Market Roundup
•Canada Apr Core CPI (YoY) 1.6%, 2.0% previous
•Canada Apr CPI (MoM) 0.5%,0.5% forecast, 0.6% previous
•Canada Apr Median CPI (YoY) 2.6%,2.7% forecast,2.8% previous
•Canada Apr Trimmed CPI (YoY) 2.9%2.9% forecast,3.1% previous
•Canada Apr CPI (YoY) 2.7%,2.7% forecast,2.9% previous
•Canada Apr Common CPI (YoY) 2.6%,2.8% forecast,2.9% previous
•Canada Apr Core CPI (MoM) 0.2%,0.5% previous
•French 12-Month BTF Auction 3.467% ,3.481% previous
• French 3-Month BTF Auction3.746%,3.781% previous
• French 6-Month BTF Auction 3.657%, 3.670% previous
Looking Ahead Economic Data(GMT)
•23:50 Japan Apr Imports (YoY) 9.0% forecast,-4.9% previous
•23:50 Japan Apr Trade Balance -339.5B forecast,366.5B previous
•23:50 Japan Apr Exports (YoY) 11.1% forecast,7.3% previous
•23:50 Japan Apr Adjusted Trade Balance-0.72T forecast,-0.70T previous
•02:00 New Zealand RBNZ Interest Rate Decision 5.50% forecast,5.50% previous
Looking Ahead Events And Other Releases(GMT)
•02:00 New Zealand RBNZ Monetary Policy Statement
•02:00 New Zealand RBNZ Rate Statement
•03:00 New Zealand RBNZ Press Conference
Currency Summaries
EUR/USD: The euro eased against dollar on Tuesday as investors awaited Thursday's data from the European Central Bank (ECB) negotiated wage tracker and the euro zone Purchasing Managers' Index (PMI) which could provide further clues about the monetary cycle in the euro area. Traders have anticipated cuts worth 65 bps from the European Central Bank , with the first cut from the ECB seen in June. The current account balance posted a surplus of EUR 36 billion in March compared to a EUR 29 billion surplus in February. In the same period last year, the balance was in EUR 13 billion surplus.German producer prices decreased 3.3 percent on a yearly basis in April, faster than the 2.9 percent fall in March, data from Destatis revealed. Immediate resistance can be seen at 1.0894(23.6%fib), an upside break can trigger rise towards 1.0914(Higher BB).On the downside, immediate support is seen at 1.0830 (38.2% fib), a break below could take the pair towards 1.0756(50% fib).
GBP/USD: The pound was within striking distance of its 2-month high versus the dollar on Tuesday ahead of key economic data.Closely-watched consumer price inflation data is due on Wednesday and "flash" PMI data on British business activity will follow the next day. BoE Governor Andrew Bailey said on May 9 that future cuts might need to be more than those markets priced in, but the next day Pill said that betting too heavily on a rate cut at its June rate meeting would be a bad idea.Policymaker Megan Greene said last week the BoE should wait for more conclusive evidence that inflation pressures are becoming less stubborn before it moves to cut rates.Sterling rose 0.1% to $1.2715; it hit $1.2725 the day before, its highest level since March 21. Immediate resistance can be seen at 1.2731(23.6%fib), an upside break can trigger rise towards 1.2760(Higher BB).On the downside, immediate support is seen at 1.2665(38.2% fib), a break below could take the pair towards 1.2600(50% fib).
USD/CAD Canadian dollar strengthened against its U.S. counterpart on Tuesday as commodity-linked loonie climbed after domestic inflation data raised prospects of the Bank of Canada beginning an interest rate cutting campaign next month. Canada's annual inflation rate slowed to a three-year low of 2.7% in April and core measures continued to ease, data showed on Tuesday, prompting money markets to see an increased chance of an interest rate cut in June.Analysts polled had forecast inflation to cool to 2.7% from 2.9% in March. Month on month, the consumer price index rose 0.5% in April, also less than a forecast of a 0.6% gain. After the data's release, money markets increased their bets for a rate cut on June 5 to almost 55% from 39% earlier.The Canadian dollar strengthened 0.11% to 1.3639 against the U.S. dollar. Immediate resistance can be seen at 1.3685 (23.6%fib), an upside break can trigger rise towards 1.3750 (Higher BB).On the downside, immediate support is seen at 1.3609(38.2%fib), a break below could take the pair towards 1.3586(50%fib).
USD/JPY: The U.S. dollar eased slightly against yen on Tuesday as Federal Reserve policymakers said it is prudent for the U.S. central bank to wait several more months to ensure that inflation really is back on a path to the 2% target before commencing interest rate cuts.Against other currencies, the greenback was mostly flat ahead of the U.S. Memorial Day holiday next week. Atlanta Fed Chair Raphael Bostic also spoke on Tuesday and warned against cutting rates too quickly. The Fed, he said, needs to be cautious about approving its first rate cut to be sure it does not touch off pent-up spending among businesses and households, and put the central bank in a position where inflation starts "bouncing around. Strong resistance can be seen at 156.58 (23.6%fib), an upside break can trigger rise towards 157.92(Higher BB).On the downside, immediate support is seen at 155.25(38.2% fib), a break below could take the pair towards 153.91(50% fib).
Equities Recap
European stocks closed slightly lower on Tuesday, their third out of four sessions in the red, as caution around interest rate reductions dominated, with investors waiting for economic data due later in the week.
UK's benchmark FTSE 100 closed down by 0.09 percent, Germany's Dax ended down by 0.23 percent, France’s CAC finished the day down by 0.67 percent.
U.S. stocks closed with slight gains on Tuesday, sending the S&P 500 and Nasdaq to record levels, as investors assessed the latest comments from Federal Reserve officials for clues on the timing of a rate cut while quarterly earnings from Nvidia drew closer.
Dow Jones closed up by 0.17 %percent, S&P 500 closed up by 0.25% percent, Nasdaq settled up by 0.22 % percent.
Commodities Recap
Gold prices cooled near a record peak hit in the previous session on Tuesday as the dollar held ground, but stayed afloat at the $2,400 level on support from safe-haven interest and prospects of U.S. interest rates easing this year.
Spot gold fell 0.2% to $2,420.49 per ounce by 1756 GMT, as the U.S. dollar index (.DXY), opens new tab edged up, making bullion more expensive for other currency holders.U.S. gold futures settled 0.5% lower to $2,425.90.
Oil prices settled 1% lower on Tuesday as lingering U.S. inflation looked likely to keep interest rates higher for longer, weighing on fuel demand.
Brent crude futures settled down 83 cents, or 1%, to $82.88 a barrel. U.S. West Texas Intermediate crude (WTI) futures for June , which expired on Tuesday, slipped by 54 cents, or 0.7%, to $79.26.
The more active July contract settled down 64 cents, at $78.66.
