Market Roundup
- EUR/USD -0.2%, USD/JPY -0.25%, GBP/USD +0.1%, EUR/JPY -0.4%
- DXY +0.05%, DAX -0.4%, FTSE +0.05%, Brent +0.4%, Copper +0.4%
- EUR/USD off 6-month high on profit taking. 1.0990 high in Asia
- Swiss forex reserves up in Apr. CHF 695.943bln vs previous 683.386bln
- Swedish Mar Industrial output rises 0.3 percent m/m, +3.8 percent y/y vs 0.9%/4.1 percent forecast
- Macron stretches lead as French presidential campaign enters final day - Rtrs
- Brexit minister Davis says EU trying to bully Britain - Rtrs
- EU to cut Greece 2017 growth forecast to 2 pct - EU official - Rtrs
- BoJ Kuroda: 2 percent target challenging, won't be abandoned - Rtrs
- Kuroda: Infl expectations still not anchored around 2percent price target - Rtrs
- Consensus emerging for OPEC, non-OPEC to extend output pact -Saudi governor - Rtrs
- Czech C. bank vice-Gov Hampl says FX development "so far so good" after float - Rtrs
Economic Data Ahead
- (0830 ET/1230 GMT) Nonfarm Payrolls (Apr) market +185k, previous +98k
- (0830 ET/1230 GMT) -- Private Nonfarm Payrolls (Apr) market +180k, previous +89k
- (0830 ET/1230 GMT) -- Manufacturing Payrolls (Apr) market +10k, previous +11k
- (0830 ET/1230 GMT) Unemployment Rate (Apr) market 4.6%, previous 4.5%
- (0830 ET/1230 GMT) Average Hourly Earnings (Apr) market +0.3percent m/m, previous +0.2percent m/m
- (0830 ET/1230 GMT) Workweek Hours (Apr) market 34.4, previous 34.3
- (1300 ET/1700 GMT) Baker-Hughes Rig Count (weekly) previous 697, +9 w/w)
- (1500 ET/1900 GMT) Consumer Credit (Mar) market +$14.85 bn, previous +$15.21 bn
Key Events Ahead
- (0130 ET/0530 GMT) Fed Vice Chair Fischer speaks at Hoover's Monetary Policy Conference; Stanford, CA
- (1145 ET/ 1545 GMT) FedTrade Operation 30-year Ginnie Mae (max $875 mn)
- (1245 ET/1645 GMT) FRB San Fran's Williams gives keynote address for Shadow Open Market Committee; NY
- (1330 ET/1730 GMT) Fed Presidents Bullard, Evans & Rosengren participate in monetary policy panel; CA
FX Beat
DXY:
The dollar index is trading almost unchanged at the end of the week around the 98.60 area, closer to YTD lows. April’s Non-farm Payrolls in focus with consensus expecting the economy to have added 180K jobs during last month.
The index has once again took support near 98.70 and jumped till 98.93 at the time of writing. On the higher side, near term resistance is around 99.57 (21- EMA) and any close above will take the index till 100.03 (Apr 21st high)/100.33 (55- EMA).
Minor trend reversal only above 100.05.The near term support is around 98.70 and any break below will drag the index down till 98.
EURUSD:
EURO extends consolidating in narrow range between 1.09498 and 1.08500 for the past two weeks. The pair broken the high of 1.09498 made after Macron won the first round of French Presidential elections and jumped till 1.09899.
On the higher side, near term resistance is around 1.1000 and any break above targets 1.1020/1.1070 level. The pair should close above 1.100 level for bullish continuation. The near term major support is around 1.0838 (200 day MA) and any close below confirms further weakness, a decline till 1.0780/1.07265 (61.8percent retracement of 1.06822 and 1.09899). Major intraday support is around 1.0940/1.08500.
EUR/GBP:
EUR/GBP edges higher after bottoming out near 0.8470 in early trade. The pair seems to have gathered some buying interest and is testing the 0.8490 region. We see scope for test of 100-DMA at 0.8551. Violation there could see gains upto 0.8593 (200-DMA and then 0.86 (trendline).
Stochs and RSI on the weekly charts are slightly bullishly aligned. Stochs are on the verge of a rollover from oversold levels and RSI has turned north. On the daily charts the pair has closed above 20-DMA and we have seen a 5&20 DMA bullish crossover. The pair finds strong support by triple bottom at 0.83 levels and we see major weakness only on break below.
GBP/USD:
GBP/USD has shown a huge recovery after hitting weekly low at 1.2830 yesterday on account of positive UK economic data and is currently trading around 1.29366. UK Pound recovered after upbeat service PMI and added to this week’s better than expected manufacturing and construction PMI. Market awaits US NFP data for further direction.
The pair is facing major resistance around 1.29655 high made on Apr 28th 2017 and any violation above will accelerate the up move to 1.3000. A follow through buying above 1.3000 will take the pair till 1.3060/1.3090. On the lower side, near term support is around 1.28500 and any break the support will drag the pair till 1.27549 (Apr 21st low).
USD/JPY:
USD/JPY largely unchanged on the day, trades around 112.48 at the time of writing. Bears were in control, knocking the pair below 5-DMA support located at 112.26. Moreover, comments from the BOJ Chief Kuroda also offered fresh impetus to the Japanese currency, collaborating to the sell-off in USD/JPY.
On the charts, we see that the major has retraced from channel top resistance after upside momentum failed shy of 100-DMA. The pair has broken below 5-DMA at 112.23 to hit session lows of 112.15. Next major support is seen at 1H 200-SMA at 111.65. Focus remains on the crucial US NFP data due later in the NA session for further direction.
USD/CHF:
USD/CHF pair recovered part of yesterday's lost ground and edged higher from over one-month lows. The pair is currently trading around 0.98940 0.32percent lower. The pair should close above 200- day MA for minor bullishness. The minor jump from 0.95495 and 1.03436 will come to an end if it breaks below 0.98136.
The near term resistance is around 1.000 and any break above target 1.0024. Any break above 1.0024 will take the pair till 1.00413 (61.8percent retracement of 1.03435 and 0.98135)/1.0120/1.0170.On the lower side, support stands at 0.98135 and any decline below that will drag the pair till 0.9755.
Equities Recap
European shares halted upside on Friday after a week of gains spurred by easing political worries, strong earnings updates and supportive macro data drove top indexes to fresh highs.
Britain's FTSE 100 gained 0.2 pct Friday. The pan-European index STOXX 600 was down 0.15 percent by 0925 GMT but on track to end the week with a gain of more than 1 percent, while France's CAC was down 0.2 percent. Germany's DAX was 0.23 pct lower at 12,618.25 points.
Hong Kong's Hang Seng and the Shanghai Composite Index both closed down 0.8 pct. Australia's S&P/ASX 200 lost 0.7 pct.
Commodities Recap
Oil slumps to near 6-month low before edging higher on OPEC cut talk. Market likely losing faith in speedy market rebalancing. Oil was trading near 5-month lows on concerns about a persistent glut despite assurances from Saudi Arabia that Russia was ready to join OPEC in extending supply cuts.
U.S. West Texas Intermediate (WTI) crude oil futures fell more than 3 percent in early trading to below $44 per barrel, the lowest since Nov 14. Benchmark Brent also fell 3 percent to below $47 per barrel, its lowest since Nov 30. Both Brent and WTI futures are down about 17 percent for the year so far despite the OPEC effort to support prices.
Tumbling stock prices on the back of sliding oil and iron ore prices saw investors take refuge in the safe-haven bullion. Spot gold rose 0.5 percent to $1,233.10 per ounce as of 0746 GMT, but on track for worst week since Nov, poised to end the week down about 3 percent.
Spot silver rose 0.8 percent to $16.41, set to close the week nearly 5 percent down, its third weekly decline. Platinum was up over 1 percent at $908.25 an ounce, set to dip over 4 percent this week. Palladium gained 0.2 percent to $805.20 an ounce and was poised for the worst week since the week of March 10.
Treasuries Recap
U.S.: The U.S. Treasuries traded flat ahead of the Federal Reserve Chair Janet Yellen’s speech, scheduled to be held later in the day, besides the host of FOMC members’ speech lined up for today. Also, the country’s April labour market data is curiously awaited by market participants. The yield on the benchmark 10-year Treasury hovered around 2.35 percent, the super-long 30-year bond yields traded flat at 2.99 percent while the yield on short-term 2-year note also remained steady at 1.31 percent.
German: The German bunds gained amid a quiet trading session that witnessed data of least economic significance. The yield on the benchmark 10-year bond, fell 1 basis point to 0.37 percent, the long-term 30-year bond yields slumped 1-1/2 basis points to 1.16 percent and the yield on the short-term 3-year bond traded 1 basis points lower at -0.64 percent.
NZD: The New Zealand bonds ended the session on a weaker note after the Reserve Bank of New Zealand (RBNZ) remained upbeat in its inflation expectations, released early in the day. At the time of closing, the yield on the benchmark 10-year bond, jumped 1-1/2 basis points to 3.06 percent, the yield on 7-year note also climbed 1-1/2 basis points to 2.73 percent and the yield on short-term 2-year note traded 1/2 basis point higher at 2.11 percent.
AUS: The Australian government bonds slid, tracking weakness in the U.S. counterparts, following a series of strong economic data, released late Thursday. The fall in the number of initial jobless claims amid the Reserve Bank of Australia’s (RBA) slightly upbeat quarterly forecast released early today, added to the disappointment in safe-have assets. The yield on the benchmark 10-year Treasury note, rose nearly 1-1/2 basis points to 2.66 percent, the yield on 15-year note also climbed over 1 basis point to 3.07 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at 1.73 percent.
