Market Roundup
•Canada Apr Wholesale Sales (MoM) 2.8% , -1.1% previous
•French 3-Month BTF Auction 3.697%, 3.746% previous
•Belgium May NBB Business Climate -11.0,-10.8 forecast,-11.9 previous
•French 6-Months BTF Auction 3.657%,3.657% previous
•French 12-Month BTF Auction 3.503%,3.467% previous
Looking Ahead Economic Data(GMT)
•23:50 Japan Corporate Services Price Index (CSPI) (YoY) 2.3% forecast,2.3% previous
•01:30 Australia April Retail Sales (MoM) 0.3% forecast,-0.4% previous
•05:00 Japan BoJ Core CPI (YoY) 2.2% forecast, 2.2% previous
Looking Ahead Events And Other Release(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro strengthened on Monday despite data showing German business confidence worsened in May. German business morale stagnated in May, a survey showed on Monday, falling short of a forecast improvement and suggesting the recovery of Germany's economy this year will be slow progress.The Ifo institute said its business climate index remained constant in May at 89.3, compared with a reading of 90.4 forecast by analysts. German inflation data on Wednesday and euro zone readings on Friday will be watched for confirmation of a European rate cut that traders have pencilled in for next week. Meanwhile, ECB chief economist Philip Lane told the Financial Times the monetary policy must continue to be restrictive this year as wage growth will not normalise until 2026. Immediate resistance can be seen at 1.0879(23.6%fib), an upside break can trigger rise towards 1.0917(Higher BB).On the downside, immediate support is seen at 1.0800 (38.2% fib), a break below could take the pair towards 1.0738(50% fib).
GBP/USD: The sterling strengthened on Monday as greenback dipped ahead of key US and euro zone inflation data Trading was light in absence of U.S. and UK participants as markets there were shut for a public holiday. Spotlight this week would be on a reading of May consumer prices for the euro zone due on Friday, while individual inflation readings from Germany, Spain and France will also be released throughout the week. The ECB looks set to start easing interest rates in its upcoming meeting next week, with bets showing an over 90% probability of a rate cutups. US inflation data, also due on Friday, could help traders assess the timing and numbers of possible rate cuts by the Federal Reserve this year. Immediate resistance can be seen at 1.2778(23.6%fib), an upside break can trigger rise towards 1.2820(Higher BB).On the downside, immediate support is seen at 1.2722(38.2% fib), a break below could take the pair towards 1.2674(50% fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Monday as commodity prices gained, while investors remained cautious ahead of this week's inflation data for clues on the timeline of interest rate cuts. The reading remains crucial ahead of Bank of Canada's June 5 monetary policy meeting, as probability of the central bank initiating an interest rate cut improved to 61%. U.S. inflation data, also due on Friday, could help traders assess the timing and number of possible rate cuts by the Federal Reserve this year.Meanwhile, Canadian wholesale trade most likely rose 2.8% in April from March, largely driven by higher sales in the motor vehicle and motor vehicle parts and accessories subsector, Statistics Canada said in a flash estimate .Immediate resistance can be seen at 1.3663 (38.2% fib), an upside break can trigger rise towards 1.3762 (23.6% fib).On the downside, immediate support is seen at 1.3622(50% fib), a break below could take the pair towards 1.3571(61.8% fib).
USD/JPY: The U.S. dollar eased against yen on Monday as investors assessed diminishing bets of U.S. interest rate cuts ahead of a key inflation report due later in the week.The yen may seal its first monthly gain of the year this month thanks to suspected intervention from Japanese authorities towards the end of April and at the start of May, but it has been slipping back since then.It was steady at 156.88 to the dollar on Monday but has won little support from rising Japanese government bond yields at the 10-year tenor, for example, they remain nearly 350 basis points below U.S. yields.Tokyo CPI data, due on Friday, is a reliable guide to the national trend and will be closely watched. Finance ministry data on Friday will also reveal the size of Japan's intervention. Strong resistance can be seen at 157.44(23.6%fib), an upside break can trigger rise towards 157.96(23.6%fib).On the downside, immediate support is seen at 155.76(38.2% fib), a break below could take the pair towards 154.54(50% fib).
Equities Recap
European stocks closed slightly higher on Monday and government bond yields eased, amidst hints of upcoming interest rate cuts by the European Central Bank (ECB), though trading activity was light as some key global markets were shut.
UK's benchmark FTSE 100 closed down by 0.26 percent, Germany's Dax ended up by 0.37 percent, France’s CAC finished the day up by 0.46 percent.
Commodities Recap
Gold prices rose on Monday, as investors assessed diminishing bets of U.S. interest rate cuts ahead of a key inflation report due later in the week.
Spot gold was up 0.74% to $2,351.37 per ounce as of 2136 GMT, having touched its lowest since May 9 at $2,325.19 on Friday. U.S. gold futures also climbed 0.77% to $2,352.05.
Oil prices rose over 1% in muted trade owing to public holidays in Britain and the United States after a downbeat week characterised by the outlook for U.S. interest rates in the face of sticky inflation.
The Brent crude July contract settled $1, or 1.2% higher at $83.12 a barrel. The more active August contract rose $1.04 to $82.88.
U.S. West Texas Intermediate (WTI) crude futures were up 93 cents at $78.65.
