Market Roundup
- EUR/USD -0.02%, USD/JPY 0.20%, GBP/USD -0.07%, EUR/GBP 0.07%
- DXY 0.15%, DAX -0.14%, FTSE -0.21%, Brent 0.91%, Gold -0.18%
- U.S., China still 'very far apart' on trade - U.S. ambassador
- Oil hits new multi-year high on tight supply, planned Iran sanctions
- BOJ governor signals room to hike yield target before price goal met
- EZ Q1 GDP Flash Estimate QQ, 0.4%, 0.4% forecast, 0.4% previous
- EZ Q1 GDP Flash Estimate YY, 2.5%, 2.5% forecast, 2.5% previous
- EZ Mar Industrial Production YY, 3.0%, 3.7% forecast, 2.6% previous (r)
- Germany Q1 GDP Flash QQ SA, 0.3%, 0.4% forecast, 0.6% previous
- Germany Q1 GDP Flash YY NSA, 1.6%, 1.8% forecast, 2.3% previous
- Germany Q1 GDP Flash YY SA, 2.3%, 2.4% forecast, 2.9% previous
- Great Britain Apr Claimant Count Unemployment Change, 31.2k, 7.8k forecast, 15.7k previous (r)
- Great Britain Mar ILO Unemployment Rate, 4.2%, 4.2% forecast, 4.2% previous
- Great Britain Mar Employment Change, 197k, 130k forecast, 55k previous
- Great Britain Mar Average Week Earnings 3M YY, 2.6%, 2.6% forecast, 2.8% previous
- Germany May ZEW Economic Sentiment, -8.2, -8.2 forecast, -8.2 previous
- Germany May ZEW Current Conditions, 87.4, 86.2 forecast, 87.9 previous
- Latin America contagion from Argentina turmoil unlikely - Moody's
- Soft China April investment, retail sales suggest economy losing steam
- Strong wage gains propel Central Europe's economies forward
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of New York is expected to report that manufacturing activity index in New York State grew to 15 in May after rising 15.8 in April.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that retail sales edged up 0.3 percent in April after advancing 0.6 percent in March. While excluding autos, retail sales are likely to have gained 0.5 percent, after surging 0.2 percent in the previous month.
- (1000 ET/1400 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.1 percent in March after rising 0.6 percent in February.
- (1000 ET/1400 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index rose to 69 in March after posting a similar increase in April.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (0800 ET/1200 GMT) Federal Reserve Bank of Dallas President Robert Kaplan is scheduled to participate in moderated question-and-answer session on "Energy, Trade, and Economic Growth" hosted by the Council on Foreign Relations in New York.
- (1310 ET/1710 GMT) Federal Reserve Bank of San Francisco President John Williams is expected to speak before the Economic Club of Minnesota in Minneapolis, Minnesota.
FX Beat
DXY: The dollar index rose after U.S. President Donald Trump suggested he would help Chinese telecoms firm, which had been penalised for violating U.S. sanctions with Iran. The greenback against a basket of currencies trades 0.2 percent up at 92.86, having touched a low of 92.24 on Monday, its lowest since May 2. FxWirePro's Hourly Dollar Strength Index stood at -43.99 (Neutral) by 1000 GMT.
EUR/USD: The euro eased, extending previous session losses after data showed Eurozone's economic growth slowed in the first three months of the year and industrial output in March was weaker than expected. Separately, another report showed German growth halved in the first quarter of the year undermined by weaker trade and less state spending. The European currency traded 0.1 percent down at 1.1915, having touched a high of 1.1996 the day before, its highest since May. 3. FxWirePro's Hourly Euro Strength Index stood at 76.97 (Slightly Bullish) by 1000 GMT. Immediate resistance is located at 1.2000, a break above targets 1.2084 (May 1 Low). On the downside, support is seen at 1.1843 (May 10 Low), a break below could drag it till 1.1800.
USD/JPY: The dollar rose to a 3-day high against the Japanese yen as the U.S. Treasury benchmark yield was supported by signs of an easing in trade tensions between the United States and China after President Donald Trump pledged to help Chinese telecoms firm. The major was trading 0.3 percent up at 109.92, having hit a high of 110.01 last week, its highest since May. 2. FxWirePro's Hourly Yen Strength Index stood at -83.65 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. retail sales and Fed officials' speeches. Immediate resistance is located at 110.03 (May 2 High), a break above targets 110.48 (Feb. 2 High). On the downside, support is seen at 109.42 (10-DMA), a break below could take it lower 108.78 (Apr. 25 Low).
GBP/USD: Sterling consolidated near recent lows after data showed UK employment rose although wage growth has yet to rise sharply, leaving the Bank of England still waiting for clues the economy is ready for a rise in interest rates. The British employment rose by 197,000 during the first three months of this year, while annual growth in earnings, excluding bonuses, edged up to 2.9 percent in the three months to March after a 2.8 percent rise in February. Sterling traded 0.1 percent down at 1.3539, having hit a low of 1.3460 on Thursday, it’s lowest since Jan. 11. FxWirePro's Hourly Sterling Strength Index stood at -7.15 (Neutral) by 1000 GMT. Immediate resistance is located at 1.3665, a break above could take it near 1.3730. On the downside, support is seen at 1.3460 (May 10 Low), a break below targets 1.3428. Against the euro, the pound was trading flat at 88.02 pence, having hit a low of 88.36 pence on Thursday, it’s lowest since May 7.
USD/CHF: The Swiss franc eased as the benchmark 10-year U.S. Treasury yield increased to about 3.02 percent, helping support the greenback. The major trades up at 1.0005, having touched a low of 0.9957 the day before, it’s lowest since May. 3. FxWirePro's Hourly Swiss Franc Strength Index stood at 79.20 (Slightly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 1.0017 (Nov. 9 High) and any break above will take the pair to next level till 1.0033 (Nov. 2 Low). The near-term support is around 0.9936 and any close below that level will drag it till 0.9899.
Equities Recap
European shares steadied, boosted by strong results from the banking sector, while the greenback rose following a rise in the U.S. Treasury yields.
The pan-European STOXX 600 index rallied 0.05 percent at 392.35 points, while the FTSEurofirst 300 index surged 0.1 percent to 1,539.70 points.
Britain's FTSE 100 trades 0.3 percent up at 7,532.14 points, while mid-cap FTSE 250 gained 0.2 percent to 20,835.64 points.
Germany's DAX declined 0.1 percent at 12,963.66 points; France's CAC 40 trades 0.05 percent higher at 5,544.96 points.
Commodities Recap
Crude oil prices rose to a fresh 3-1/2-year high, supported by tight supply and planned U.S. sanctions against Iran that are likely to restrict crude oil exports. International benchmark Brent crude was trading 0.6 percent up at $78.88 per barrel by 1032 GMT, having hit a high of $78.97 earlier, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.3 percent up at $71.36 a barrel, after rising as high as $71.34 last week, its highest since Nov. 2014.
Gold prices eased to a near 1-week low, undermined by a firm dollar and outlook for higher interest rates in the United States. Spot gold was trading 0.3 percent down at $1,309.28 per ounce at 1034 GMT, having hit a high of $1,325.83 on Friday, their highest level since Apr. 26. U.S. gold futures for June delivery were, however, down 0.5 percent at $1,311.30 per ounce.
Treasuries Recap
The U.S. Treasuries slumped ahead of the country’s retail sales for the month of April, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasuries jumped 2-1/2 basis points to 3.01 percent, the super-long 30-year bond yields surged 2 basis points to 3.14 percent and the yield on the short-term 2-year traded 1 basis point higher at 2.55 percent.
The German bunds traded lower during European session even as the country’s gross domestic product (GDP) for the first quarter of this year failed to meet market expectations, falling from the reading seen in Q4 2017, registering 0.3 percent q/q. The German 10-year bond yields, which move inversely to its price, rose 1/2 basis point to 0.62 percent, the yield on 30-year note jumped nearly 1-1/2 basis points to 1.29 percent and the yield on short-term 2-year traded tad higher at -0.54 percent.
The New Zealand bonds closed Tuesday’s session on a mixed note as investors remain keen to watch the country’s GlobaldairyTrade (GDT) price auction and the producer price index (PPI) data for the first quarter of this year, scheduled for release today and on May 16 respectively. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slipped 1 basis point to 2.76 percent, the yield on the long-term 20-year note jumped 2 basis points to 3.26 percent and the yield on short-term 2-year closed 1 basis point lower at 1.86 percent.
The Japanese government bonds edged slightly lower even as investors expect to see a downward shift in the country’s first-quarter gross domestic product (GDP) data scheduled to be released later today. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1 basis point to 0.05 percent, the yield on the long-term 30-year note remained tad higher at 0.75 percent and the yield on short-term 1-year remained nearly flat at -0.12 percent.
The Australian government bonds slumped across the board after the Reserve Bank of Australia (RBA) in its May meeting minutes said that the next move from the central bank will be a hike, instead of an interest rate cut. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 4-1/2 basis points to 2.823 percent, the yield on the long-term 30-year Note jumped 3 basis points to 3.313 percent and the yield on short-term 2-year up 2 basis points to 2.027 percent.
