Market Roundup
- Macron wins French presidency, to sighs of relief in Europe
- Winning margin of 66.06-33.94 percent wider than predicted
- Euro touches multi-month highs against different currencies
- China Apr exports, imports rise less than expected
- China Apr exports y/y ($), +8.0% vs forecast +10.4%
- China Apr imports y/y ($), +11.9% vs forecast +18.0%
- China Apr trade balance ($) +38.05 bln vs forecast +35.5 bln
- China FX chief says no intention of competitive currency devaluation
- China's April FX reserves rise to $3.03 tln from $3.009 tln in Mar
- Australia Mar building approvals m/m SA, -13.4% vs forecast -4.0%
- Australian Apr business conditions jumped to +14, highest since 2008 - NAB
- Australia to hold new inquiry into 'Big Four' banks
- Saudi energy min says oil output cuts likely to be extended
- Oil extends rebound from 5-mth lows on output cut hopes
Economic Data Ahead
- (0400 ET/0800 GMT) Eurozone May Sentix Index, 25.0 eyed; last 23.9
- (0400 ET/0800 GMT) Great Britain Apr Halifax House Prices m/m, 0.2% eyed; last 0.0%
Key Events Ahead
- N/A ECB's Yves Merch to participate in IIF's 2017 c.bank Governance Group meeting in Tokyo.
FX Beat
DXY: The dollar steadied after falling to 6-week lows against the euro following centrist independent Emmanuel Macron win in the second round of the French presidential elections over far-right candidate Marine Le Pen. The dollar against a basket of currencies traded 0.1 percent up at 98.68, having hit a low of 98.50 earlier, it’s lowest since Nov. 10. FxWirePro's Hourly Dollar Strength Index stood at -48.53 (Neutral) by 0500 GMT.
EUR/USD: The euro retreated from multi-week highs hit early in the session as investors booked profits from its gains following centrist Emmanuel Macron's win over the far-right Marine Le Pen in France's presidential election. The European currency traded 0.2 percent down at 1.0972, having touched an early high of 1.1021, its highest since Nov. 09. FxWirePro's Hourly Euro Strength Index stood at 25.87 (Neutral) by 0500 GMT. Investors will continue to digest Emmanuel Macron's presidential election victory, ahead of Eurozone's Sentix investor confidence, the U.S. labor market conditions index and Fed officials' speeches. Immediate resistance is located at 1.1021 (Session High), a break above targets 1.1100. On the downside, support is seen at 1.0944 (38.2% retrace of 1.0820 and 1.1021), a break below could drag it near 1.0897 (61.8% retrace).
USD/JPY: The dollar steadied after jumping to a near seven-week high of 113.04 yen in early trade, as markets cheered Macron victory's in France's presidential election. Moreover, a surprise to the upside in the headline nonfarm payrolls indicated signs that the economy continues to grow stronger. The major traded 0.1 percent up at 112.76, hovering towards a peak of 113.04 hit on Thursday, its highest since Mar. 17. FxWirePro's Hourly Yen Strength Index stood at -81.05 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. labor market conditions index and FOMC member Mester and Fed Bullards' speeches. Immediate resistance is located at 113.00, a break above targets 113.45. On the downside, support is seen at 112.50, a break below could take it near 112.09 (Previous Session Low).
GBP/USD: Sterling edged down after rising to multi-month highs, as markets reacted to the overnight news of a Macron win in the French elections. Moreover, weakness in the EUR/GBP cross and broadly higher US dollar amid positive treasury yields continued to weigh on the major. Sterling trades 0.1 percent down at 1.2964, having hit a high of 1.2987 earlier, its highest since Sept. 30. FxWirePro's Hourly Sterling Strength Index stood at 96.22 (Slightly Bullish) by 0500 GMT. Investors’ attention will remain on the UK Halifax HPI and U.S. LMCI data, ahead of BoE policy decision and quarterly inflation report (QIR). Immediate resistance is located at 1.3000, a break above could take it near 1.3120 (Sept. 22 High). On the downside, support is seen at 1.2900 (Previous Session Low), a break below targets 1.2830. Against the euro, the pound traded flat at 84.71 pence, having hit a low of 85.08 on Friday, its weakest since Apr. 26.
AUD/USD: The Australian dollar dipped as falling commodity prices continued to drag the major lower. The pair failed to benefit from mixed Chinese trade data and better-than-expected NAB's business confidence and conditions figures. China’s trade surplus in April rose to 262.3 billion in CNY terms, surpassing the estimated figure of CNY 197.2 billion. The Aussie trades flat at 0.7412, having hit a low of 0.7367 on Friday, it’s weakest since Nov. 1. FxWirePro's Hourly Aussie Strength Index stood at -66.77 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S economic releases and Fed speeches. Immediate support is seen at 0.7367 (Previous Session Low), a break below targets 0.7350. On the upside, resistance is located at 0.7439 (38.2 retracements of 0.7556 and 0.7367), a break above could take it near 0.7461 (50% retrace).
NZD/USD: The New Zealand dollar closed the bearish opening gap following the release of mixed Chinese trade figures. China’s exports rose 14.3 percent y/y in April, missing the estimate of 16.8 percent, while imports jumped 18.6 percent y/y, again missing the estimate of 29.3 percent. The Kiwi trades 0.2 percent up at 0.6928, having touched a low of 0.6839 last week, its weakest since Jun. 03. FxWirePro's Hourly Kiwi Strength Index was at 67.87 (Bullish) by 0500 GMT. Investors’ will continue to digest mixed Chinese trade report, ahead of the U.S. economic data. Immediate resistance is located at 0.6940 (May 2 High), a break above could take it near 0.6983 (May 3 High). On the downside, support is seen at 0.6888 (Session Low), a break below could drag it near 0.6860.
Equities Recap
Asian shares gain, while the euro hit a six-month high after centrist Emmanuel Macron comfortably won the French presidential election.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8 percent, halting its three-day losing streak.
Tokyo's Nikkei gained 2.45 percent to 19,922.99 points, Australia's S&P/ASX 200 index rose 0.48 percent to 5,864.90 points and South Korea's KOSPI climbed 1.30 percent at 2,270.30 points.
Shanghai composite index edged down 0.6 percent to 3,084.50 points, while CSI300 index was trading 0.6 percent lower at 3,361.60 points.
Hong Kong’s Hang Seng was trading 0.5 percent higher at 24,601.36 points. Taiwan shares added 0.4 percent to 9,937.25 points.
Commodities Recap
Crude oil prices rose, rebounding from a 5-month low hit in the previous session after Saudi Arabia's energy minister stated that an OPEC-led production cut scheduled to end in June would likely be extended to cover all of 2017. International benchmark Brent crude was trading 0.7 percent up at $49.77 per barrel by 0449 GMT, having hit a low of $46.63 in the previous session, its weakest since Nov. 29. U.S. West Texas Intermediate rose 0.7 percent to $46.80 a barrel, after declining as low as $43.73 on Friday, its lowest since Nov. 15.
Gold edged up, retreating from a seven-week low touched earlier in the session as the euro strengthened after pro-EU candidate Emmanuel Macron won the French presidential election. Spot gold rose 0.3 percent to $1,231.34 per ounce as of 0456 GMT, after touching 1,220.82 earlier in the session, its lowest since March 16. U.S. gold futures were up 0.3 percent at $1,230.60 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.357 percent higher by 0.006 bps, while 5-year yield was 0.005 bps up at 1.882 percent.
The Australian government bonds plunged on the first trading day of the week as investors moved away from safe-haven assets, following the expected victory of Emmanuel Macron in the French election held over the weekend. The yield on the benchmark 10-year Treasury note jumped 3 basis points to 2.69 percent, the yield on the 15-year note climbed 2-1/2 basis points to 3.10 percent and the yield on short-term 2-year traded nearly 2 basis points higher at 1.74 percent.
The New Zealand bonds ended the first trading session of the week on a slightly mixed tone as investors wait to watch the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, scheduled to be unveiled on May 11. At the time of closing, the yield on the benchmark 10-year bond fell 1 basis point to 3.08 percent, the yield on 7-year note slipped 1 basis point to 2.74 percent while the yield on short-term 2-year note traded 1 basis point higher at 2.11 percent.
