Market Roundup
- EUR/USD -0.1%, USD/JPY -0.1%, GBP/USD +0.1%, EUR/GBP -0.2%
- DXY -0.1%, FTSE +0.2%, DAX flat, Gold +0.1%, Copper -0.3%
- EUR/USD hits 2-week low of 1.0858
- Dollar slips initially after Comey firing news then recovers
- Gold edges off 8-week low as Comey firing weighs on risk appetite
- Copper vulnerable, signs of weak China demand weigh
- France Mar Trade balance -5.353bln vs previous -6.432bln revised -6.00bln forecast
- Norway's economy "has turned the corner" -central bank's Nicolaisen
- Dovish Swedish central bank says too early to change policy direction-minutes
- France's Hollande to hand presidential powers to Macron on Sunday
- BoJ Gov Kuroda: Not thinking now of changes to policy mix, YCC main focus
- Kuroda: Too early to talk on specific exit strategies
- Kuroda: Monitoring FX impact on economy
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Labor Department publishes import and export prices index for the month of April. The import prices are likely to have gained 0.2 percent after declining 0.2 percent in March, while exports are expected to have edged up 0.1 percent after increasing 0.2 percent in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending May 5.
- N/A The Federal Reserve releases its Loan Officer Survey.
- (1700 ET/2100 GMT) The Reserve Bank of New Zealand will announce its interest rate decision and publishes its Monetary Policy Statement (MPS).
- (1400 ET/1800 GMT) The U.S. reports its monthly budget statement for the month of April. The Treasury Department is likely to show a budget deficit of $175.8 billion, compared to a $176.00 billion deficit in March.
- (1500 ET/1900 GMT) Argentina releases inflation data for the month of April. Consumer prices are likely to increase 2.07 percent after rising 2.4 percent in the previous month.
- (1901 ET/2301 GMT) The Royal Institution of Chartered Surveyors will report Britain's Housing Price Balance for the month April. The indicator rose 22 percent in the previous month.
- (1950 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending May 5.
- (1950 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending May 5.
- (1950 ET/2350 GMT) Japan's Customs Office will release Trade Balance (BOP Basis) figures for the month of March. The economy posted a trade surplus of 1,076.8 billion yen in the earlier month.
Key Events Ahead
- (1245 ET/1645 GMT) Federal Reserve Bank of Boston President Eric Rosengren speaks before a joint meeting of the Lake Champlain Regional Chamber and Central Vermont Chamber of Commerce at South Burlington, Vermont.
- (1245 ET/1645 GMT) FedTrade Operation 30-yr Fannie Mae/Freddie Mac (max $1.6 bn)]
- (1320 ET/1720 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari participates in a fireside chat on Too-Big-to-Fail with John Taft, former CEO of RBC Wealth Management in the U.S.
FX Beat
DXY: The dollar eased from an eight-week high against the Japanese yen as U.S. President Donald Trump's dismissal of his FBI chief strengthened safe-haven assets. The greenback against a basket of currencies traded flat at 99.54, having hit a high of 99.69 on Tuesday, it’s highest since Apr. 11. FxWirePro's Hourly Dollar Strength Index stood at 38.42 (Neutral) by 1000 GMT.
EUR/USD: The euro declined, extending losses for the third consecutive session as the greenback gained significant strength against its major peers, despite a sell-off in the US yields and mixed market sentiment. Investors’ now await the European Central Bank President Draghi’s speech at the Dutch House of Representatives later in the day, for hints on tapering. The European currency traded 0.1 percent down at 1.0865, having touched a high of 1.1021 on Monday, its highest since Nov. 09. FxWirePro's Hourly Euro Strength Index stood at -27.45 (Neutral) by 1000 GMT. Technically in the hourly, the major intraday resistance is around 1.0900 (hourly Kijun-Sen) and any break above will take the pair till 1.0939 (100- H MA)/1.0970 (cloud top)/1.1000. On the lower side, near term major support stands around 1.08500-1.0836 (200- day MA) any break below will drag it till 1.07400.
USD/JPY: The dollar declined from a near 8-week high hit in the previous session as renewed worries over the Korean peninsula and Trump abruptly firing FBI Director triggered a fresh bout of risk aversion. Moreover, comments from Bank of Japan Governor Haruhiko Kuroda and a retreat in U.S. Treasury bond yields boosted the bid tone around the Japanese yen. The major traded 0.1 percent down at 113.83, pulling away from a peak of 114.32 hit on Tuesday, its highest since Mar. 17. FxWirePro's Hourly Yen Strength Index stood at -80.35 (Slightly Bearish) by 1000 GMT. The pair is facing support at 111.60 (100 EMA) and any break below will drag it down till 110.50 (61.8% retracement of 108.13 and 114.32). On the higher side, any break above 114.35 will take it to next level till 115.50 likely.
GBP/USD: Sterling rose towards the 1.300 handle as investors anxiously awaited this week's Bank of England inflation report and policy meeting. However, it trimmed gains as a rebound in the U.S. dollar weakened the bid tone around the British currency. Sterling trades 0.1 percent up at 1.2944, having hit a high of 1.2987 earlier, its highest since Sept. 30. FxWirePro's Hourly Sterling Strength Index stood at 59.15 (Bullish) by 1000 GMT. On the higher side, major resistance is around 1.3000 and any break above confirms bullish continuation. Any break above will take the pair till 1.3050/1.3088 in the short term. The near term support is around 1.2900 (daily Tenkan-Sen) and any break below will drag it down till 1.2830 (May 4 low)/1.2800 (21- EMA). Against the euro, the pound traded 0.1 percent up at 83.96 pence, having hit a 3-week high of 83.82 earlier.
USD/CHF: The Swiss franc edged up, retreating from a 1-month low touched in the previous session, as global geopolitical tensions boosted safe-haven assets. The major traded 0.06 percent down at 1.0068, having touched a high of 1.0090 on Tuesday, its strongest since Apr. 18. FxWirePro's Hourly Swiss Franc Strength Index stood at -119.43 (Highly Bearish) by 1000 GMT. The decline from 1.0170 has come to end as the pair trades above 1.0107 and a further jump till 1.0255/1.03435 is possible. On the lower side, major support is around 1.00340 (23.6% retracement of 0.9855 and 1.00904) and any break below will drag it till 1.000/0.9950.
AUD/USD: The Australian dollar rose, reversing most of its previous session losses, supported by upbeat Chinese CPI figures combined with higher oil prices. The Aussie trades 0.5 percent higher at 0.7379, rebounding from a low of 0.7328 hit on Tuesday, it’s weakest since Jan. 1. FxWirePro's Hourly Aussie Strength Index stood at -25.88 (Neutral) by 1000 GMT. On the lower side, near term support is around 0.7300 and any close below will drag the pair till 0.7200/0.71599. The near term resistance is around 0.7440 (support turned into resistance) and any break above targets 0.7517 (21- EMA)/0.7552 (200 day MA).
Equities Recap
European shares slipped from 21-month highs, as disappointing results weighed on individual stocks, while the dollar fell on concerns that Trump's dismissal of his FBI chief could make passage of his tax reform plans difficult.
The pan-European STOXX 600 index fell 0.05 percent to 395.63 points, while the FTSEurofirst 300 index declined 0.03 percent to 1,553.61 points.
Britain's FTSE 100 trades 0.2 percent up at 7,359.10 points, while mid-cap FTSE 250 gained 0.2 percent to 19,856.67 points.
Germany's DAX eased 0.1 percent at 12,747.03 points; France's CAC 40 trades 0.1 percent lower at 5,393.56 points.
Tokyo's Nikkei gained 0.29 percent to 19,900.09 points, Australia's S&P/ASX 200 index rose 0.57 percent to 5,873.40 points. South Korea's KOSPI lost 0.99 percent to 2,270.12 points.
Shanghai composite index fell 0.9 percent to 3,052.78 points, while CSI300 index plunged 0.4 percent to 3,337.70 points. Hong Kong’s Hang Seng added 0.5 percent to 25,015.42 points.
Commodities Recap
Crude oil prices rose, regaining some of its previous session losses after a larger than expected fall in U.S. crude inventories boosted market sentiment. International benchmark Brent crude was trading 0.3 percent up at $49.14 per barrel by 1007 GMT, having hit a low of $46.63 last week, its weakest since Nov. 29. U.S. West Texas Intermediate gained 0.4 percent at $46.34 a barrel, after declining as low as $43.73 on Friday, its lowest since Nov. 15.
Gold prices rebounded from an eight-week low touched in the previous session as U.S. President Trump's abrupt firing of FBI chief James Comey triggered a fresh bout of risk aversion. Spot gold was up 0.3 percent at $1,223.01 an ounce at 1010 GMT, having hit a low of $1,214.13 the day before, its lowest since Mar 15. U.S. gold futures for June delivery were up $7.20 an ounce at $1,223.30.
Treasuries Recap
The U.S. Treasuries gained ahead of the country’s 10-year note auction, scheduled to be held later in the day. The yield on the benchmark 10-year Treasury plunged 3 basis points to 2.38 percent, the super-long 30-year bond yields also slumped nearly 3 basis points to 3.01 percent while the yield on short-term 2-year note traded 2 basis point lower at 1.33 percent.
The UK gilts gained as investors wait to watch the Bank of England’s (BoE) monetary policy meeting, scheduled to be held on May 11. The yield on the benchmark 10-year gilts, slumped 1-1/2 basis points to 1.18 percent, the super-long 30-year bond yields plunged 2-1/2 basis points to 1.82 percent and the yield on the short-term 4-year traded 1/2 basis point lower at 0.34 percent.
The German bunds bounced as investors are closely eyeing the country’s first-quarter gross domestic product (GDP) and consumer price inflation (CPI) for the month of April, scheduled to be released on May 12. The yield on the benchmark 10-year bond slumped nearly 1-1/2 basis points to 0.41 percent, the long-term 30-year bond yields plunged nearly 2 basis points to 1.21 percent and the yield on the short-term 2-year bond traded nearly 1/2 basis point lower at -0.67 percent.
The New Zealand bonds ended the session on a higher note as investors wait to watch the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, scheduled to be unveiled on May 11. At the time of closing, the yield on the benchmark 10-year bond, fell 1 basis point to 3.09 percent, the yield on 7-year note also slipped 1 basis point to 2.78 percent and the yield on the short-term 2-year note too 1 basis point lower at 2.11 percent.
The Australian government bonds sharp rebounded tracking U.S. Treasuries. However, gains in equities amid a neutral Federal Budget for FY2017-18 limited gains in the debt market. The yield on the benchmark 10-year Treasury note, fell 1 basis point to 2.68 percent, the yield on 15-year note slumped 1-1/2 basis points to 3.08 percent and the yield on short-term 2-year also traded nearly 1-1/2 basis points lower at 1.71 percent.
