs who claimed they were forced to work during World War II.
Tighter export controls, effective from July 4, would slow the export process by several months, potentially affecting South Korean tech giants such as Samsung Electronics, SK Hynix and LG Electronics. The measure comes amid growing Japanese frustrations over what it sees as a lack of action by Seoul to address issues related to the top court ruling last October, which ordered Nippon Steel to compensate for forced labor during World War Two.
Japan’s decision to tighten curbs on tech material exports to South Korea violates World Trade Organization rules and Seoul would respond firmly, a senior official at South Korea’s trade ministry said on Monday.
South Korea’s finance minister held a meeting to discuss Japan’s decision to tighten exports of tech materials to the country, a finance ministry official said on Monday
· European Union leaders were locked in all-night negotiations over the bloc’s top jobs, but as day broke on Monday there was still no deal on who should lead its executive as political groups jockeyed for influence.
When the leaders of the EU’s 28 member-states gathered for the emergency summit on Sunday, Dutch socialist Frans Timmermans was in pole position to replace Jean-Claude Juncker as the next European Commission president, under a deal hatched on the sidelines of the G20 summit in Japan last week.
· Oil prices rose more than $1 a barrel on Monday, with OPEC and its allies on track to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week.
Front-month Brent crude futures, for September, touched an intraday high of $66.63 a barrel and were up $1.72, or 2.7%, at $66.46 a barrel by 0639 GMT.
U.S. crude futures for August climbed $1.52, or 2.6%, to $59.99 a barrel, after earlier hitting their highest in over five weeks at $60.13.
Iran on Monday joined top producers Saudi Arabia, Iraq and Russia in supporting a policy aimed at propping up the price of crude amid a weakening global economy.
· Ahead of a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies in Vienna, the most important oil producers there are indicating there’s likely to be an extension of a deal to curb oil production.
Speaking to reporters in the Austrian capital on Sunday, United Arab Emirates Minister of Energy and Industry Suhail al-Mazrouei said an extension of a deal originally struck in December last year — which called for an output cut of 1.2 million barrels per day — would likely be necessary.
Saudi Energy Minister Khalid al-Falih said Sunday that the deal would most likely be prolonged for nine months and no deeper cuts were required.
· CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices are hovering below support-turned-resistance in the 60.39-95 area, with negative RSI divergence warning of ebbing upside momentum. This might precede a turn lower. A break below support at 57.24 exposes the 54.55-55.37 zone. Alternatively, a push above resistance targets the 63.59-64.43 region.
Reference: CNBC, Reuters, Daily FX
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