Market Roundup
• Canada Apr Exports 64.31B,61.76B forecast,63.63B previous
•US Imports 339.70, B351.50B previous
•US Apr Trade Balance-87.10B,-89.50B forecast,-109.80B previous
•Canada Apr Trade Balance 1.50B,2.90B forecast,2.49B previous
•Canada Apr Imports 62.81B,58.11B forecast,61.14B previous
•French 12-Month BTF Auction 0.239% , 0.092% previous
•French 3-Month BTF Auction-0.555%, -0.561% previous
•French 6-Month BTF Auction -0.295%,-0.432% previous
•Canada May Ivey PMI 66.7,66.3 previous
•Canada May Ivey PMI n.s.a 72.0, 68.0 previous
Looking Ahead Economic Data
•23:50 Japan GDP Capital Expenditure (QoQ) (Q1) 0.3% forecast,0.5% previous
•23:50 Japan GDP (QoQ) (Q1) -0.3% forecast,-0.2% previous
•23:50 Japan GDP (YoY) (Q1)-1.0% forecast,-1.0% previous
•23:50 Japan Apr Current Account n.s.a. 0.511T forecast,2.549T previous
•01:30 Australia May NAB Business Confidence 10 previous
Currency Summaries
EUR/USD: The euro declined against stronger dollar on Tuesday as Wall Street stocks erased initial declines amid growing hopes that inflation may have peaked. Investors will get a look at the latest inflation reading on Friday in the form of the May consumer price index.The dollar index fell 0.176% to 102.270, with the euro up 0.14% to $1.0709.After touching a near 20-year high of 105.01 on May 13, the dollar index has eased back to around the 102 level, although Friday's strong payrolls report helped the greenback notch its first weekly gain in three. Immediate resistance can be seen at 1.0711(5DMA), an upside break can trigger rise towards 1.0741 (23.6%fib), On the downside, immediate support is seen at 1.0662(38.2%fib), a break below could take the pair towards 1.0604(50%fib).
GBP/USD: Sterling rebounded sharply after initially falling on Tuesday as fresh political headwinds for embattled British Prime Minister Boris Johnson unnerved investors. Johnson, who scored a sweeping election victory in 2019, has been under increasing pressure after he and staff held alcohol-fuelled parties in his Downing Street office and residence when Britain was under lockdowns to tackle the COVID-19 pandemic. Johnson won the confidence vote 211 to 148, but his 59% share of the vote was less than the 63% achieved by his predecessor Theresa May in her confidence vote of December 2018 who was replaced seven months later . Sterling was last trading at $1.2592, up 0.49% on the day. Immediate resistance can be seen at 1.2635(23.6%fib),an upside break can trigger rise towards 1.2674 (27thMay high).On the downside, immediate support is seen at 1.2557 (38.2%fib), a break below could take the pair towards 1.2475(50%fib).
USD/CAD: The Canadian dollar strengthened to its highest level in nearly seven weeks against the greenback on Tuesday as oil prices rose and Canadian bond yields climbed further above their U.S. counterparts. The loonie was trading 0.4% higher at 1.2530 per U.S. dollar, after touching its strongest since April 21 at 1.2525. U.S. crude oil futures settled 0.8% higher at $119.41 a barrel, supported by supply concerns and the prospect of higher demand as China relaxes lockdowns set to control the coronavirus pandemic. Oil is one of Canada's major exports. Immediate resistance can be seen at 1.2560 (5 DMA), an upside break can trigger rise towards 1.2590 (38.2%fib).On the downside, immediate support is seen at 1.2519 (23.6%fib), a break below could take the pair towards 1.2403 (Lower BB).
USD/JPY: The dollar strengthened on Tuesday as the policy paths of Fed and BoJ central banks diverge. On Tuesday, Bank of Japan Governor Haruhiko Kuroda repeated his view that a weak yen benefited the economy if its moves were not too sharp, a comment that followed the currency's fall to a fresh two-decade low. The Japanese yen weakened 0.55% versus the greenback at 132.59 per dollar. Investors will get a look at the latest inflation reading on Friday in the form of the May consumer price index. Strong resistance can be seen at 132.92 (23.6%fib), an upside break can trigger rise towards 133.58(Higher BB).On the downside, immediate support is seen at 131.61 (5DMA), a break below could take the pair towards 130.67(38.2%fib).
Equities Recap
European shares fell on Tuesday as investors worried about the squeeze to economic growth from aggressive monetary policy tightening by central banks in a bid to tame rising inflation, while retail stocks declined after U.S. retailer Target's gloomy warning.
UK's benchmark FTSE 100 closed down by 0.12 percent, Germany's Dax ended up by 0.66 percent, France’s CAC finished the day down by 0.75 percent.
U.S. stocks rallied late on Tuesday to end higher for a second straight day as technology and energy shares gained, while Target Corp's warning about excess inventory weighed on retail stocks for much of the session.
Dow Jones closed down by 0.45% percent, S&P 500 closed up by 0.01% percent, Nasdaq settled up by 0.78% percent.
Treasuries Recap
U.S. Treasuries yields tumbled on Tuesday after Target Corp. warned on excess inventory and said it would cut prices, boosting bets that the worst of inflation increases may be in the past.
Yields hit a 3-1/2-week high overnight on concerns that the Federal Reserve will continue to aggressively hike rates as it battles persistently high inflation that is rising at its fastest pace in 40 years.
Commodities Recap
Gold prices rose on Tuesday after mounting inflation concerns boosted safe-haven bids for the precious metal and as a decline in U.S. Treasury yields added support.
Spot gold rose 0.6% to $1,851.63 per ounce by 10:47 a.m. EDT (1447 GMT), after hitting a one-week low of $1,836.10 earlier in the session.U.S. gold futures rose 0.6% to $1,854.00.
Oil prices gained about 1% on Tuesday, with U.S. crude settling at a 13-week high on supply concerns, including no nuclear deal with Iran, and prospects for demand growth in China, which is relaxing lockdowns to control the pandemic.
Brent futures gained $1.06, or 0.9%, to settle at $120.57 a barrel, its highest since May 31. U.S. West Texas Intermediate (WTI) crude gained 91 cents, or 0.8%, to $119.41, its highest settlement since March 8 which matched an August 2008 settlement high.
