Download USD is trading stronger against all the Asian currencies on hawkish

USD is trading stronger against all the Asian currencies on hawkish comments by Fed’s Williams and
Lockhart raised expectations for interest rates hike. Sterling rose against most of its 16 major peers after the
ORB/Telegraph poll showed 55 percent of respondents were in favor of remaining in the European Union, while 40 percent
wanted to leave. The proportion in remain camp increased from a similar survey in April. Britons will vote on the country’s
EU membership on June 23. USD/JPY declines as stronger-than-expected 1Q GDP suggests sales-tax increase may not be
delayed. USD/JPY had been supported this week on expectations that weaker GDP would encourage PM Abe to postpone
the tax hike. Korean Won falls as hawkish comments by Fed’s Williams and Lockhart raised expectations for interest rates
hike and strengthened the dollar.
Benchmark yields were mixed in late trading Tuesday, 2Y-5Y yields higher by 2bp-4bp at highest levels in 2 weeks
following bigger-than-forecast increase in April CPI and hawkish comments by Fed’s Williams and Lockhart, longer
maturities little changed to lower.
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USD/JPY Falls after Better-ThanExpected GDP Damps Stimulus
Bets.
Japan 1Q GDP Rose Annualized
1.7%; Est. +0.3%.
Fed's Kaplan: Brexit Will Have to
Factor in June FOMC Decision.
Fed’s Williams, Lockhart see at
Least Two Rate Hikes this year.
Pound Jumps Most in 3 Weeks as
Remain Vote Rises in Brexit Poll.
Australia sells Bonds at average
Yield 2.3416%.
Australia Economy to Expand
0.6% in 1Q16.
West Texas Intermediate crude added 0.2 percent to $48.42 a barrel, extending gains at a seven-month high,
while Brent gained 0.3 percent to $49.42.Analysts foresee a 3.5 million-barrel drop in U.S. inventories for last week, which
would cap the first two-week decrease since September, before Energy Information Administration data due Wednesday.
Copper snapped a three-day advance, losing 0.3 percent in London as nickel dropped 0.4 percent and zinc slipped 0.4
percent. Meanwhile, gold edged up 0.1 percent to $1,279.85 an ounce in the wake of a three-day rally as investors sought
out haven assets.
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Asian stocks declined as global central bank policy took center stage, with better-than-expected data out of Japan
and the U.S. coloring traders’ expectations when it comes to economic stimulus. US Stocks retreated and the Treasury
yield curve flattened to the narrowest since 2007 amid growing speculation that the Fed sees firm enough economic
growth to raise rates as soon as June. U.S. headline CPI rose 0.4% m/m in April vs est. 0.3%, marking biggest gain in 3 years,
while the core reading matched 0.2% est. S&P 500 -0.94% to 2047.21, DJIA -1.02% to 17529.98, Nasdaq 100 -1.32% to
4322.557.
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UK – Jobless Claims change /
Average Weekly Earnings
3m/YoY.
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EC – Consumer Price Index MoM
/ YoY.
Bahrain Telecommunications Co (Batelco) has submitted a bid for Maltese telecom company Go, the Bahraini
firm said on Tuesday. The State of Qatar has mandated HSBC, JP Morgan, MUFG and QNB Capital as global coordinators on
a potential US dollar bond, according to a lead.
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US – MBA Mortgage applications
/ FOMC Meeting Minutes.
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