Market Roundup
• Trump 'happy' to keep tariffs on Chinese goods; Beijing threatens retaliation
• Dollar flat as market awaits U.S.-China trade news
• Brainard: Fed should consider targeting longer rates in a future downturn
• Fed's Barkin: Low unemployment and interest rates mean low recession risk
• US Mar Consumer Credit, 10.28 bln, 16.00 bln forecast, 15.19 bln previous
• US 29 Apr, w/e MBA Mortgage Applications, 2.7%, -4.3% previous
• US 29 Apr, w/e Mortgage Market Index, 418.1, 407.2 previous
• US 29 Apr, w/e MBA Purchase Index, 270.2, 259.4 previous
• US 29 Apr, w/e Mortgage Refinance Index, 1,238.5, 1,228.3 previous
• CA Apr House Starts, Annualized, 235.5k, 196.4k forecast, 192.5k previous
Looking Ahead - Economic Data (GMT)
• 01:30 China Apr PPI YY, 0.6% forecast, 0.4% previous
• 01:30 China Apr CPI YY, 2.5% forecast, 2.3% previous
• 01:30 China Apr CPI MM, 0.1% forecast, -0.4% previous
• 05:00 Japan Apr Consumer Confid. Index, 40.5 previous
Looking Ahead - Events, Other Releases (GMT)
• 06:00 First Deputy Governor of Swedish National Bank Kerstin af Jochnick will participate in the seminar on challenges on the housing market in Stockholm
• 07:00 ECB supervisory board member Pentti Hakkarainen participates in a panel discussion in Basel, Switzerland
• 08:00 Norway Central Bank announces interest rate decision in Oslo
• 12:30 Fed Chairman Jerome Powell gives opening remarks before Federal Reserve System Community Development Research Conference in Washington, D.C.
• 14:45 Atlanta Fed President Raphael Bostic speaks on the economic outlook and monetary policy before the Louisiana Bankers Association Convention and Exposition in New Orleans
• 18:15 Chicago Fed President Charles Evans speaks at luncheon before the Federal Reserve System Community Development Research Conference in Washington, D.C.
Currency summaries
EUR/USD: The euro was little changed against the U.S. dollar on Wednesday, as investors remained on side-lines as they awaited result oriented news out of the trade talks between the United States and China.At ( 20:02 GMT), the euro was up 0.01 percent at $1.1191, erasing an earlier losses. An index that tracks the dollar versus a basket of six major currencies was up 0.06 at 97.61. Immediate resistance can be seen at 1.1220 (21 DMA), an upside break can trigger rise towards 1.1257 (50 DMA).On the downside, immediate support is seen at 1.1175 (9 DMA), a break below could take the pair towards 1.1108 (April 26th low).
GBP/USD: The British pound declined against the dollar on Wednesday, as Brexit negotiations stalled with no immediate breakthrough in sight and concern grew about a challenge to Prime Minister Theresa May's leadership. Britain's Conservative government and the opposition Labour Party are struggling to break a parliamentary deadlock over the country's departure from the European Union.The impasse has weakened the pound, which on Wednesday was stuck near $1.3 and heading for its third consecutive day of losses. At (GMT 19:55) the pound slipped as much as 0.3 percent to $1.3004.Immediate resistance can be seen at 1.3029 (9 DMA), an upside break can trigger rise towards 1.3093 (50 DMA).On the downside, immediate support is seen at 1.2987 (100 DMA), a break below could take the pair towards 1.2474 (Daily Low).
USD/ CAD: The Canadian dollar was barely changed against the greenback on Wednesday, as higher oil prices offset worries about trade dispute between the United States and China. The price of oil was boosted by a surprise drawdown in U.S. crude stockpiles but an escalating U.S.-Chinese trade fight limited oil's gains. U.S. crude oil futures settled 1.2 percent higher at $62.12 a barrel. At (20:05 GMT), the Canadian dollar was trading nearly unchanged at 1.3470 to the greenback, or 74.23 U.S. cents. The currency, which has declined 3% since February, traded in a narrow range of 1.3445 to 1.3486.. Immediate resistance can be seen at 1.3523 (23.6 % retracement level), an upside break can trigger rise towards 1.3550 (Higher Bollinger Bands).On the downside, immediate support is seen at 1.3446 (9 DMA), a break below could take the pair towards 1.3408 (21 DMA).
USD/JPY: The dollar weakened against the Japanese yen on Wednesday, as growing concerns about the trade dispute between China and the United States prompted investors to take shelter in safe-haven Japanese yen. The prospects of an escalation rather than a resolution of the spat between the U.S. and China has seen the yen gain in recent days, with the currency up 0.2 percent against the dollar at 110.07 yen, taking its gains to more than 1 percent so far this month.Strong resistance can be seen at 110.74 (5 DMA), an upside break can trigger rise towards 109.74 (9 DMA).On the downside, immediate support is seen at 109.74 (38.2 % retracement level), a break below could take the pair towards 109.22 (Jan 22nd low).
Equities Recap
European shares rose on Wednesday from the previous session's more than one-month closing low on positive sentiment underpinned by easing fears over the path ahead for U.S.-China trade ties and strong results from some German firms.
UK's benchmark FTSE 100 closed up by 0.1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.24 percent, Germany's Dax ended up by 0.9 percent, France’s CAC finished the day up by 0.5 percent.
The S&P 500 fell on Wednesday, as a late slide in shares of Intel Corp erased earlier gains fueled by hopeful notes from the White House regarding the status of trade negotiations with China.
Dow Jones closed down by 1.99 percent, S&P 500 ended down 1.657 percent, Nasdaq finished the day down by 1.64 percent.
Treasuries Recap
U.S. Treasury yields rose on Wednesday, reversing an earlier drop due to trade worries, as traders sold their bond holdings in the wake of a poor 10-year note auction and competing supply from the corporate bond market.
The yields on benchmark 10-year Treasury notes were up 3.6 basis points at 2.484% after hitting a five-week low of 2.426% earlier in the session."
Commodities Recap
Gold prices slipped after climbing to a more than three-week peak on Wednesday as safe haven demand eased after the White House said it had received an indication from China that Beijing wanted to make a trade deal.
Spot gold was 0.3 percent lower at $1,280.76 per ounce at 1:57 pm.U.S. gold futures settled down 0.3 percent at $1,281.40.
Oil futures gained 1% on Wednesday, boosted by a surprise drawdown in U.S. crude stockpiles, but an escalating U.S.-Chinese trade fight limited oil's gains as investors worried about the global outlook for energy demand.
Brent crude futures rose 49 cents, or 0.7%, to settle at $70.37 a barrel, while U.S. West Texas Intermediate (WTI) crude ended 72 cents, or 1.2%, higher at $62.12.
