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The lack of major market catalysts left price action subdued but there were still some noticeable safe-haven flows to the yen and franc. On the flip side, commodity currencies found themselves in the red on lingering trade war concerns.

  • U.S. building permits fell from 1.36M to 1.30M vs. 1.35M forecast in May
  • U.S. housing starts up from 1.29M to 1.35M vs. 1.31M forecast in May
  • New Zealand GDT auction yielded 1.2% drop in dairy prices
  • New Zealand current account surplus at 0.18B NZD vs. 0.05B NZD estimate

Major Events/Reports:

OPEC chatter

Market participants are keeping very close tabs on remarks from OPEC leaders ahead of their two-day pow-wow later this week.

As reported by Kuwait News Agency, their country’s oil minister Bakheet Al-Rashidi said that this upcoming meeting should result in a proper decision to maintain stability of the world market. Furthermore, he said that the cartel shouldn’t discuss prices but should focus on levels of production that would avoid volatility.

Meanwhile, Iran’s oil minister Bijan Zanganeh remarked that the OPEC should resist calls from U.S. President Trump to ease output restrictions. This comes after the Donald is rumored to have talked to Saudi Arabia and other producers to adjust their production policy to make up for lower supply from countries facing sanctions.

However, Zanganeh downplayed the possibility of reaching an actual decision during this OPEC meeting since unanimity is required.

Note that the technical committee comprised of OPEC and non-OPEC members led by Russia have a quick pre-game today to discuss their strategy. Based on Russian energy minister Novak’s latest remarks, they could push for a production cap of 1.5 million barrels per day.

Another round of risk aversion

Following the intense risk-off moves in the earlier session, U.S. markets continued the streak of red, with the Dow effectively wiping out its gains so far this year.

  • Dow 30 index is down 287.26 points to 24,700.21 (-1.15%)
  • S&P 500 index is down 11.18 points to 2,762.57 (-0.40%)
  • Nasdaq is down 21.44 points to 7,725.59 (-0.28%)

Some earnings misses are also being blamed for the huge drop in the Dow, but it appears that multinational companies that have business with China are taking the brunt of the blows.

According to White House trade advisor Peter Navarro, the administration’s efforts to work with China aren’t bearing much fruit.

Crude oil is also significantly lower, reflecting anxiety ahead of the OPEC meeting, but gold was unable to benefit from safe-haven demand.

  • Gold is down $2.73 to $1,277.20 per troy ounce (-0.22%)
  • WTI crude oil is down $0.93 to $64.92 per barrel (-1.41%)

Major Market Mover(s):

CHF

The lower-yielding franc grabbed most of the safe-haven flows from the dollar likely due to the slump in U.S. equities and bond yields.

USD/CHF retreated from .9973 to a low of .9938, NZD/CHF is down from .6982 to .6849, AUD/CHF slipped from .7354 to .7331, and GBP/CHF fell to the 1.3100 handle.

NZD & CAD

The comdoll duo found themselves at the bottom of the forex pile once again, with OPEC jitters weighing on the Loonie and a 1.2% fall in dairy prices hurting the Kiwi.

USD/CAD is up from 1.3245 to a high of 1.3302, CAD/JPY slipped below the 83.00 handle, NZD/USD tumbled back to the .6900 levels, EUR/NZD rallied to a high of 1.6816, and NZD/CAD is up to .9167.

Watch Out For:

  • 11:50 pm GMT: BOJ monetary policy meeting minutes
  • 12:30 am GMT: Australia’s MI leading index (0.2% previous)