Market Roundup
•US Employment Wages (QoQ) (Q1) 1.10%, 0.90% previous
•US Employment Cost Index (QoQ) (Q1)1.2%,1.0% forecast,0.9% previous
•Canada Feb GDP (MoM) 0.2%, 0.3% forecast,0.6% previous
•Canada Mar GDP (MoM) 0.0% ,0.2% previous
•US Redbook (YoY) 5.5%, 5.3% previous
•US Feb S&P/CS HPI Composite - 20 n.s.a. (MoM) 0.9% , -0.1% previous
•US Feb S&P/CS HPI Composite - 20 n.s.a. (YoY) 7.3%,6.7% forecast,6.6% previous
•US Feb House Price Index (MoM) 1.2%,0.1% forecast, 0.1% previous
•US Feb House Price Index (YoY) 7.0%,6.3% previous
•US Feb S&P/CS HPI Composite - 20 s.a. (MoM) 0.6%, 0.1% previous
•US Feb House Price Index 423.0,417.5 previous
•US Apr Chicago PMI 37.9,44.9 forecast,41.4 previous
•US Apr CB Consumer Confidence 97.0, 104.0 forecast,104.7 previous
•US Apr Dallas Fed Services Revenues 0.3,4.0 previous
•US Apr Texas Services Sector Outlook -10.6 ,-5.5 previous
Looking Ahead Economic Data(GMT)
•No data Ahead
Looking Ahead Evenst And Other Releases(GMT)
• No Events Ahead
Currency Forecast
EUR/USD: The euro declined on Tuesday after the U.S. Labor Department reported hotter-than-expected first-quarter employment cost growth, which is unlikely to alter the Fed's restrictive stance. Data showed on Tuesday that U.S. labor costs rose by a more-than-expected 1.2% last quarter, indicating an uptick in wage pressures. A survey also found that U.S. consumer confidence worsened in April, dropping to its lowest level in more than 1-1/2 years. The reports came a day before the Federal Reserve Open Market Committee (FOMC) ends its two-day meeting, with investors widely expecting the central bank to leave interest rates unchanged. Immediate resistance can be seen at 1.0695(38.2% fib), an upside break can trigger rise towards 1.0753(61.8% fib).On the downside, immediate support is seen at 1.0627(23.6% fib), a break below could take the pair towards 1.0600(Psychological level).
GBP/USD: The pound eased on Tuesday as dollar gained ground after data showed US labor costs accelerates in first quarter.U.S. labor costs increased more than expected in the first quarter amid a rise in wages and benefits, confirming the surge in inflation early in the year that will likely delay a much- anticipated interest rate cut later this year. The Employment Cost Index (ECI), the broadest measure of labor costs, increased 1.2% last quarter after rising by 0.9% in the fourth quarter, the Labor Department's Bureau of Labor Statistics said. Federal Reserve officials started a two-day policy meeting on Tuesday. The U.S. central bank is expected to leave its benchmark overnight interest rate unchanged in the current 5.25%-5.50% range, where it has been since July. Immediate resistance can be seen at 1.2561 (Daily high), an upside break can trigger rise towards 1.2595(23.6 % fib).On the downside, immediate support is seen at 1.2488 (Daily low), a break below could take the pair towards 1.2445 (50 % fib).
USD/CAD The Canadian dollar weakened against its U.S. counterpart on Tuesday weaker domestic economic data and stronger dollar weighed on loonie. Canada's economy likely weakened in the first quarter, data from Statistics Canada showed on Tuesday, bolstering expectations that the Canadian central bank would have more reason to cut interest rates in June.Canada's gross domestic product (GDP) rose 0.2% in February, less than analysts' estimates, while growth in March likely remained muted, Statistics Canada said. The Canadian dollar slightly weakened after the GDP data, with the local currency trading 0.51% lower at C$1.3730 per dollar, or 72.89 U.S. cents. The yield on the two-year Canadian government bond rose 2.7 basis points to 4.427% .Immediate resistance can be seen at 1.3791 (23.6 % fib), an upside break can trigger rise towards 1.3836 (Higher BB).On the downside, immediate support is seen at 1.3726 (38.2 % fib), a break below could take the pair towards 1.3665 (50 % fib).
USD/JPY: The U.S. dollar strengthened on Tuesday as yen gave up some of its sharp gains the previous day sparked by suspected intervention by Japanese authorities. The currency was down 0.35% to 156.90 per dollar, but off its 34-year low of 160.245 hit on Monday when traders say yen-buying intervention by Tokyo drove a eye-catching rebound of nearly six yen.It briefly dropped earlier in the session and stayed for a couple of minutes at 156.50, before recovering to 157.Japanese officials may have spent some 5.5 trillion yen ($35.05 billion) supporting the currency on Monday, Bank of Japan data suggested on Tuesday. Japanese officials may have spent some 5.5 trillion yen ($35.05 billion) supporting the currency on Monday, Bank of Japan data suggested on Tuesday. Strong resistance can be seen at 158.39 (23.6%fib), an upside break can trigger rise towards 160.30(Daily high).On the downside, immediate support is seen at 156.00 (Daily low), a break below could take the pair towards 154.63 (50% fib).
Equities Recap
European stocks ended lower as a raft of bleak earnings dampened investor sentiment due to upbeat economic data and the increased likelihood that the European Central Bank could cut interest rates in June.
UK's benchmark FTSE 100 closed down by 0.04 percent, Germany's Dax ended down by 1.08 percent, France’s CAC finished the day down by 0.99 percent.
U.S. stocks ended lower on Tuesday as markets weighed economic data showing rising labor costs and deteriorating consumer confidence on the day of a key Federal Reserve policy meeting to decide the direction of interest rates.
Dow Jones closed down by 1.49% percent, S&P 500 closed down by 1.57% percent, Nasdaq settled down by 2.04% percent.
Treasuries Recap
U.S. Treasury yields rose after the hotter-than-expected employment costs report as investors awaited the Fed decision.
Benchmark 10-year notes fell 19/32 in price to yield 4.6902%, from 4.612% late on Monday.
The 30-year bond fell 28/32 in price to yield 4.7945%, from 4.737% late on Monday.
Commodities Recap
Gold prices tumbled to a one-week low ahead of the Fed meeting, but remained on course for their third consecutive monthly gain.Spot gold dropped 1.8% to $2,292.60 an ounce.
Crude prices dropped on easing geopolitical tensions as Israel-Hamas peace talks moved forward and U.S. data showed healthy crude output and exports.
U.S. crude dropped 0.85% to settle at $81.93 per barrel, while Brent settled at $87.86 per barrel, down 0.61% on the day.
