Market Roundup
• Trump pulls U.S. from Iran nuclear deal, to revive sanctions.
• European allies decry Trump move on Iran; Israel, Saudis praise it.
• US Mar Consumer Credit, 11.62 bln, 15 bln forecast, 10.60 bln previous.
• US Mar JOLTS Jobs Openings, 6.550 mln, 6.101 mln forecast, 6.052 mln previous.
• US Apr NFIB Business Optimism, 104.80, 104.70 previous.
• US w/e Redbook MM, 0.8%, 0.5% previous.
• US w/e Redbook YY, 4.2%, 3.5% previous.
• CA Apr House Starts, Annualized, 214.4k, 220k forecast, 225.2k previous.
• Trump, China's Xi discuss trade ahead of talks next week.
• Trump says Pompeo en route to N. Korea, cites hopes on U.S. detainees.
• North Korean leader Kim visits China, meets President Xi .
• Argentina seeks financing deal with IMF to address peso volatility.
• Canada says NAFTA talks 'constructive,' auto rules center stage.
Looking Ahead - Economic Data (GMT)
• 8 May 22:45 New Zealand Apr Electronic Card Retail Sales mth, 1% previous
• 8 May 22:45 New Zealand Apr Elec Card Retail Sales YY, 6.0% previous
• 8 May 23:50 Japan Apr Foreign Reserves, 1,268.30 bln previous
• 9 May 00:00 Japan Mar Overtime Pay, 1.0% previous
• 9 May 00:30 Australia May Consumer Sentiment, -0.6% previous
• 9 May 05:00 Japan Mar Coincident Index, 0.7 previous
• 9 May 05:00 Japan Mar Leading Indicator, 0.2 previous
Looking Ahead - Events, Other Releases (GMT)
• 07:00 Riksbank executive board meeting in Stockholm
• 17:15 Federal Reserve Bank of Atlanta President Raphael Bostic speaks in Florida, USA
• 23:50 BOJ releases a summary of its April 26-27 policy meeting in Tokyo
Currency Summaries
EUR/USD is likely to find support at 1.1813 levels and currently trading at 1.1860 levels. The pair has made session high at 1.1895 and hit lows at 1.1833 levels. Euro slipped lower against the dollar on Tuesday after U.S. President Donald Trump said the United States will exit a current deal aimed at curbing Iran's nuclear weapon activity. President Donald Trump on Tuesday pulled the United States out of an international agreement aimed at stopping Iran from obtaining a nuclear bomb, and said he would reimpose economic sanctions on Tehran immediately. The decision is likely to raise the risk of conflict in the Middle East, upset America's European allies and disrupt global oil supplies. Trump says the agreement, the signature foreign policy achievement of Trump's predecessor Barack Obama, does not address Iran's ballistic missile program, its nuclear activities beyond 2025 nor its role in conflicts in Yemen and Syria. Trump said he was willing to negotiate a new deal with Iran, but Tehran has already ruled that out and threatened unspecified retaliation if Washington pulled out. The index that tracks the greenback versus the euro, yen, sterling and six other currencies earlier on Tuesday hit 93.280, its highest level since December. It was last up 0.4 percent at 93.100 in late U.S. trading. The euro declined 0.5 percent to $1.1860 after hitting $1.1836 earlier, its weakest level since late December.
GBP/USD is supported in the range of 1.3452 levels and currently trading at 1.3541 levels. It reached session high at 1.3591 and dropped to session low at 1.3477 levels. The British pound declined to a fresh four-month low against the greenback on Tuesday as the dollar extended its rally and investors continued to trim their pound holdings before a Bank of England meeting on Thursday, when the central bank is expected to keep interest rates on hold. Weaker-than-expected data on UK house price growth and resurfacing worries about divisions within the British government about what the relationship with the European Union should look like after Brexit also hit sterling. The pound has fallen heavily in recent weeks on expectations the BoE would not, as earlier believed, tighten monetary policy because of a relatively weak economy and as investors piled into a rallying dollar. The British currency on Tuesday dropped to $1.3485, its weakest since Jan. 11 and leaving what had been one of the best performing G10 currencies this year down for 2018. Tensions within Britain's governing Conservative Party over how to agree terms of exit from the European Union have also re-emerged as a key political risk for the pound.Prime Minister Theresa May faces a tough battle as her party attempts to steer flagship legislation through Britain's upper house of parliament.
USD/CAD is supported at 1.2836 levels and is trading at 1.2951 levels. It has made session high at 1.2997 and lows at 1.2938 levels. The Canadian dollar weakened against its US counterpart on Tuesday, with the currency breaking out of its recent holding pattern as oil prices fell and the greenback broadly gained. The price of oil, one of Canada's major exports, retreated from its highest in 3-1/2 years ahead of an announcement by U.S. President Donald Trump due later in the day on whether the United States will reimpose sanctions on Iran. Losses for the loonie came as investors weighed prospects for the North American Free Trade Agreement. Senior Canadian, U.S. and Mexican officials met on Monday to try to rescue slow-moving talks to update the NAFTA trade pact in a new bid to resolve key issues before regional elections complicate the process. On the data front, Canadian housing starts declined in April to a seasonally adjusted annual rate of 214,379 units as builders responded to slowing sales in Toronto, Canada's largest city, data from the Canada Mortgage and Housing Corp showed on Tuesday. The Canadian dollar traded 0.5 percent lower at C$1.2951 to the greenback. The currency hit its weakest since March 21 at C$1.2985.
AUD/USD is supported around 0.7416 levels and currently trading at 0.7450 levels. It hit session high at 0.7462 and made session lows at 0.7431 levels. The Australian dollar hit an 11-month low against US dollar on Tuesday as a rally in its U.S. counterpart completely overshadowed an upbeat budget from the country's government which pledged a return to surplus a year early. The Aussie took a turn lower in US trade as the euro and sterling both slid, leaving the U.S. currency as the main beneficiary. The Aussie was last down 0.8 percent at $0.7451, having breached a support around $0.7490.The U.S. dollar has been on a roll as economic data there outpaced much of the rest of the advanced world. Figures on Australian retail sales out earlier on Tuesday were a case in point, badly missing forecasts. Still, the local bond market found solace in an improving outlook for issuance. While Australia's budget was larded with pre-election sweeteners, it was also blessed with higher tax receipts allowing the government to predict a surplus of 0.1 percent of GDP by 2019/20. Net debt was estimated to peak at a relatively small 18.6 percent and issuance was expected to be pared back over coming years, underlining one attraction of Australia's triple-A debt to foreign investors. It was a marked contrast to the United States was the deficit is exploding toward 5 percent of GDP due to massive tax cuts and increased spending.
Equities Recap
Italian stocks were a weak spot in the broader European market on Tuesday as the threat of a snap election grew, while earnings and deal-making sparked some large individual moves elsewhere.
UK's benchmark FTSE 100 closed flat, the pan-European FTSEurofirst 300 ended the day up by 0.03 percent, Germany's Dax ended down by 0.3 percent, Italy's FTSE MIB closed up by 0.4 percent, France’s CAC finished the day down by 0.2 percent.
Wall Street ended little changed on Tuesday while energy stocks rose after President Donald Trump said the United States would quit the Iran nuclear deal, confirming what many investors had expected.
Dow Jones closed down by 0.00 percent, S&P 500 ended down by 0.03 percent, Nasdaq finished the day up by 0.01 percent.
Treasuries Recap
U.S. government bond yields across maturities fell on Tuesday as demand for the safe-haven investment increased following President Donald Trump's announcement that the country would withdraw from its nuclear deal with Iran.
The two-year note's yield was last at 2.514 percent, up from 2.497 at the end of Monday's session.
Commodities Recap
Gold prices were flat following a brief increase on Tuesday after the U.S. dollar backed down from a new 2018 high after U.S. President Donald Trump announced he was quitting the Iranian nuclear deal .
Spot gold was flat at $1,313.76 per ounce by 1:32 p.m. EDT (1732 GMT), while U.S. gold futures for June delivery settled down $0.40, or 0.03 percent, at $1,313.70 per ounce.
Oil prices recouped some losses to end about 2 percent lower on Tuesday after President Donald Trump confirmed the U.S. will withdraw from the Iran nuclear deal in a volatile session which saw prices slump as much as 4 percent.
Brent crude futures settled 1.7 percent lower at $74.85 a barrel while U.S. West Texas Intermediate (WTI) crude futures ended the session 2.4 percent lower at $69.06 per barrel.
