America’s Roundup: Dollar up as Powell downplays chances of negative U.S. interest rates ,Wall Street falls, Gold gains, Oil slips more than 1% despite surprise U.S. crude stock drawdown-May 14th,2020

Market Roundup 

• Fed’s Powell calls for more fiscal spending

• US April PPI (YoY) -1.2%, -0.2% forecast, 0.7% previous

• US April PPI (MoM) -1.3%, -0.5% forecast, -0.2% previous

• US April Core PPI (MoM) -0.3%, 0.0% forecast, 0.2% previous

• US April Core PPI (YoY) 0.6%, 0.9% forecast, 1.4% previous

• UK NIESR GDP Estimate -11.8%, -4.8% previous

• US Crude Oil Inventories -0.745M, 4.147M forecast, 4.590M previous

• US Gasoline Inventories- 3.513M, -2.216M forecast, -3.158M previous    

Looking Ahead Economic Data

• 22:45 New Zealand April FPI (MoM) 0.7% previous    

• 22:45 New Zealand March Permanent/Long-Term Migration 8,250 previous    

• 22:45 New Zealand March External Migration & Visitors -10.80% previous

•23:01 UK April RICS House Price Balance -38% forecast, 11% previous

• 23:50 Japan Foreign Investments in Japanese Stocks -393.7B previous

• 23:50 Japan Foreign Bonds Buying -149.2B previous

• 23:50 Japan April M3 Money Supply 1,843.9T previous

• 23:50 Japan M2 Money Stock (YoY) 3.3% previous

• 01:00 New Zealand Jan Budget Balance -5.154B previous

• 01:00 New Zealand Jan Net Debt Forecast 19.60% previous

• 01:00 New Zealand Jan Economic Forecast  -0.943B previous

• 01:00 Australia MI Inflation Expectations 4.6% previous

• 01:30 Australia April Full Employment Change -0.4K previous

• 01:30 Australia April Participation Rate 65.2% forecast, 66.0% previous

• 01:30 Australia April Employment Change -575.0K forecast,  5.9K previous

• 01:30 Australia April Unemployment Rate 8.3% forecast, 5.2% previous

Looking Ahead - Events, Other Releases (GMT)

• 02:00 New Zealand Annual Budget Release

Currencies summaries

EUR/USD: The euro declined on Wednesday as dollar rose after Federal Reserve Chair Jerome Powell rejected the idea of using negative interest rates as a simulative tool, even as he sounded a gloomy note about economic growth. Powell said the Fed’s view on negative interest rates has not changed and it is not something policy makers are looking at. The U.S. Dollar Currency Index , which measures the greenback’s strength against six major currencies, was up 0.23% on the day at 100.26. The index fell as low as 99.57 earlier in the session. Immediate resistance can be seen at 1.0890 (50% fib), an upside break can trigger rise towards 1.0951 (61.8% fib).On the downside, immediate support is seen at 1.0783 (12th may low), a break below could take the pair towards 1.0752 (23.6% fib).

GBP/USD: Sterling declined on Wednesday as stronger U.S. dollar sent the British pound lower after Federal Reserve Chair Jerome Powell delivered remarks in which he said an “extended period” of weak growth may be in store for the United States. Powell said the central bank won’t implement negative interest rates, but warned that “it will take some time to get back to where we were,” pushing the safe-haven dollar higher. Immediate resistance can be seen at 1.2273 (23.6% fib), an upside break can trigger rise towards 1.2375 (9 DMA).On the downside, immediate support is seen at 1.2209 (Daily low), a break below could take the pair towards 1.2179 (lowered BB).

USD/CAD: The Canadian dollar declined against its U.S. counterpart on Wednesday as stronger dollar across the board and falling oil prices weighed on loonie. U.S. crude prices were down 0.4% at $25.67 a barrel. Potential OPEC+ plans to deepen supply cuts were tempered by demand concerns exacerbated by a possible second wave of coronavirus infections as countries ease lockdowns. At (20:55) GMT, the Canadian dollar was trading 0.18% lower at 1.4026 to the greenback. The currency touched its weakest intraday level since last Thursday at 1.4114 .Immediate resistance can be seen at 1.4117 (Daily high), an upside break can trigger rise towards 1.42569 (Higher BB).On the downside, immediate support is seen at 1.4047 (9 DMA), a break below could take the pair towards 1.3986 (55 DMA).

USD/JPY: The dollar edged lower against the Japanese yen on Wednesday as fears about a second wave of coronavirus infections and as warnings from Federal Reserve Chairman Jerome Powell that the U.S. faces a “significantly worse” recession weighed on investor sentiment and boosted safe haven yen. Powell’s comments come as parts of the global economy are starting to reopen following a deep freeze aimed at curbing the spread of the virus that has pushed unemployment rates to their highest since the Great Depression. Strong resistance can be seen at 107.44 (30 DMA), an upside break can trigger rise towards 108.33 (Higher BB).On the downside, immediate support is seen at 106.72 (9 DMA), a break below could take the pair towards 105.75 (Lower BB). 

Equities Recap

Travel stocks, automakers and banks led a slide in European shares on Wednesday as fears of a resurgence in coronavirus cases and a worrying outlook from the U.S. central bank chief dented hopes of a swift economic recovery.

UK's benchmark FTSE 100 closed down by  1.51 percent, Germany's Dax ended down by 2.56 percent, France’s CAC finished the day down by 2.85 percent.  
     
U.S. stocks fell sharply for the second day on Wednesday after Federal Reserve Chairman Jerome Powell warned of an extended period of weak growth and stagnant incomes due to the coronavirus pandemic, dashing hopes of a quick economic recovery.

Dow Jones closed down  by  2.17% percent, S&P 500 closed down by 1.75 % percent, Nasdaq settled down  by 1.55%  percent.

Treasuries Recap

U.S. Treasury yields were steady on Wednesday after Federal Reserve Chair Jerome Powell gave a solemn assessment of the U.S. economy and renewed his scepticism of negative interest rates.
   
 The benchmark 10-year yield was down 3.1 basis points in morning trading at 0.6606%.

Commodities Recap

Gold rose on Wednesday after U.S. Federal Reserve Chairman Jerome Powell pledged more stimulus measures if required to ease the economic blow from the coronavirus.
Spot gold was up 0.6% at $1,712.83 per ounce by 10:49 a.m. EDT (1449 GMT).

Prices rose as much as 0.9% but pared gains after Powell rejected the idea of using negative interest rates as a stimulative tool.U.S. gold futures rose 0.7% to $1,719.50 per ounce.

Oil prices fell more than 1% on Wednesday despite the first decline in U.S. crude inventories since January, as markets were affected by a solemn address from U.S. Federal Reserve chairman warning that economic recovery from the coronavirus pandemic would take many months.

Brent crude fell 46 cents a barrel, or 1.5% to $29.52 by 11:04 a.m. EDT (1504 GMT), after hitting a low of $28.92 a barrel earlier.West Texas Intermediate crude futures fell 35 cents, or 1.4%, to $25.44.