2 Min Market Summary: 22 May 2019

CURRENCY MARKET WRAP 

As of Wed, May 22, Singapore Time zone UTC+8

Dollar Index +0.09%, 98.02
USDJPY, +0.48%, $110.58  
EURUSD, -0.06%, $1.1164
GBPUSD, -0.17%, $1.2708
USDCAD, -0.21%, $1.3401
AUDUSD, -0.52%, $0.6885
NZDUSD, -0.47%, $0.6508

U.S. Treasuries declined modestly, pushing yields slightly higher. The 2-yr yield increased two basis points to 2.24%, and the 10-yr yield increased one basis point to 2.43%. The U.S. Dollar Index increased 0.09% to 98.02. WTI crude declined 0.4% to $63.07/bbl.

In trade, U.S. eased some restrictions imposed last week on China’s Huawei. The roll back, which is in effect for 90 days, suggests changes to Huawei’s supply chain may have immediate, far-reaching and unexpected consequences. The news got stocks bid, as it ran counter to yesterday’s reports that several companies began halting business activity with Huawei. The US Commerce Department will allow Huawei Technologies to purchase American-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets. The reprieve was created as a temporary general licence, in effect until Aug 19, that allows Huawei to purchase goods to maintain existing networks and equipment and provide software updates to existing Huawei handsets.

Aussie, which saw a strong boost from the win of the center-right Liberals over the weekend, gave back a portion of its gains after Governor Lowe conceded that the central bank will likely cut rates in June. Although markets have largely priced an RBA rate cut, up to now Lowe has been non-committal about a rate cut, leaving room for doubt that RBA would move this month. In yesterday’s speech, however, Governor Lowe stated that he would consider a rate cut in June, adding that such a move would help support employment growth and spur inflation.