Market Roundup
- EUR/USD 0.04%, USD/JPY -0.21%, GBP/USD -0.53%, EUR/GBP 0.58%
- DXY -0.06%, DAX -0.17%, FTSE -0.45%, Brent -0.50%, Gold 0.28%
- Brexit talks between UK government and opposition near collapse - ITV
- China backtracked on nearly all aspects of U.S. trade deal-sources
- U.S. House committee readies contempt vote against Barr
- Iran rolls back nuclear commitments under pact abandoned by Washington
- Germany Mar Industrial Output MM, 0.5%, -0.5% f'cast, 0.7% prev, 0.4% rvsd
- Great Britain Apr Halifax House Price 3M/YY, 5.0%, 4.5% f'cast, 2.6% prev
- Great Britain Apr Halifax House Price MM, 1.1%, 0.1% f'cast, -1.6% prev, -1.3% rvsd
- Great Britain Apr BBA Mortgage Rate, 4.29%, 4.27% prev
Economic Data Ahead
- (0815 ET/1215 GMT) Canadian Mortgage and Housing Corp will report housing starts for the month of April. The indicator is expected to rise at a seasonally adjusted annualized rate of 196,400 from 192,500 in the previous month.
- N/A The Brazilian central bank will meet to set its benchmark Selic rate and is expected to keep interest rates unchanged at 6.5 percent.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending May 3.
Key Events Ahead
- (0830 ET/1230 GMT) Federal Reserve Board Governor Lael Brainard makes opening remarks at "Fed Listens: A Community Listening Session".
FX Beat
DXY: The dollar index steadied as investors’ attention turned on trade talks on Thursday and Friday in Washington, where Chinese Vice Premier Liu will try to strike a deal that would avoid a sharp increase in tariffs on Chinese goods scheduled to take effect on Friday. The greenback against a basket of currencies traded flat at 97.55, having touched a low of 97.38 on Tuesday, its lowest since May 1. FxWirePro's Hourly Dollar Strength Index stood at -7.32 (Neutral) by 1100 GMT.
EUR/USD: The euro rose after data showed German industrial output unexpectedly increased in March, boosted by more construction and consumer goods production. Germany's industrial output rose by 0.5 percent for the month, exceeding a forecast for a 0.5 percent fall. The European currency traded 0.1 percent up at 1.1204, having touched a low of 1.1135 on Friday, its lowest since Apr. 26. FxWirePro's Hourly Euro Strength Index stood at 75.49 (Slightly Bullish) by 1100 GMT. Immediate resistance is located at 1.1229 (April 30 high), a break above targets 1.1262 (April 22 High). On the downside, support is seen at 1.1140 (April 24 Low) a break below could drag it till 1.1096 (May. 2017 Low).
USD/JPY: The Japanese yen rallied to a 6-week peak as increasing concerns about the trade dispute between China and the United States prompted investors to take shelter in perceived safe-haven assets. The major was trading 0.2 percent down at 109.99, having hit a low of 109.90 earlier, its lowest since Mar. 25. FxWirePro's Hourly Yen Strength Index stood at 91.95 (Slightly Bullish) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of Fed Brainard's speech. Immediate resistance is located at 110.58 (38.2% retracement of 111.68 and 109.90), a break above targets 111.07 (Feb. 27 High). On the downside, support is seen at 109.70 (Mar. 25 Low), a break below could take it lower at 109.13 (Jan. 29 Low).
GBP/USD: Sterling plunged, extending losses for the third straight session, as Britain's Conservative government and the opposition Labour Party were struggling to break a parliamentary deadlock over the country's departure from the European Union, while concern grew about a challenge to Prime Minister Theresa May's leadership. The major traded at 0.4 percent down 1.3007, having hit a high of 1.3176 on Friday; it’s highest since Apr. 4. FxWirePro's Hourly Sterling Strength Index stood at --129.74 (Highly Bearish) 0400 GMT. Immediate resistance is located at 1.3132 (Apr. 12 High), a break above could take it near 1.3191 (Apr. 4 High). On the downside, support is seen at 1.2976 (Mar. 29 Low), a break below targets 1.2904 (Apr. 29 Low). Against the euro, the pound was trading 0.6 percent down at 86.12 pence, having hit a low of 86.14 on Monday, it’s lowest since Apr. 30
USD/CHF: The Swiss franc gained, reversing most of its previous session losses, as concern mounting over a U.S.-China trade deal and fears for the global economy drove investors into the safety of safe-haven assets. The major trades 0.2 percent down at 1.0172, having touched a high of 1.0226 on Tuesday; it’s highest since Apr. 26. FxWirePro's Hourly Swiss Franc Strength Index stood at 83.03 (Slightly Bullish) by 1100 GMT. On the higher side, near-term resistance is around 1.0248 (Jan. 11 2017 High) and any break above will take the pair to next level till 1.0280 (Dec. 29, 2016, High). The near-term support is around 1.0130 (April 19 Low), and any close below that level will drag it till 1.0100.
Equities Recap
European shares tumbled as renewed trade tensions and fears for the global economy drove investors into safe-haven assets.
The pan-European STOXX 600 index slumped 0.3 percent at 380.61 points, while the FTSEurofirst 300 index plunged 0.3 percent to 1,495.48 points.
Britain's FTSE 100 trades 0.4 percent down at 7,234.87 points, while mid-cap FTSE 250 fell 0.1 to 19,445.91 points.
Germany's DAX rose 0.05 percent at 12,096.65 points; France's CAC 40 trades 0.1 percent lower at 5,390.33 points.
Commodities Recap
Crude oil prices declined despite record Chinese imports and tighter global supplies easing concerns about a deepening trade war between the United States and China. International benchmark Brent crude was trading 0.2 percent lower at $69.61 per barrel by 1057 GMT, having hit a low of $68.82 on Monday, its lowest since Apr, 3. U.S. West Texas Intermediate was trading 0.2 percent down at $61.27 a barrel, after falling as low as $60.02 on Monday, its lowest since the Mar, 29.
Gold prices rallied to their highest level in more than 3-week as renewed concern over the U.S.-China trade dispute and its potential impact on global growth dented risk sentiment. Spot gold was trading 0.4 percent up at $1,289.68 per ounce by 1100 GMT, having touched a high of $1,290.35 earlier, its highest since Apr. 15. U.S. gold futures edged 0.2 percent higher to $1,288.20 an ounce.
Treasuries Recap
The U.S. Treasuries continued to gain during the afternoon session, ahead of the country’s long-term 10-year auction and Federal Open Market Committee (FOMC) member Brainard’s speech, both scheduled to be held at 17:00GMT and 12:30GMT respectively. The yield on the benchmark 10-year Treasury yield slipped 1-1/2 basis points to 2.433 percent, the super-long 30-year bond yields also suffered 1-1/2 basis points to 2.847 percent and the yield on the short-term 2-year too traded 1-1/2 basis points down at 2.268 percent.
The United Kingdom’s gilts surged during European session ahead of the country’s medium-term 5-year auction and gross domestic product (GDP) for the first quarter of this year, scheduled for May 9 and 10 by 09:45GMT and 08:30GMT respectively. The yield on the benchmark 10-year gilts, plunged 5-1/2 basis points to 1.103 percent, the super-long 30-year bond yields slumped 4 basis points to 1.637 percent and the yield on the short-term 2-year also traded 4 basis points lower at 0.713 percent.
The Japanese government bonds closed nearly flat ahead of the country’s household spending data for the month of March and the Bank of Japan (BoJ) Summary of Opinions, both scheduled to be released on May 9 by 23:30GMT respectively. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped slightly to -0.052 percent, the yield on the long-term 30-year edged 1/2 basis point lower to 0.536 percent and the yield on short-term 2-year traded 2 basis points lower at -0.156 percent.
