Market Roundup
- UK May GfK Consumer Confidence -1 vs -3 previous, -1 expected
- Switzerland Q1 Non-Farm Payrolls 4.878 mln vs 4.897 mln previous
- Sweden Apr Retail Sales +1.7% y/y vs 2.0% prev, 1.9% expected
- Brazil Apr caged net payroll jobs increase to 62.84 k (forecast -40 k) vs previous -119 k
- France May consumer confidence increase to 98 (forecast 94 ) vs previous 94
- Italy May business confidence decrease to 102.1 (forecast 103.0 ) vs previous 102.7
- Italy May consumer confidence decrease to 112.7 (forecast 114.4 ) vs previous 114.1 (revised from 114.2 )
- Turkey Apr foreign arrivals y/y decrease to -28.07 % vs previous -12.84 %
- Turkey May economic confidence index increase to 82.26 vs previous 73.46
- USD/JPY -0.06%, EUR/USD -0.16%, GBP/USD -0.02%
- DXY +0.14%, DAX +0.12%, Brent -1.05%, Iron +2.0%
- DXY set to record key month reversal: Need close above 93.018
- UK PM Cameron says G-7 discussed impact of Brexit
- China-PBOC to keep yuan basically stable
- G7 leaders declaration – Commits to growth, shuns FX devaluations
- Government sources – Japan PM Abe set to delay sales tax hike – Rtrs
- Japan PM Abe considering two-year delay in sales tax hike – Yomiuri
- Lipper – US-based stock funds record 4th straight week of withdrawals
Economic Data Ahead
- (0830 ET/1230 GMT) Real GDP second est Q1 mkt +0.9% q/q, prev +0.5%
- (0830 ET/1230 GMT) Real Final Sales second est Q1 mkt 1.1% q/q, prev +0.9%
- (0830 ET/1230 GMT) Core PCE Px Idx second est Q1 mkt +2.1% q/q, prev +2.1%
- (1000 ET/1400 GMT) U of Mich Sentiment May mkt 95.4, prev 95.8
- (1000 ET/1400 GMT) U of Mich Current Conditions May mkt 108.5, prev 108.6
- (1000 ET/1400 GMT) U of Mich Expectations May mkt 86.6, prev 87.5
- (1115 ET/1515 GMT) FRB NY Staff Nowcast GDP growth Q2 prev 1.7%
Key Events Ahead
- (0630 ET/1030 GMT)Fed Chair Yellen panel discussing econ prosperity/equality; MA
- (0830 ET/1230 GMT) Fed Chair Yellen receives the Radcliffe Medal; MA
FX Beat
EURUSD: EUR/USD has declined till 1.11693 at the time of writing. It is currently trading around 1.11757. The pair’s immediate resistance is around 1.1200 (100 day EMA) and any break above will take the pair till 1.12168 (yesterday high) /1.1245/1.1280. On the lower side pair is holding 100 day support 1.11680 and break below will drag the pair down till 1.11287 (25 th May low)/1.1100 (200 day MA). The pair is trading between 1.1160-1.12150 and market awaits US GDP to provide further cues. EUR 1.2bn vanilla expiries @ 1.1150 might attract on an otherwise dull day
GBP/USD: Cable has taken support near 1.4618 (100 day HMA) and recovered from that level.It is currently trading around 1.46499. Any break below 1.46180 will drag the pair down till 1.4600. the minor weakness can seen below 1.46000 and break below targets 1.4550/1.4480. On the higher side minor resistance is around 1.4740 and any break above targets 1.4770/1.4780 (200 day MA).Cable should close above 200 day MA for further up move and any indicative break above will take the pair till 1.48500/1.4900 in short term.
USD/CHF: USD/CHF has taken support near 200 day HMA and slightly jumped from that level. It is currently trading at 0.99092. On the lower side major support is around 0.9830 (200 day MA) and any break below confirms minor weakness, a decline till 0.9780/0.9750 (21 day MA).The minor support is around 0.9880 (100 day HMA). The pair’s immediate resistance is at 0.99375 (25 th May 2016) and break above targets 0.9980/1.000.
USD/JPY: USD/JPY is facing strong resistance at 110.50 (55 day EMA) and any break above will take the pair till 111.12/111.88 (25 th Apr high). On the lower side major support is around 109.35 (100 day 4H EMA) and any break below will drag the pair till 109/108. The pair should close below 108 for further weakness.
Equities Recap
U.S. stock index futures were little changed on Friday as cautious investors braced for a speech by Federal Reserve Chair Janet Yellen. S&P 500 e-minis were up 2 points, or 0.1 percent, with 92,864 contracts traded. Nasdaq 100 e-minis were up 8 points, or 0.18 percent, on volume of 13,872 contracts. Dow e-minis were up 18 points, or 0.1 percent, with 12,443 contracts changing hands.
European indices were trading mixed heading into U.S. session. Germany's DAX was up 0.17% at 10,290.35, France's CAC-40 was down 0.03% at 4,511.11 and Europe's FTSE 100 Index was down 0.04% at 6,263.14.
Commodities Recap
Gold steadied off an eight-week low on Friday, but remained on track for a fourth straight weekly drop as growing speculation that the Federal Reserve will press ahead with interest rate hikes hurt investor demand. Spot gold was at $1,219.64 an ounce at 0930 GMT, little changed from late on Thursday but off an earlier low of $1,211.30. U.S. gold futures for June delivery were down 60 cents an ounce at $1,219.90.
Silver touched its lowest in nearly six weeks at $16.12, and was later flat at $16.30 an ounce.
Platinum was up 0.5 percent at $993 after touching its weakest in over a month at $981, and was on track for its biggest weekly decline since Jan. 15. Palladium was 0.5 percent higher at $543.90.
Oil futures fell below $49 on Friday, moving further away from a seven-month high hit a day earlier. Brent fell 1.3 percent, or 64 cents, to $48.95 a barrel by 1031 GMT, retreating from the previous session's $50.51 peak, its highest since early November. U.S. crude dropped 45 cents to $49.03 a barrel after touching $50.21 on Thursday, its highest since early October.
Treasuries Recap
U.S: The U.S. Treasuries traded slightly lower ahead of Federal Reserve Chair Janet Yellen's speech that is likely to clear the air on Fed's stance on interest rate hike. The yield on the benchmark 10-year Treasury note fell 1bp to 1.863 pct and the yield on the short-term 2-year bonds dipped 1bp to 0.907 percent by 1135 GMT. Markets now look ahead to preliminary 2Q16 GDP and final May revisions for University of Michigan consumer sentiment as markets now move towards the holiday weekend.
U.K: The U.K gilts traded slumped on Friday as investors appear to have concluded that the U.K. will vote to stay in the European Union in June. The yield on the benchmark 10-year bonds, which moves inversely to its price, moved higher 1bp to 1.428 pct and the yield on the short-term 2-year bonds also climbed 1bp to 0.462 pct by 1130 GMT.
EZ: The European bonds rallied on Friday as investors poured into safe-haven instruments after reading this week's weaker-than-expected data and Britain's upcoming EU referendum which lowered the chances of an interest rate rise in the United States next month. Moreover, traders will remain cautious ahead of Federal Reserve Chair Janet Yellen's speech that is likely to clear the air on Fed's stance on interest rate hike. The benchmark German 10-year bonds yield, which moves inversely to its price fell 2bps to 0.125 pct, French 10-year bunds yield dipped 2bps to 0.462 pct, Italian equivalents inched down 3bps to 1.347 pct, Netherlands 10-year bonds yield tumbled 2bps at 0.335 pct, Spanish 10-year bonds yield ticked lower 2bps to 1.482 pct and British 10-year bonds yield fell 1/2 bps to 1.410 pct by 0900 GMT.
German: The German bunds climbed on Friday as investors poured into safe-haven instruments amid losses in riskier assets including crude oil and stocks. Also, investors were cautious ahead of Federal Reserve Chair Janet Yellen's speech that is likely to clear the air on Fed's stance on interest rate hike. The yield on the benchmark 10-year bonds, which moves inversely to its price fell 2 basis points to 0.126 pct by 0835 GMT.
