MArket Roundup
• Fed's patience on interest rates to last 'for some time'
• Fed's Williams says U.S. rates in the right place, inflation pressure nonexistent
• Fed's Kaplan says U.S. is 'flirting' with yield curve inversion
• Next round of U.S. tariffs on China at least a month away -Mnuchin
• Trump's Japan trip not expected to focus on trade -official
• Washington not ready for trade talks with EU - Malmstrom
• Resisting calls to resign, Britain's May will campaign for EU elections
• In latest blow to Britain's May, Leadsom resigns over new Brexit approach
• CA Mar Retail Sales MM , 1.1%, 1.0% forecast, 0.8% previous
Looking Ahead - Economic Data (GMT)
• 22 May 23:00 Australia May Manufacturing PMI, 51.0 previous
• 22 May 23:00 Australia May Services PMI, 50.5 previous
• 22 May 23:00 Australia May Composite PMI, 50.6 previous
• 23 May 00:30 Japan May Nikkei Mfg PMI Flash, 50.2 previous
Looking Ahead - Events, Other Releases (GMT)
• N/A Participation by the ECB President Mario Draghi in the 81st plenary meeting of the Group of Thirty in Madrid, Spain
• 08:15 German Economy Minister Peter Altmaier speaks at MTU Rolls Royce plant in Friedrichshafen, Germany
• 08:40 ECB's Vice President Luis de Guindos at Supervision and Integration Conference in Europe (AFME) in Frankfurt, Germany
• 17:00 Fed's Kaplan, Barkin, Bostic and Mary Daly participates in a panel hosted by the Federal Reserve Bank of Dallas
Currency Summaries
EUR/USD: The euro edged lower against the U.S. dollar on Wednesday, after minutes from the May Federal Open Market Committee meeting showed officials agreed that their current patient approach to setting monetary policy could remain in place "for some time."Policymakers saw little need to change rates in either direction. A rate hike in 2019 is unlikely, even as the U.S. economy continues to grow and inflation remains muted, the minutes showed. The Federal Reserve's last meeting came before U.S. President Donald Trump's administration increased tariffs on Chinese goods and intensified global trade tensions further with restrictions on Chinese telecom giant Huawei Technologies Co Ltd . The potential economic risks of a trade war were therefore not a main topic of discussion. The euro was down 0.05 percent at $1.1153. Immediate resistance can be seen at 1.1187 (11 DMA), an upside break can trigger rise towards 1.1235 (50 DMA).On the downside, immediate support is seen at 1.1142 (Daily low), a break below could take the pair towards 1.1100 (Psychological level).
GBP/USD: Sterling declined against the dollar on Wednesday, after a Sky News report that Prime Minister Theresa May was going to resign later in the day. The currency had earlier plumbed four-month lows against the dollar, falling as much as 0.6% at one point as it became clear that May's last-ditch Brexit plan had failed to win over either opposition lawmakers or many in her own party.With the plan appearing dead in the water, some traders said they saw a rising chance of Britain leaving the European Union without a transition deal to smooth economic disruption. (Full Story)The pound touched a low of $1.2625, its lowest since mid-January, and weakened 0.25% against the euro to 88.05 pence .It clawed back some losses after Sky News cited a lawmaker as saying May would resign later on Wednesday .Immediate resistance can be seen at 1.2713 (5 DMA), an upside break can trigger rise towards 1.2805 (9 DMA).On the downside, immediate support is seen at 1.2627 (Session Low), a break below could take the pair towards 1.2602 (23.6 % retracement level).
USD/CAD: The Canadian dollar strengthened to a near one-month high against the greenback on Wednesday ,as U.S. President Donald Trump told congress to prioritize a trade deal with Canada and Mexico, and as domestic data showed a jump in retail sales.Canadian retail sales grew by 1.1% in March from February, due largely to higher sales at gasoline stations, Statistics Canada said. Sales volumes were more subdued, rising 0.3%..Canadian retail sales grew by 1.1% in March from February, due largely to higher sales at gasoline stations, Statistics Canada said. Sales volumes were more subdued, rising 0.3%. At (1958 GMT), the Canadian dollar was trading 0.18 % higher at 1.3421 to the greenback. The currency touched its strongest intraday level since April 23 at 1.3358.Immediate resistance can be seen at 1.3443 (9 DMA), an upside break can trigger rise towards 1.3500 (Psychological level).On the downside, immediate support is seen at 1.3394 (50 DMA), a break below could take the pair towards 1.3330 (100 DMA).
USD/JPY: The dollar strengthened against the Japanese yen on Wednesday, as investors sought safety in the Japanese yen amid renewed worries over the U.S.-China trade standoff after reports the United States has another Chinese tech firm in its sights. Relief over Washington's temporary relaxation of curbs against China's Huawei Technologies Co Ltd faded after reports that the White House is considering further sanctions on Chinese video surveillance firm Hikvision. The yen strengthened away from two-week lows against the dollar, rising 0.14% to 110.33 yen. Strong resistance can be seen at 110.59 (21 DMA), an upside break can trigger rise towards 110.98 (50 DMA).On the downside, immediate support is seen at 110.14 (9 DMA), a break below could take the pair towards 109.81 (9 DMA).
Equities Recap
European shares edged lower on Wednesday on unease over developments in the U.S.-China trade war and Britain's uncertain departure from the European Union..
The UK's benchmark FTSE 100 closed up by 0.2 percent, FTSEurofirst 300 ended the day down by 0.03 percent, Germany's Dax ended up by 0.2 percent, and France’s CAC finished the down by 0.3 percent.
Wall Street's major indexes dipped on Wednesday as inflamed trade tensions between the United States and China weighed on investor sentiment.
Dow Jones closed down by 0.39 percent, S&P 500 ended down 0.28 percent, Nasdaq finished the day down by 0.45 percent.
Treasuries Recap
U.S. Treasury yields fell on Wednesday, pressured by worsening trade tensions between the United States and China after a media report said the Trump government is considering limits to Chinese video surveillance firm Hikvision's ability to buy American technology.
In afternoon trading, U.S. 10-year note yields fell to 2.39% from 2.426% late on Tuesday.Yields on U.S. 30-year bonds slid to 2.815% from 2.842% on Tuesday.On the short end of the curve, U.S. 2-year yields were down at 2.228% from Tuesday's 2.258%
Commodities Recap
Gold was little changed on Wednesday in the wake of minutes from the latest U.S. Federal Reserve meeting, but the precious metal was trading above the two-week low hit in the last session as stock markets slid on fresh trade tensions.
Spot gold was steady at $1,273.68 per ounce as of 3:10 p.m. EDT (1910 GMT), having fallen to its lowest level since May 3 on Tuesday at $1,268.97.U.S. gold futures settled 0.1% higher at $1,274.20.
Oil prices fell about 2% on Wednesday as an unexpected build in U.S. crude inventories compounded investor worries that a trade fight between Washington and Beijing could dent crude demand over the long haul.
Brent crude futures settled at $70.99 a barrel, dropping $1.19, 1.7%. U.S. West Texas Intermediate (WTI) crude futures ended $1.71, or 2.7%, lower at $61.42 a barrel.
