Market Roundup
• Slowing inflation may lead Fed to cut interest rates -Kudlow
• US Mar Personal Income MM, 0.1%, 0.4% forecast, 0.2% previous
• US Mar Personal Consump Real MM, 0.7%, 0.0% previous
• US Mar Consumption, Adjusted MM, 0.9%, 0.7% forecast, 0.1% previous
• US Mar Core PCE Price Index MM, 0.0%, 0.1% forecast, 0.1% previous
• White House says still backs Moore for Fed, reviewing past remarks
• IMF's Lagarde expects U.S. and China to reach trade deal
• White House economic adviser Kudlow, asked if Trump will meet with China's Xi, says 'we'll see'
• Pompeo 'confident' China trade talks will not be hurt over Iran oil sanctions
• Mnuchin hopes latest talks may seal U.S.-China trade deal
Looking Ahead - Economic Data (GMT)
• 01:00 China Apr NBS Manufacturing PMI, 50.5 forecast, 50.5 previous
• 01:30 Australia Mar Housing Credit, 0.3% previous
• 01:30 Australia Mar Private Sector Credit, 0.3% previous
• 01:45 China Apr Caixin Mfg PMI Final, 51.0 forecast, 50.8 previous
Looking Ahead - Events, Other Releases (GMT)
• N/A U.S. Federal Reserve's FOMC commences its two-day meeting on interest rates (to May. 1) in Washington, D.C.
• 07:40 BoE Deputy Governor Dave Ramsden speaks at Innovate Finance Global Summit 2019 in London
• 15:00 BoC Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins testify to the House of Commons finance committee in Ottawa
Currency Summaries
EUR/USD: The euro strengthened against dollar on Tuesday, as dollar weakened as traders await more data to convince them whether to add to their bullish positions in the greenback. Most major currencies held in tight ranges on light trading volume as Japan began its extended Golden Week holiday. China will observe its Labor Day holiday from Wednesday to Friday. A Federal Reserve policy meeting, Brexit negotiations and a raft of global data including U.S. payrolls could each be the trigger for big currency swings this week. The euro was up 0.39 percent at $1.1182. Immediate resistance can be seen at 1.1204 (9 DMA), an upside break can trigger rise towards 1.1231 (21 DMA).On the downside, immediate support is seen at 1.1173 (50% retracement level), a break below could take the pair towards 1.1138 (38.2% retracement level).
GBP/USD: The pound strengthened against greenback on Monday, as traders pared greenback holdings before the Federal Reserve policy meeting. Markets will scrutinise the Fed's two-day policy meeting, which starts Tuesday, for its sense of how the economy is holding up amid a U.S.-China trade conflict. Sterling was last trading at $1.2931, up 0.16 percent on the day. An index that tracks the greenback against the euro, yen, sterling and three other currencies was down 0.20 % at 97.865. Last week, it reached 98.330, the highest since May 2017.Immediate resistance can be seen at 1.2960 (38.2% retracement level), an upside break can trigger rise towards 1.3041 (50% retracement level).On the downside, immediate support is seen at 1.2859 (23.6% retracement level), a break below could take the pair towards 1.2800 (Psychological level).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Monday, as investors were cautious ahead of key economic data and a Federal Reserve interest rate decision later in the week. The price of oil, one of Canada's major exports, extended a Friday decline that halted a weeks-long rally, after President Donald Trump demanded that producer club OPEC raise output to soften the impact of U.S. sanctions against Iran. The Canadian dollar was last trading 0.05% higher at 1.3445 to the greenback. Immediate resistance can be seen at 1.3480 (50% retracement level), an upside break can trigger rise towards 1.3523 (61.8% retracement level).On the downside, immediate support is seen at 1.3433 (61.8% retracement level), a break below could take the pair towards 1.3392 (March 28th low).
USD/JPY: The dollar declined against the Japanese yen on Monday, as dollar weakened on expectations that, the Federal Reserve will prove accommodative at a meeting this week. The Fed will begin its two-day policy meeting on Tuesday. The central bank last month abandoned any interest rate hikes this year. Analysts do not anticipate any major changes from Fed officials who signaled last month they would not raise interest rates in 2019.Strong resistance can be seen at 111.97 (38.2% retracement level), an upside break can trigger rise towards 112.38 (April 24th high).On the downside, immediate support is seen at 111.55 (50% retracement level), a break below could take the pair towards 111.09 (61.8% retracement level).
Equities Recap
European shares closed marginally higher on Monday led by gains for Banco Santander, as investors chose to focus on the positives of a weekend win for Prime Minister Pedro Sanchez's ruling socialists in Spain's third election in four years.
UK's benchmark FTSE 100 closed up by 0.17 percent, the pan-European FTSEurofirst 300 ended the day up by 0.05 percent, Germany's Dax ended up by 0.06 percent, France’s CAC finished the day up by 0.11 percent.
The S&P 500 set an intraday record high on Monday, bolstering the view that the decade-long bull market has further to run, after consumer spending rose in March and inflation data was benign.
Dow Jones closed up by 0.03 percent, S&P 500 ended up by 0.10 percent, Nasdaq finished the day up by 0.18 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday after data showed that U.S. consumer spending increased by the most in more than 9-1/2 years in March though price pressures remained muted.
Commodities Recap
Gold fell against dollar on Monday, as strong U.S. data improved investors' appetite for riskier assets ahead of the U.S. Federal Reserve policy meeting.
Spot gold fell 0.5 percent to $1,279.32 per ounce, while U.S. gold futures settled about 0.6 percent lower at $1,281.50 an ounce.
Oil prices edged higher on Monday, as the market attempted to resume a weeks-long rally that was halted on Friday when U.S. President Donald Trump demanded that producer club OPEC raise output to soften the impact of U.S. sanctions against Iran.
Brent crude futures fell 11 cents, or 0.2 percent, to settle at $72.04 a barrel while U.S. West Texas Intermediate (WTI) crude futures climbed 20 cents, or 0.3 percent, to end the session at $63.50.
