Market Roundup
• U.S., China bicker over "extravagant expectations" on trade deal.
• WTO quarterly trade growth indicator remains at nine-year low.
• Full-blown trade war will push world towards recession - Morgan Stanley.
• Fed's Harker says U.S. rates should not be on autopilot.
• Policymakers have changed views on how low unemployment can go -Fed's Williams.
• Oil touches multi-week highs as OPEC signals it may extend cuts.
Looking Ahead - Economic Data (GMT)
• No major data expected
Looking Ahead - Events, Other Releases (GMT)
• 08:15 ECB bank supervisor Pentti Hakkarainen speaks at a conference in Frankfurt
• 09:00 ECB's Luis de Guindos speaks at City Week "The International Financial Services Forum 2019" in London
• 12:30 Federal Reserve Bank of Philadelphia issues Nonmanufacturing Business Outlook Survey for May
• 14:45 Fed's Charles Evans to participate in "Policy Session 3: How Has the Housing Finance System Evolved since the Crisis and Where Is It Headed?" panel before the Federal Reserve Bank of Atlanta 2019 Financial Markets Conference
• 16:00 Fed's Eric Rosengren speaks before the Economic Club of New York
Currency Summaries
EUR/USD: The euro little changed against the U.S. dollar on Monday, as traders avoided making big bets, as they await developments in U.S-China trade negotiations. The euro was up 0.08 percent at $1.1166. An index that tracks the dollar versus a basket of six major currencies was down 0.08 at 97.93. Immediate resistance can be seen at 1.1193 (9 DMA), an upside break can trigger rise towards 1.1241 (50 DMA).On the downside, immediate support is seen at 1.1150 (Daily low), a break below could take the pair towards 1.1100 (Psychological level).
GBP/USD: The pound edged higher against dollar on Monday, as Britain's prime minister made a final effort to get a Brexit deal through parliament before she leaves office. After failing three times to get parliament's approval for her EU divorce deal, Theresa May said she would present a "new, bold offer" to lawmakers with "an improved package of measures" in a final attempt to secure a Brexit deal. The pound was last trading up 0.09 percent at $1.2725 by 2022 GMT. Immediate resistance can be seen at 1.2796 (5 DMA), an upside break can trigger rise towards 1.2878 (9 DMA).On the downside, immediate support is seen at 1.2711 (Daily Low), a break below could take the pair towards 1.2662 (23.6% retracement level).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Monday, as geopolitical and trade tensions weighed on dollar. China on Monday accused the United States of harboring "extravagant expectations" for a trade deal, underlining the gulf between the two sides as U.S. action against Chinese technology giant Huawei began hitting the global tech sector. The Canadian dollar was last trading 0.23 percent higher at 1.3431 to the greenback. Immediate resistance can be seen at 1.3460 (38.2% retracement level), an upside break can trigger rise towards 1.3500 (Psychological level).On the downside, immediate support is seen at 1.3425 (38.2% retracement level), a break below could take the pair towards 1.3393 (50 DMA)
USD/JPY: The dollar was little changed against the Japanese yen on Monday, as investors were on side-lines as Sino-U.S. trade dispute aggravated by a Huawei ban and U.S. President Donald Trump's latest threat to Tehran. U.S. President Donald Trump issued a new threat to Tehran on Sunday, tweeting that a conflict would be the "official end" of Iran, as Saudi Arabia warned it stood ready to respond with "all strength" and said it was up to Iran to avoid war.The dollar was last trading 0.03 percent lower versus the Japanese yen at 110.03. Strong resistance can be seen at 110.06 (50% retracement level), an upside break can trigger rise towards 110.54 (38.2% retracement level).On the downside, immediate support is seen at 109.80 (61.8% retracement level), a break below could take the pair towards 109.45(May 17th low).
Equities Recap
European stocks recorded broad-based losses on Monday, as a U.S. crackdown on China's Huawei Technologies rekindled concerns about worsening global trade and wilted the continent's trade-exposed tech and auto stocks.
UK's benchmark FTSE 100 closed down by 0.6 percent, the pan-European FTSEurofirst 300 ended the day down by 1.15 percent, Germany's Dax ended down by 1.74 percent, France’s CAC finished the day down by 1.6 percent.
U.S. stocks slid on Monday as the White House's restrictions on Chinese telecoms equipment maker Huawei Technologies Co Ltd weighed on the technology sector and raised concerns that the move would further inflame trade tensions between the United States and China.
Dow Jones closed down by 0.33 percent, S&P 500 ended down by 0.68 percent, Nasdaq finished the day down by 1.46 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday, but traded within narrow ranges, reversing course in the afternoon session, as risk appetite improved somewhat despite continuing trade tension between the United States and China.
In late trading, U.S. 10-year note yields rose to 2.413%, down from 2.393% late on Friday. Yields on U.S. 30-year bonds were also higher at 2.831%, down from 2.824% on Friday.
Commodities Recap
Gold steadied on Monday after recovering slightly from a more than two-week low hit earlier in the session, as equity markets fell ahead of the U.S. Federal Reserve's release of minutes from its last meeting.
Spot gold was unchanged at $1,276.94 per ounce as of 1:44 p.m. EDT (1744 GMT), having touched its lowest since May 3 at $1,273.22 earlier in the session. U.S. gold futures settled 0.1% higher at $1,277.30 an ounce.
Oil prices on Monday rose to multi-week highs before easing later in the session as OPEC indicated it was likely to maintain production cuts that have helped boost prices this year, while escalating Middle East tensions provided further support.
U.S. West Texas Intermediate crude futures rose 34 cents to settle at $63.10 a barrel, after hitting $63.81, the highest price since May 1.
Brent crude futures fell 24 cents to settle at $71.97 a barrel, having earlier touched $73.40, their highest since April 26.
