Europe Roundup: Euro falls as dollar strengthens, European stocks tumble, Gold rises, Oil prices fall on U.S.-China tensions-May 4th,2020

Market Roundup

• Italian April Manufacturing PMI  31.1, 30.0 forecast,  40.3 previous

• French April Manufacturing PMI  31.5, 31.5 forecast, 43.2 previous

• German April Manufacturing PMI  34.5, 34.4 forecast, 45.4 previous

• German Manufacturing PMI  33.4, 33.6 forecast, 44.5 previous

• EU May Sentix Investor Confidence  -41.8, -33.5 forecast, -42.9  previous

Looking Ahead - Economic Data (GMT)

• 13:00 US All Car Sales 2.86M previous

• 13:00 French 12-Month BTF Auction -0.403% previous    

• 13:00 French 3-Month BTF Auction -0.454% previous

• 13:00 French 6-Month BTF Auction-0.427% previous

• 13:00 Brazil April Markit Manufacturing PMI  48.4 previous    

• 13:45 US April ISM NY Business Conditions  12.9% previous

• 13:45 US ISM-New York Index   849.3 previous  
 
• 14:00 US March Durables Excluding Defense (MoM)  -15.8% previous  
 
• 14:00 US March Factory Orders (MoM) -9.7% forecast, 0.0% previous
        
• 14:00 US March Factory orders ex transportation (MoM) -0.9% previous
    
Looking Ahead - Events, Other Releases (GMT)

• No significant events

Fxbeat

EUR/USD: The euro dipped against dollar on Monday, as investors were worried that easing lockdowns would not lead to quick economic recovery. With equity prices falling as a more cautious tone spread across markets, Currency investors were also in a risk averse mood as more countries relaxed restrictions introduced to help fight the spread of COVID-19. At (GMT 12:00), the euro was last trading down 0.37% at 1.0938. Immediate resistance can be seen at 1.0992 (Higher BB), an upside break can trigger rise towards 1.1020 (May 1st high).On the downside, immediate support is seen at 1.0908 (21 DMA), a break below could take the pair towards 1.0860 (9 DMA).

GBP/USD:  Sterling declined against dollar on Monday, as worsening U.S.-China relations increased demand for dollar. The United States made a renewed effort to blame China for the coronavirus outbreak. U.S. Secretary of State Mike Pompeo said on Sunday there was evidence the virus, which has killed nearly a quarter of a million people globally, was made in a Chinese laboratory. The pound was broadly weaker against the dollar,was down 0.4% at $1.2445.  Immediate resistance can be seen at 1.2478 (5 DMA), an upside break can trigger rise towards 1.2500 (Psychological level).On the downside, immediate support is seen at 1.2417 (11 DMA), a break below could take the pair towards 1.2369 (30 DMA).

USD/CHF: The dollar strengthened against the Swiss franc on Monday, as fears that last year’s U.S.-China dispute will be re-ignited boosted greenback. U.S. President Donald Trump and Secretary of State Mike Pompeo have pinned the blame for the pandemic on China, where the new coronavirus outbreak is believed to have originated. The latest salvo came from Pompeo on Sunday, who said there was “a significant amount of evidence” that the virus emerged from a laboratory in the central Chinese city of Wuhan. Immediate resistance can be seen at 0.9659 (55 DMA), an upside break can trigger rise towards 0.9692 (100 DMA).On the downside, immediate support is seen at 0.9645(Lower BB), a break below could take the pair towards 0.9600 (Psychological level).

USD/JPY: The dollar edged lower against the Japanese yen on Monday,as heightened tensions between the U.S. and China diminished market optimism about an economic restart, increasing demand for yen. U.S.-China tensions flared up over the spread of COVID-19 pandemic after U.S. Secretary of State Mike Pompeo said on Sunday there was “a significant amount of evidence” that the virus emerged from a laboratory in the central Chinese city of Wuhan.This further dented the global sentiment after President Donald Trump threatened last week to impose fresh tariffs on China for its handling of the virus. Immediate resistance can be seen at 106.89 (5 DMA), an upside break can trigger rise towards 107.13 (9 DMA ).On the downside, immediate support is seen at 106.36 (Lower BB), a break below could take the pair towards 106.00  (Psychological level). 

Equities Recap

European stocks tumbled on Monday as investors returned from a May Day break to a fresh spat between the United States and China over the coronavirus crisis that triggered sharp declines in cyclical sectors.

At (GMT 12:17),UK's benchmark FTSE 100 was last trading down at 0.11 percent, Germany's Dax was down  by 3.31 percent, France’s CAC finished was down by 3.65 percent.

Commodities Recap

Gold prices rose on Monday as U.S. President Donald Trump’s threat to impose tariffs on China over the coronavirus crisis overshadowed optimism about economies easing lockdown measures, driving investors away from riskier assets.

Spot gold was up 0.3% at $1,704.38 per ounce by 0939 GMT. U.S. gold futures rose 0.8% to $1,715.

Oil prices fell on Monday on worries that a global oil glut may persist even as coronavirus pandemic lockdowns start to ease, amid a fresh spat between the United States and China over the origin of the virus.

Brent crude  was down 57 cents, or 2.2%, at $25.87, at 1021 GMT, and U.S. West Texas Intermediate (WTI) crude  fell $1.41, or 7.1%, to $18.37.

Treasuries Recap

Euro zone bond yields rose on Monday as investors worried that easing lockdowns would not mean a quick economic recovery, while Italian bond yields headed higher as more investors sold up following last week’s European Central Bank meeting.

The German 10-year yield rose 3 basis points to -0.561% . Other core yields, such as in France, were up by similar amounts.

In southern Europe, Italian yields rose, with the 10-year yield up 6 basis points to 1.834% - not far off a one-week high and extending last week’s increase.