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High-yielding currencies extended their gains after EU members agreed on a migration deal after tense rounds of negotiations.

  • NZ building consents up by 7.1% vs. 3.6% decline in April
  • Japan’s preliminary industrial production slips by 0.2% vs. 1.1% decline expected, 0.5% growth in April
  • AU HIA new home sales down by 4.4% vs. 4.2% decline in April
  • AU private sector credit grows by 0.2% vs. 0.4% expected, 0.4% previous
  • Japan’s consumer confidence slips from 43.8 to 43.7 against 43.9 expectations

Major Events/Reports:

Major Market Mover(s):

EU members agree on migration deal

The biggest story of the hour is the European Union members reaching a deal on migration after tense rounds of negotiations.

For newbies out there, you should know that EU bigwigs like Germany’s Angela Merkel and France’s Emmanuel Macron had been receiving pressure (from both local and international associates) to accommodate anti-immigration policy views of governments like the U.K.’s and Italy’s if they want to keep the euro bloc intact.

After several rounds of tense negotiations and a nine-hour dinner, the members finally inked a deal.

In its statement, the group pinky swore to use controlled centres – which are set up on a voluntary basis – to distinguish between irregular migrants who will be returned and those who need international protection.

They also talked about “taking steps to bolster European defence,” which includes enhancing defence investment and “further deepening of EU-NATO cooperation.”

The overall agreement was pretty vague and diluted as it had to satisfy the members’ priorities, but at the end of the day a deal was still a deal.

Overall risk appetite

Asian session market players cheered at the EU cooperation and enabled traders to extend the good vibes from the previous trading sessions.

  • Nikkei is up by 012% to 22,296.2
  • A SX 200 is down by 0.20% to 6,230.2
  • Hang Seng is up by 1.14% to 28821.9
  • Shanghai index is up by 1.20% to 2,820.332

Even commodities received support despite a lack of fresh catalysts.

  • Gold is up by 0.18% to $1,250.25
  • Brent crude oil is up by 0.04% to $77.47
  • U.S. WTI is down by 0.03% to $73.16

EUR

An EU agreement fueled the bulls further and enabled the common currency to extend its bullish momentum from yesterday’s positive Euro Zone reports.

EUR/USD is up by 80 pips (+0.69%) to 1.1647
EUR/JPY is up by 111 pips (+0.86%) to 128.93
EUR/GBP is up by 35 pips (+0.40%) to .8879
EUR/CHF is up by 41 pips (+0.35%) to 1.1579

JPY

Risk appetite pulled the low-yielding yen lower across the board. The bulls fought back some, however, thanks to relatively upbeat data releases from Japan.

USD/JPY is up by 20 pips (+0.18%) to 110.69
AUD/JPY is up by 53 pips (+0.66%) to 81.75
CHF/JPY is up by 58 pips (+0.52%) 111.34
GBP/JPY is up by 71 pips (+0.49%) to 145.19
NZD/JPY is up by 34 pip s(+0.46%) to 74.99

Watch Out For:

  • 6:00 am GMT: Germany’s retail sales (-0.5% expected, 2.3% previous)
  • 6:00 am GMT: Germany’s import prices (1.0% expected, 0.6% previous)
  • 6:45 am GMT: France’s consumer spending (0.8% expected, -1.5% previous)
  • 6:45 am GMT: France’s preliminary CPI (0.1% expected, 0.4% previous)
  • 7:00 am GMT: Switzerland’s KOF economic barometer (100.3 expected, 100.0 previous)
  • 7:55 am GMT: Germany’s unemployment change (-8K expected, -11K previous)
  • 8:30 am GMT: U.K.’s current account (-18.0B GBP expected, -18.4B GBP previous)
  • 8:30 am GMT: U.K.’s final GDP to maintain 0.1% reading?
  • 8:30 am GMT: U.K.’s net individual lending (5.2B GBP expected, 5.7B GBP previous)
  • 8:30 am GMT: U.K.’s mortgage approvals to remain at 62K?
  • 9:00 am GMT: Euro Zone’s CPI flash estimate (y/y) (2.0% expected, 1.9% previous)
  • 9:00 am GMT: Euro Zone’s core CPI flash estimate (y/y) (1.0% expected, 1.1% previous)