· The Australian and the New Zealand dollars fell on Friday as bets on interest rate cuts undermined demand as a Group of 20 meeting later this month kept investors sidelined.
The Aussie fell 0.24% to $0.6892 and was down 1.5% for the week, the biggest decline since mid-May. The Kiwi dollar dropped 0.4% to $0.6529, down 2% for the week.
Bond futures imply a 66% probability the Reserve Bank of Australia will follow up its recent quarter-point easing with another in July. If not, a reduction to 1% is considered certain by August.
· Elsewhere, the U.S. dollar gained on Friday and was on track for its biggest weekly rise in three weeks, before U.S. retail sales data. Sales growth was to reach 0.3% in May compared with 0.1% in April.
With investors betting on U.S. rate cuts in the coming weeks, investors are worried that stronger sales might undermine some of those bets and push the dollar higher.
Bond markets are pricing in a 28% chance of a rate cut next week, followed by a sure bet at the end of July.
Against a basket of its rivals, the dollar rose 0.1% to a one-week high of 97.09.
· Wal-Mart Inc., Target Corp., Macy’s Inc. and hundreds of other companies and associations made a plea to President Donald Trump not to impose additional tariffs on Chinese goods, and to return to the negotiating table to strike a trade deal with Beijing.
The president has repeatedly threatened to raise tariffs if Chinese President Xi Jinping doesn’t meet with him at the Group of 20 leaders’ meeting June 28-29 in Osaka, Japan. Trump is still waiting for a response from Xi about a meeting, economic adviser Larry Kudlow said Thursday, and Trump said on Wednesday he had no deadline to return to trade talks.
· China's central bank will step up support to build Shanghai into an international financial center, the central bank governor said Thursday.
The People's Bank of China (PBOC) will support the establishment of an integrated account system for the Chinese currency and foreign currencies in the new section of the Shanghai pilot free trade zone, said Yi Gang, head of the PBOC, at the Lujiazui Forum in Shanghai.
The PBOC will also continue to improve the interbank currency market and bond market, widen the range of foreign exchange options, and expand the number of market entities, Yi said.
The central bank will also support the cooperation between the Shanghai Gold Exchange and the Chicago Mercantile Exchange (CME), vowing to introduce derivatives based on the Shanghai Gold Benchmark Price on the CME.
· China’s industrial output growth slowed to a more than 17-year low of 5% in May, well below expectations, in the latest sign of weakening demand in the world’s second-largest economy as the United States ramps up trade pressure.
Analysts polled by Reuters had forecast industrial output would grow 5.5% from a year earlier, only marginally higher than a 5.4% rise in April.
· Chinese President Xi Jinping told Iran’s president on Friday that China will promote steady development of ties with Iran no matter how the situation changes, Chinese state media said.
The official Xinhua news agency said Xi made the comment in a meeting with Iranian President Hassan Rouhani on the sidelines of the Shanghai Cooperation Organization summit in Bishkek, Kyrgyzstan.
· The latest patent in the World Intellectual Property Organization (WIPO) Global Brand Database reveals that a request to trademark the HongMeng name has been filled in a broad list of countries including Australia, Canada, Cambodia, the European Union, Indonesia, India, Mexico, Spain, Switzerland and Thailand.
· Japan’s exports likely fell at a faster pace in May, down for the sixth straight month, as the U.S.-China trade war takes a toll on the economy, a Reuters poll showed on Friday.
The Bank of Japan is expected to keep its targets for short-term interest rates and its long-term government bond yield unchanged next week, according to the poll.
Consumer prices, another key gauge for market watchers on policy, likely edged down in May, putting pressure on the BOJ as it remains far from achieving its elusive 2% inflation target.
· Hong Kong activists say they are planning another mass rally Sunday to pressure the government to drop legislation to allow extraditions to the Chinese mainland.
It would come a week after hundreds of thousands marched through the city to call on Chief Executive Carrie Lam, Hong Kong’s top official, to withdraw the bill and step down — both of which she rejected.
A protest Wednesday outside the local legislature turned violent with police firing tear gas and rubber bullets at protesters, leaving scores injured.
Police kept a close watch over central Hong Kong as the Asian financial hub returned to normalcy on Friday, with banks re-opening branches closed during violent protests against a proposed extradition bill with mainland China.
· Brent crude on Friday extended sharp gains from the previous day following attacks on two oil tankers in the Gulf of Oman that stoked concerns of reduced crude flows of the commodity through one of the world’s key shipping routes.
Brent crude futures were up 23 cents, or 0.4%, at $61.54 a barrel by 0638 GMT, having settled up 2.2% on Thursday. Still, the contract is heading for a weekly fall of nearly 3%, a fourth week of decline.
U.S. West Texas Intermediate crude futures were down 1 cent at $52.27 a barrel, after earlier rising. WTI also closed up 2.2% in the previous session, but is on course for a weekly decline of 3.2%.
· The International Energy Agency (IEA) slashed its estimate for global oil demand growth for the second consecutive month on Friday, citing intensifying trade concerns amid fears of a global recession.
On the demand side, the IEA followed OPEC by downwardly revising its global oil demand growth forecast for 2019 on Friday.
The energy agency said it now expects oil demand growth to reach 1.2 million barrels per day (b/d) this year, before rebounding to 1.4 million b/d in 2020.
· The shipping route to the Persian Gulf is often referred to as the highway for world trade, a stop in oil shipments in the region would immediately lead to a doubling of international oil prices, an expert has warned.
According to the Norwegian Shipowners' Association, Thursday's attack on two tankers in the Gulf of Oman can negatively affect world trade, as fellow shipping companies will seek to minimise their risks.
Reference: Reuters, CNBC, Bloomberg
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