Market Roundup
• US ISM-New York Index 738, 735.1 –previous.
• US ISM-ISM NY Biz conditions 55.8, 56.5 -previous.
• US Total vehicle sales 17.20 mln forecast, 16.62 mln -previous.
• The Fed is expected to hold interest rates steady at its Wednesday meeting as it pauses to parse more economic data.
• Trump says "our country needs a good "shutdown" in September to fix mess" –tweet.
• Putin, Trump agreed to work together for diplomatic progress on North Korea - Interfax cites Kremlin.
• Trump China nominee Branstad says he does think that China has manipulated its currency in the past.
• The US bombers conducted "a nuclear bomb dropping drill against major objects" in its territory – N. Korea.
• Macron seen beating Le Pen in French presidential runoff vote by 59.5 pct to 40.5 pct - Ifop Fiducial poll.
• Le Pen says convinced there would not be a run on banks during negotiations with EU.
• Le Pen says capital controls an option during Frexit talks if she wins election.
• GDT price index rises 3.6% with an Avg selling price of NZD 3,166 per tonne –Global dairy trade
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand HLFS Unemployment rate 5.2 % forecast, 5.2% -previous
• 22:45 New Zealand Labour cost index YY* 1.7 % forecast 1.6% -previous
• 23:30 Australia AIG services index 51.7 -previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.0855 levels and currently trading at 1.0923 levels. The pair has made session high at 1.0929 and hit lows at 1.0884 levels. Euro inched higher against the dollar on Tuesday after data showed US auto sales raised concerns about the strength of consumer spending, and as investors await the Federal Reserve’s two-day meeting on Wednesday. Major automakers on Tuesday posted declines in new vehicle sales for April. The declines in U.S. new vehicle sales followed data on Monday showing weak U.S. factory activity and inflation and last week's release of U.S. first-quarter gross domestic product growth, which showed the weakest performance in three years. The Fed is expected to keep interest rates steady when it announces its policy decision on Wednesday, after hiking rates in March, but investors are waiting to see if the central bank addresses recent weakness and whether it indicates that a new increase is likely at its June meeting. Investors were also looking for details on how and when the Fed may begin reducing the size of its bond holdings. Friday’s employment report for April is also keenly awaited for signs of whether jobs growth is strong enough to encourage the Fed to raise rates again in the near-term. The euro was last up 0.3 percent against the dollar at $1.0925 after trading negative against the dollar earlier in the session.
GBP/USD is supported in the range of 1.2840 levels and currently trading at 1.2928 levels. It reached session high at 1.2931 and dropped to session low at 1.2901 levels. Britain's pound gained against the dollar on Tuesday as sterling was boosted by upbeat UK manufacturing growth, which rose to a three-year high in April, adding to signs that factories are enjoying at least a temporary boost from the pound's recent weakness. A monthly purchasing managers' index (PMI) survey for the manufacturing sector rose to 57.3 from 54.2 in March, exceeding all forecasts of economists, which had pointed to a slight decline to 54.0. Sterling hit the day's high of $1.2938, up from $1.2888 beforehand, before slightly retreating back to trade around $1.2935 in the late US session. The pound is now down less than 14 percent against the dollar since last June's referendum on European Union membership, having fallen as much as 23.5 percent to a 31-year low of $1.1491 in October. Sterling jumped as much as 4 U.S. cents last week when Prime Minister Theresa May called a snap election for June 8, with traders betting that if the ruling Conservatives can get a much bigger majority than their current 17, which is widely predicted in the polls, that will bring political stability.
USD/CAD is supported at 1.3690 levels and is trading at 1.3709 levels. It has made session high at 1.3756 and lows at 1.3698 levels. The Canadian dollar weakened against its U.S. counterpart on Tuesday as Canadian dollar was pressured by a drop in the price of oil, one of Canada's major exports. Brent crude oil prices fell to their lowest level in over five months, erasing all of the gains since the Organization of the Petroleum Exporting Countries agreed to cut production at the end of November, while U.S. crude oil futures settled 2.4 percent lower at $47.66 a barrel. The pullback in oil prices below $50 a barrel, domestic mortgage market concerns and an uncertain outlook for the North American Free Trade agreement have also weighed on the loonie recently, while the market is also bracing for a Federal Reserve interest rate decision on Wednesday. The Canadian dollar was trading at C$1.3709 to the greenback, or 72.91 U.S. cents, weaker than Monday's close of C$1.3681, or 73.09 U.S. cents. On the data front, Canada’s trade report for March is due on Thursday, and the April employment report is due on Friday.
AUD/USD is supported around 0.7473 levels and currently trading at 0.7527 levels. It hit session high at 0.7531 and made session lows at 0.7509 levels. The Australian dollar edged higher against US dollar on Tuesday as the greenback weakened and investors awaited Federal Reserve’s two-day meeting on Wednesday. Australia’s central bank held rates steady for a ninth straight month on Tuesday in a widely expected decision as it balances the risk of rising household debt against subdued inflation and wages growth. The Reserve Bank of Australia (RBA) kept rates at a record low 1.5 percent, following easings in August and May last year. The RBA sounded optimistic about the economy but retained its concerns about a "mixed" labour market. It added a new line in its statement, warning wages growth was expected to remain slow "for a while yet”. The Australian dollar rose to $0.7534, from $0.7510 in the US session, away from a trough of $0.7452 touched on Monday. Resistance was seen around $0.7566 and support at $0.7473.The Reserve Bank of Australia (RBA) kept rates at a record low of 1.5 percent following two easings last year. The dollar index, which measures the greenback against a basket of six major rivals, was last down 0.1 percent at 98.982.
Equities Recap
European shares kicked off the first trading day of May with gains underpinned by healthy corporate earnings, and manufacturing data added to evidence of a robust underlying economy in the region.
UK's benchmark FTSE 100 closed up by 0.6 percent, FTSEurofirst 300 ended the day up by 0.61 percent, Germany's Dax ended up by 0.5 percent, and France’s CAC finished the day up by 0.7 percent.
Wall Street edged higher on Tuesday as gains for the tech and industrial sectors countered weakness in auto and energy stocks and investors digested a heavy day of earnings reports.
Dow Jones closed up by 0.17 percent, S&P 500 ended up 0.12 percent, Nasdaq finished the day up by 0.06 percent.
Treasuries Recap
U.S. Treasury prices gained on Tuesday after weak auto sales raised concerns about the strength of consumer spending, and as investors awaited the conclusion of the Federal Reserve’s two-day meeting on Wednesday.
Benchmark 10-year notes gained 9/32 in price to yield 2.30 percent, down from 2.33 percent late on Monday.
Commodities Recap
Brent crude oil prices fell on Tuesday to its lowest level in over five months, erasing all of the gains since OPEC agreed to cut production at the end of November, after breaking through a key technical support level.
Brent futures fell $1.06, or 2.1 percent, to settle at $50.46 a barrel, the lowest close since Nov. 29 - the day before OPEC agreed to cut supply.
U.S. West Texas Intermediate crude fell $1.18, or 2.4 percent, to $47.66 a barrel, its lowest close since March 21.
Gold prices fell to a three-week low on Tuesday, as demand for riskier assets drove stocks higher and the dollar hit a six-week peak against the yen.
Spot gold was down 0.1 percent at $1,255.43 an ounce by 2:28 p.m. EDT (1828 GMT), having earlier hit $1,251.37, the lowest since April 10 and around the 200-day moving average.U.S. gold futures settled up 0.1 percent.
