Market Roundup
- EUR/USD 0.11%, USD/JPY -0.05%, GBP/USD -0.26%, EUR/GBP 0.3%
- DXY -0.06%, DAX 0.38%, FTSE 0.44%, Brent -0.36%, Gold -0.06%
- Theresa May's Brexit gambit fails as her premiership fades
- Pound set for biggest losing streak vs euro as Brexit plan disintegrates
- Get ready for difficult times, China's Xi warns during trade war
- Fed may cut rates if inflation keeps disappointing – Bullard
- Trump, House Democrats square off in U.S. court over Deutsche Bank documents
- Great Britain Apr CPI YY, 2.1%, 2.2% f'cast, 1.9% prev
- Great Britain Apr RPI YY, 3.0%, 2.8% f'cast, 2.4% prev
- Great Britain Apr PPI Input Prices YY NSA, 3.8%, 4.5% f'cast, 3.7% prev, 3.2% r'vsd
- Great Britain Apr PPI Output Prices YY NSA, 2.1%, 2.3% f'cast, 2.4% prev, 2.2% r'vsd
- Great Britain Apr PPI Core Output YY NSA, 2.2%, 2.2% f'cast, 2.2% prev
Economic Data Ahead
- (0830 ET/1230 GMT) Statistics Canada is expected to report that retail sales gained 1.1 percent in March after rising 0.8 percent in February. While excluding autos, retail sales are likely to have risen 0.9 percent, after advancing 0.6 percent in the previous month.
- (0900 ET/1300 GMT) Mexico releases retail sales numbers for the month of March. The economy's retail sales rose 1.2 percent in February.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending February 3.
Key Events Ahead
- (1000 ET/1400 GMT) Federal Reserve Bank of New York President John Williams speaks and participates in panel at an economic press briefing on current and future outlook for U.S. home ownership, focusing on younger households in New York
- (1010 ET/1410 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic speaks at "Technology-Enabled Disruption: Implications for Business, Labor Markets and Monetary Policy" conference in Dallas
- (1400 ET/1800 GMT) BoE's Andy Haldane speaks on Fourth Industrial Revolution on behalf of Pro Bono Economics charity in London
- (1400 ET/1800 GMT) Federal Open Market Committee releases minutes from its two-day policy meeting of April 30 - May 1.
FX Beat
DXY: The dollar index slightly eased from a 3-1/2 week peak after President of the Federal Reserve Bank of St. Louis, James Bullard, stated that further weakness in inflation could prompt the U.S. central bank to cut interest rates, even if economic growth maintains its momentum. The greenback against a basket of currencies traded 0.05 percent down at 98.00, having touched a high of 98.13 on Tuesday, its highest since April 26. FxWirePro's Hourly Dollar Strength Index stood at 63.17 (Bullish) by 1000 GMT.
EUR/USD: The euro rebounded from an over 2-week low touched in the previous session, after business lobby Confindustria stated that Italy must avoid an EU infringement procedure over its deficit and public debt and negotiate with Brussels a budget adjustment for the next three years. The European currency traded 0.1 percent up at 1.1168, having touched a low of 1.1142 on Tuesday, its lowest since May 3. FxWirePro's Hourly Euro Strength Index stood at 42.79 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1218 (May 7 High), a break above targets 1.1262 (April 22 High). On the downside, support is seen at 1.1118 (April 25 Low), a break below could drag it below 1.1100.
USD/JPY: The dollar consolidated near a 2-week peak, as investors awaited the release of minutes from the U.S. Federal Reserve's latest meeting. The FOMC minutes are likely to provide insights into the May 1 central bank meeting, where the policymakers left interest rates unchanged and signalled little appetite to adjust them any time soon. The major was trading flat at 110.44, having hit a high of 110.67 on Tuesday, its highest since May 7. FxWirePro's Hourly Yen Strength Index stood at -122.94 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the minutes from U.S. Federal Reserve's latest meeting. Immediate resistance is located at 111.11 (78.6% retracement of 111.68 and 109.01), a break above targets 111.61 (May 1 High). On the downside, support is seen at 109.90 (May 8 Low), a break below could take it lower at 109.47 (May 10 Low).
GBP/USD: Sterling plunged to a near 5-month trough as Prime Minister Theresa May's final attempt to secure a Brexit deal failed to win over either opposition lawmakers or many in her own party. Moreover, the selling pressure intensified after data showed British inflation rose last month by less than the Bank of England and investors expectations. The major traded 0.3 percent down at 1.2665, having hit a low of 1.2661 earlier; it’s lowest since Jan. 4. FxWirePro's Hourly Sterling Strength Index stood at -142.37 (Highly Bearish) 1000 GMT. Immediate resistance is located at 1.2754 (5-DMA), a break above could take it near 1.2803 (23.6% retracement of 1.3176 and 1.2685). On the downside, support is seen at 1.2615 (Dec. 27 Low), a break below targets 1.2476 (Dec. 12 Low). Against the euro, the pound was trading 0.4 percent down at 88.16 pence, having hit a low of 88.19, it’s lowest since Feb. 15.
USD/CHF: The Swiss franc gained as risk appetite remained weak in the backdrop of trade tensions between the United States and China and Brexit concerns. The major trades 0.1 percent down at 1.0096, having touched a high of 1.0121 on Monday; it’s highest since May 10. FxWirePro's Hourly Swiss Franc Strength Index stood at 49.25 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0159 (Apr. 18 High) and any break above will take the pair to next level till 1.0196 (May 6 High). The near-term support is around 1.0049 (May 13 Low), and any close below that level will drag it till 1.0000.
Equities Recap
European shares advanced as risk sentiment slightly improved following Washington's temporary relaxation of sanctions against China's Huawei Technologies.
The pan-European STOXX 600 index gained 0.1 percent at 379.99 points, while the FTSEurofirst 300 index surged 0.1 percent to 1,494.94 points.
Britain's FTSE 100 trades 0.5 percent up at 7,365.37 points, while mid-cap FTSE 250 rallied 0.4 to 19,504.49 points.
Germany's DAX rose 0.4 percent at 12,191.29 points; France's CAC 40 trades 0.2 percent higher at 5,393.52 points.
Commodities Recap
Crude oil prices declined after industry data showed an increase in U.S. crude inventories and on-demand concerns linked to a protracted trade war between China and the United States. International benchmark Brent crude was trading 0.2 percent lower at $71.90 per barrel by 0440 GMT, having hit a high of $73.39 on Monday, its highest since Apr, 26. U.S. West Texas Intermediate was trading 0.5 percent down at $62.60 a barrel, after rising as high as $63.79 on Monday, its highest since the May 1.
Gold prices slumped, hovering towards a two-week low, as a stronger dollar and signs of easing U.S.-China friction dented demand for safe-haven assets. Spot gold was trading 0.05 percent down at $1,273.90 per ounce by 1029 GMT, having touched a low of $1,269.41 on Tuesday, its lowest since May 3. U.S. gold futures were unchanged at $1,273.20 an ounce.
Treasuries Recap
The U.S. Treasuries steadied during the afternoon session, as investors remained side-lined ahead of the Federal Open Market Committee’s (FOMC) release of the minutes of the April 30-May 1 monetary policy meeting, due today at 18:00GMT. The yield on the benchmark 10-year Treasury yield hovered around 2.425 percent, the super-long 30-year bond yields traded flat at 2.844 percent and the yield on the short-term 2-year traded tad 1 basis point lower at 2.245 percent.
The United Kingdom’s gilts jumped during the European session following disappointment among investors as the country’s consumer price inflation (CPI) missed market expectations, albeit better than the previous reading in March. The yield on the benchmark 10-year gilts, plunged 4 basis points to 1.046 percent, the super-long 30-year bond yields slumped nearly 3-1/2 basis points to 1.594 percent and the yield on the short-term 2-year traded 2-1/2 basis points lower at 0.716 percent
The German bunds maintained a steady movement during European trading session amid a muted trading session that witnessed data of little economic significance. The German 10-year bond yields, which move inversely to its price, traded nearly flat at -0.064 percent, the yield on 30-year note hovered around 0.591 percent and the yield on short-term 2-year remained tad higher at -0.615 percent.
The Australian government bonds remained flat during Asian trading session amid a silent trading session that witnessed data of little economic significance as investors attempt to re-gain their lost positions owing to weaker risk appetite as the United States and China engaged themselves in a trade war tussle. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.644 percent, the yield on the long-term 30-year bond steadied at 2.289 percent while the yield on short-term 2-year slumped 4 basis points to 1.198 percent.
