Market Roundup
• US Redbook (YoY) 6.0%,5.5% previous
•Canada Apr Ivey PMI 63.0, 58.1 forecast,57.5 previous
•Canada Apr Ivey PMI n.s.a 65.7, 63.0 previous
•US May IBD/TIPP Economic Optimism 41.8, 44.1 forecast,43.2 previous
•GlobalDairyTrade Price Index 1.8%, 0.1% previous
Looking Ahead Economic Data(GMT)
•03:35 Japan 10-Year JGB Auction
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro strengthened against dollar on Tuesday as euro was supported by as better-than-expected Eurozone retail sales and hopes of an ECB interest rate cut. Retail sales in the Eurozone showed their most significant monthly rise since September 2022, suggesting positive economic trends in consumer spending. Eurostat’s data, released on Tuesday, showed that retail sales in the euro area rose by 0.8% in March compared to the previous month. This recovery follows a revised 0.3% decrease in February and surpassed market predictions of a 0.6% increase. Immediate resistance can be seen at 1.0810(38.2% fib), an upside break can trigger rise towards 1.0888(23.650% fib).On the downside, immediate support is seen at 1.0751 (50% fib), a break below could take the pair towards 1.0723(April 2nd low).
GBP/USD: The British pound edged lower against the U.S. dollar on Tuesday before the Bank of England's policy announcement on Thursday as markets moved to fully price in two quarter-point rate cuts this year.A survey of economists polled by Reuters expects the BoE to keep interest rates unchanged when it announces its decision this week, but analysts expect the central bank to leave the door open to lower interest rates as early as June.Traders price in 53 basis points of easing this year, implying at least two quarter-point cuts, having previously fully priced only one after inflation data last month showed prices slowed by less than expected in March. The pound was last down 0.3% against the dollar at $1.2508. Immediate resistance can be seen at 1.2567 (38.2%fib), an upside break can trigger rise towards 1.2600(May 7th high).On the downside, immediate support is seen at 1.2501 (50% fib), a break below could take the pair towards 1.2445 ( 61.8% fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Tuesday as interest rate differentials continued to count against holding the currency and ahead of a key domestic employment report this week. Canada's employment report for April, due on Friday, could offer clues on the strength of the domestic economy. Economists expect a jobs gain of 18,000 and the unemployment rate to rise to 6.2% from 6.1% in March.Data on Tuesday showed Canadian purchasing activity rising at a faster pace in April, while the price of oil , one of Canada's major exports, settled 0.1% lower at $78.38 a barrel as easing supply concerns and signs of weakening demand countered fears of escalation in the Middle East.The loonie was trading 0.5% lower at 1.3735 per U.S. dollar, or 72.81 U.S. cents, after trading in a range of 1.3661 to 1.3741 .Immediate resistance can be seen at 1.3742(Daily high), an upside break can trigger rise towards 1.3763 (23.6%fib).On the downside, immediate support is seen at 1.3695(38.2% fib), a break below could take the pair towards 1.3644(50% fib).
USD/JPY: The greenback strengthened against the Japanese yen for a second straight session as expectations of large interest rate differentials continued, even after new warnings from Japanese officials about their willingness to prop up their currency.Japan's top currency diplomat Masato Kanda said the country may have to take action against any disorderly, speculative-driven foreign exchange moves, signaling the Bank of Japan remained ready to intervene in the market after two suspected interventions of possibly almost $60 billion last week. Against the Japanese yen , the dollar strengthened 0.55% to 154.73 after tumbling more than 3% last week, its biggest weekly percentage drop since early December 2022. Strong resistance can be seen at 154.68 (Daily high ), an upside break can trigger rise towards 155.55(23.6%fib).On the downside, immediate support is seen at 153.77(38.2% fib), a break below could take the pair towards 152.39(50% fib).
Equities Recap
European shares closed at record levels, buoyed by upbeat earnings from the financial sector as well as rate cut optimism.
UK's benchmark FTSE 100 closed up by 1.22 percent, Germany's Dax closed up by 1.45 percent, France’s CAC closed up by 0.99 percent.
Wall Street relinquished earlier gains on Tuesday, failing to follow their global counterparts higher as investors parsed the likelihood and timing of Federal Reserve rate cuts this year, while a weaker yen offset by a stronger euro pushed the dollar into positive territory.
(At GMT 20:50)Dow Jones was up by 0.08%percent, S&P 500 was up by 0.13% percent, Nasdaq was down by 0.10% percent.
Treasuries Recap
Treasury yields slipped as traders focused on absorbing $125 billion in new supply this week, while a parade of Federal Reserve officials is queued up to speak on prospects for a 2024 policy pivot.
Benchmark 10-year notes last rose 7/32 in price to yield 4.461%, from 4.489% late on Monday.
The 30-year bond last rose 18/32 in price to yield 4.6055%, from 4.642% late on Monday.
Commodities Recap
Gold slipped, giving up the previous session's gains as traders remained focused on the likelihood and timing of Fed rate cuts.
Spot gold dropped 0.4% to $2,314.22 an ounce.
Oil prices closed slightly lower on Tuesday on signs of easing supply concerns, while market participants shifted their focus to U.S. stockpiles data due later today and Wednesday.
Brent crude futures settled 17 cents lower at $83.16 a barrel, and U.S. West Texas Intermediate crude futures closed 10 cents lower at $78.38.
