Market Roundup
• EU tells Britain: There will be no renegotiation of Brexit deal
• Italy's Salvini seizes on election win to demand new ECB debt role
• US May Consumer Confidence, 134.1, 130.0 forecast, 129.2 previous
• US Mar Monthly Home Price YY, 4.9%, 4.9% previous
• Canada to present bill on ratification of new North American trade pact -source -source
Looking Ahead - Economic Data (GMT)
• 01:00 New Zealand May NBNZ Business Outlook, -37.5 previous
• 01:00 New Zealand May NBNZ Own Activity, 7.1 previous
Looking Ahead - Events, Other Releases (GMT)
• N/A Bank of Italy Governor Ignazio Visco presents his "Final Considerations" in occasion of the presentation of 2018 annual report, Rome
• N/A Reserve Bank of New Zealand holds Financial Stability Report media conference
• N/A ECB council member Bostjan Vasle speaks at a banking conference in Ljubljana
• 00:00 BoJ's Kuroda speaks at a conference on "Central Bank Design under a Continued Low Inflation and Interest Rate Environment" in Tokyo
• 07:30 ECB Board Member Yves Mersch speaks at a conference in Frankfurt
• 07:00 Bundesbank President Jens Weidmann speaks in Frankfurt at a Bundesbank conference
• 09:00 ECB's Andrea Enria participates in a roundtable discussion on "Experience of five years of SSM - view of supervisors and banks" at a banking conference, Ljubljana
• 14:00 Bank of Canada key policy interest rate announcement
Currency Summaries
EUR/USD: The euro declined against the U.S. dollar on Tuesday, as investors were relieve that pro-Europe parties won a majority of European parliamentary seats, but they remained uneasy about the future of the economic bloc as eurosceptic and right-wing parties gained seats. The euro lso dipped after the Conference Board said its gauge on U.S. consumer confidence rose to 134.1 in May, the strongest since November. Analysts had forecast a reading of 130.00. In late U.S. trading, an index that tracks the greenback against the euro, yen, sterling and three other currencies was 0.19% higher at 97.919. Immediate resistance can be seen at 1.1390 (38.2% retracement level), an upside break can trigger rise towards 1.1443 (Dec 10th high).On the downside, immediate support is seen at 1.1134 (Lower Bollinger Band), a break below could take the pair towards 1.1110 (Psychological level).
GBP/USD: The British pound declined against the dollar on Tuesday, as stronger dollar and battle to succeed Prime Minister Theresa May got underway weighing on British pound. The prospect of a no-deal Brexit, which most economists say would severely damage the British economy, has re-emerged as a key risk for sterling after May said last week she would step down as leader of the Conservative Party on June 7.With the Brexit Party handing the ruling Conservatives a drubbing in last week's European elections, many Conservative candidates vying for May's job are under pressure to deliver a more decisive break with the EU when Britain is scheduled to leave the bloc on Oct. 31. Sterling slipped 0.13% to $1.2651, having traded as low as $1.2605 last week. Immediate resistance can be seen at 1.2748 (38.2% retracement level), an upside break can trigger rise towards 1.2800 (Psychological level).On the downside, immediate support is seen at 1.2640 (Session low), a break below could take the pair towards 1.2600 (Psychological level).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Tuesday, as the greenback broadly climbed, but the loonie stayed within its recent range ahead of a Bank of Canada interest rate decision on Wednesday. The Bank of Canada is widely expected to leave its benchmark interest rate unchanged on Wednesday at 1.75% as it weighs developments in household spending, oil markets and global trade policy. The price of oil increased on Tuesday after flooding throughout the Midwest constrained crude flow from the main U.S. storage hub in Cushing, Oklahoma. U.S. crude oil futures CLc1 settled 0.9% higher at $59.14 a barrel. At (2129 GMT), the Canadian dollar was trading 0.4% lower at 1.3490 to the greenback. Immediate resistance can be seen at 1.3489 (Higher Bollinger Banads), an upside break can trigger rise towards 1.3501 (23.6% retracement level).On the downside, immediate support is seen at 1.3471 (38.2% retracement level), a break below could take the pair towards 1.3450 (50% retracement level).
USD/JPY: The U.S. dollar declined against the yen on Tuesday, as trade tensions drove investors to buy safe-haven currencies. U.S. President Donald Trump said on Monday at a news conference with Japanese Prime Minister Shinzo Abe that he was "not ready to make a deal with China," denting hopes of a trade agreement between the world's biggest economies. Furthermore, a weak U.S. manufacturing activity data coupled with a dip in new orders for U.S.-made capital goods last week ignited worries that the trade conflict may hurt the world's largest economy.Strong resistance can be seen at 109.38 (38.2% retracement level), an upside break can trigger rise towards 109.69 (50% retracement level).On the downside, immediate support is seen at 109.18 (Daily low), a break below could take the pair towards 108.47 (Lower Bollinger Band).
Equities Recap
European shares dipped on Tuesday, with bank stocks capturing investors' attention as concerns about a possible fine on Italy due to the indebted country's yawning budget deficit exacted a heavy toll on risk sentiment.
The UK's benchmark FTSE 100 closed down by 0.01 percent, FTSEurofirst 300 ended the day down by 0.19 percent, France’s CAC finished the up by 0.5 percent. Germany's Dax finished the day down by 0.4 percent .
U.S. stocks closed lower on Tuesday, with initial gains giving way to declines as the likelihood of a prolonged trade war between the United States and China once again kept risk appetite in check.
Dow Jones closed down by 0.93 percent, S&P 500 ended down 0.85 percent, Nasdaq finished the day down by 0.40 percent.
Treasuries Recap
Benchmark U.S. Treasury yields fell to their lowest levels since October 2017 on Tuesday on concerns about the trade war between the United States and China and Italy's budget policy, before coming off their lows ahead of heavy new supply.
Commodities Recap
Gold on Tuesday slipped from the previous session's one-week peak, pulled down by a firm dollar as the currency was the preferred safe-haven amid uncertainty over U.S.-China trade tensions.
Spot gold fell 0.5% to $1,278.12 per ounce by 2 p.m. ET (1800 GMT), having touched its highest since May 17 at $1,287.32 in the previous session.U.S. gold futures settled down 0.5% at 1,277.10 per ounce.
U.S. crude futures gained almost 1% on Tuesday after flooding throughout the Midwest constrained crude flow from the main U.S. storage hub in Cushing, Oklahoma.
U.S. West Texas Intermediate (WTI) futures settled at $59.14 a barrel, up 51 cents, or 0.9%, from its close on Friday before the long Memorial Day holiday weekend.
