Market Roundup
- EU Markit Manufacturing Flash PMI, 55.5, 56 forecast, 56.2 previous
- EU Markit Service Flash PMI, 53.9, 54.6 forecast, 54.7 previous
- EU Markit Composite Flash PMI, 54.1, 55 forecast, 55.1 previous
- Germany Markit Manufacturing Flash PMI, 56.8, 57.8 forecast, 58.1 previous
- Germany Markit Service Flash PMI, 52.1, 53 forecast, 58.1 previous
- Germany Markit Composite Flash PMI, 53.1, 54.7 forecast, 54.6 previous
- France Markit Manufacturing Flash PMI, 55.1, 53.7 forecast, 53.8 previous
- France Markit Service Flash PMI, 54.3, 57.2 forecast, 57.4 previous
- France Markit Composite Flash PMI, 54.5, 56.6 forecast, 56.9 previous
- France ILO Unemployment Rate, 9.20%, 8.80% forecast, 8.90% previous
- Great Britain Core CPI YY, 2.1%, 2.2% forecast, 2.3% previous
- Great Britain CPI YY, 2.4%, 2.5% forecast, 2.5% previous
- Great Britain RPI YY, 3.4%, 3.4% forecast, 3.3% previous
- Great Britain RPIX YY, 3.4%, 3.4% previous
- Great Britain RPI Index, 279.7, 278.3 previous
- Trump factor leaves Macron scrambling ahead of Russia trip
- Italy's Conte remains League, 5-Star candidate for prime minister-Di Maio
- Black candidate makes history as women advance in U.S. midterms
- Gold prices slip ahead of Fed minutes
- Oil prices slip on potential easing of OPEC supply curbs
Economic Data Ahead
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of May. The index is likely to stay steady at 56.5 after posting a similar reading in the previous month.
- (0945 ET/1345 GMT) Markit Economics will release preliminary U.S. composite PMI for the month of May. The index posted a final reading of 54.9 in the prior month.
- (0945 ET/1345 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index rose to 54.9 in May after printing a final reading of 54.6 in April.
- (1000 ET/1400 GMT) The U.S. new single-family home sales are likely to decline 2.0 percent to a seasonally adjusted annual rate of 679,000 units in April from 694,000 units in March.
- (1000 ET/1400 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of May. The index posted a final reading of 0.4 in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending May 18.
- (1400 ET/1800 GMT) The Federal Open Market Committee issues minutes of its May 1-2 policy meeting,
Key Events Ahead
- (1415 ET/1815 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari is scheduled to participate in a moderated Q & A session on "New Energy Economic Reality" before the Williston Basin Petroleum Conference in Bismarck, North Dakota.
FX Beat
DXY: The dollar index rallied toward recent highs as markets awaited the minutes of the Federal Reserve's last policy meeting for hints on the pace of further U.S. monetary tightening. The greenback against a basket of currencies trades 0.4 percent up at 93.91, having touched a high of 94.06 on Monday, its highest since Dec. 13. FxWirePro's Hourly Dollar Strength Index stood at 31.22 (Neutral) by 1000 GMT.
EUR/USD: The euro slumped to a fresh 6-month low below the 1.1700 handle as fears of a fiscally profligate new coalition government in Italy raised concerns of a showdown with the European Union. Moreover, data showing Eurozone's economic growth slowed much more sharply than expected May, indicated a hard policy challenge for the European Central Bank ahead. The European currency traded 0.4 percent down at 1.1726, having touched a low of 1.1698, its lowest since Nov. 14. FxWirePro's Hourly Euro Strength Index stood at -91.53 (Slightly Bearish) by 1000 GMT. Immediate resistance is located at 1.1841 (10-DMA), a break above targets 1.1938 (May 15 High). On the downside, support is seen at 1.1670, a break below could drag it till 1.1637.
USD/JPY: The dollar slumped below the 110.00 handle to hit an over 1-week low after U.S. President Donald Trump tempered optimism over the progress made in trade talks with China. Additionally, concern over political risk in Italy triggered a fresh wave of sell-off across global equity markets. The major was trading 1.02 percent down at 109.76, having hit a high of 111.39 on Monday, its highest since Jan. 18. FxWirePro's Hourly Yen Strength Index stood at 165.83 (Highly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. prelim Markit PMI's, new home sales and Fed officials' speeches. Immediate resistance is located at 111.48 (Jan. 18 High), a break above targets 111.87 (Jan. 11 High). On the downside, support is seen at 109.31(May 10 Low), a break below could take it lower 109.05.
GBP/USD: Sterling tumbled to a fresh 2018 low after weaker-than-expected UK inflation raised doubts on whether the Bank of England will hike interest rates as early as August. The economy's annual consumer price inflation eased to 2.4 percent, its weakest increase since March 2017, and down from 2.5 percent this March. The major traded 0.6 percent down at 1.3355, having hit a low of 1.3346 earlier, it’s lowest since Dec. 22. FxWirePro's Hourly Sterling Strength Index stood at -152.86 (Highly Bearish) by 1000 GMT. Immediate resistance is located at 1.3496 (10-DMA), a break above could take it near 1.3569. On the downside, support is seen at 1.3303, a break below targets 1.3273. Against the euro, the pound was trading 0.2 percent down at 87.82 pence, having hit a high of 87.12 pence on Thursday, it’s highest since Apr. 27.
USD/CHF: The Swiss franc rallied to an over 3-week peak as geopolitical tensions intensified after the US President Donald Trump cast doubt on the upcoming summit with North Korea in June. The major trades 0.2 percent up at 0.9903, having touched a low of 0.9893 earlier, it’s lowest since Apr. 30. FxWirePro's Hourly Swiss Franc Strength Index stood at 143.24 (Highly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9979 (5-DMA) and any break above will take the pair to next level till 1.0018 (May 18 High). The near-term support is around 0.9871 and any close below that level will drag it till 0.9820.
Equities Recap
European shares pulled back from a 3-1/2 month high touched in the previous session as a fall in crude prices weighed on energy companies, while the Swiss franc and the Japanese yen rose against the dollar on cautious trading.
The pan-European STOXX 600 index slumped 1.06 percent at 392.74 points, while the FTSEurofirst 300 index plunged 1.01 percent to 1,541.26 points.
Britain's FTSE 100 trades 0.7 percent down at 7,825.98 points, while mid-cap FTSE 250 eased 0.6 percent to 21,060.90 points.
Germany's DAX fell 1.5 percent at 12,966.98 points; France's CAC 40 trades 1.2 percent lower at 5,574.20 points.
Commodities Recap
Crude oil prices eased as the likelihood of higher OPEC output weighed on the market sentiment, however, geopolitical risks are expected to keep prices near multi-year highs. International benchmark Brent crude was trading 0.8 percent down at $78.86 per barrel by 1002 GMT, having hit a high of $80.47 on Thursday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.5 percent down at $71.74 a barrel, after rising as high as $72.28 on Thursday, its highest since Nov. 2014.
Gold prices rallied to a 1-week peak after Trump stated that he was not pleased with recent trade talks between the United States and China, while investors awaited the release of the minutes from the Federal Reserve's last policy meeting. Spot gold was 0.4 percent higher at $1,296.72 per ounce as of 1005 GMT, having hit a low of $1,281.99 on Monday, its lowest price level since Dec. 27. U.S. gold futures for June delivery were down 0.2 percent at $1,289.40 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 3.015 percent lower by 0.049 bps, while 5-year yield was 0.048 bps down at 2.850 percent.
The Germany's 10-year government bond yield fell to a 5-week low after data showed growth in Germany's private sector slowed in May, falling to 0.516 percent and was last down 4 basis points on the day.
The Japanese government bonds firmed, supported by a prailing risk-off sentiment. The JGB 05-year yield stood 0.0bp at-0.110 percent, while the JGB 10-year yield held firm 0.0bp at 0.045 percent.
The Australian government bond futures gained, with the three-year bond contract up 1.5 ticks at 97.770. The 10-year contract rose 2 ticks to 97.145. The New Zealand government bonds rose, sending yields about 2 basis points lower.
