Market Roundup
• French 6-Month BTF Auction-0.638% ,-0.627% previous
• French 3-Month BTF Auction-0.636%, -0.630% previous
• French 12-Month BTF Auction-0.628% -0.619% previous
• US Apr CB Employment Trends Index 105.40, 102.40 previous
• US 6-Month Bill Auction 0.015%,0.035% previous
• US 3-Month Bill Auction 0.035%,0.015% previous
Looking Ahead - Economic Data (GMT)
•23:30 Japan March Household Spending (YoY) 1.5% forecast,-6.6% previous
•23:30 Japan March Household Spending (MoM) 2.1% forecast, 2.4% previous
•00:00 Australia HIA New Home Sales (MoM) 90.3% previous
•01:30 China Apr CPI (MoM -0.2% forecast,-0.5% previous
•01:30 China Apr PPI (YoY) 6.5% forecast,- 4.4% previous
•01:30 China Apr CPI (YoY) 1.0% forecast, 0.4% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency summaries
EUR/USD: The euro edged higher against dollar on Monday as investors returned their focus to a brighter economic outlook and its implications for central bank policy following large swings following Friday’s U.S. non-farm payrolls data.ECB policymaker Martin Kazaks said on Friday the central bank could decide to reduce the pace of its emergency bond purchases in June if borrowing costs remain low.But the road to recovery from the coronavirus pandemic will be long, ECB Chief Economist Philip Lane told French newspaper Le Monde in an interview published Monday, highlighting divisions within the ECB’s Governing Council. Immediate resistance can be seen at 1.2174 (23.6%fib), an upside break can trigger rise towards 1.2200(Psychological level).On the downside, immediate support is seen at 1.2123(38.2%fib), a break below could take the pair towards 1.2083 (50%fib).
GBP/USD: The pound rose above the $1.40 psychological level for the first time in more than two months on Monday, reaching as high as $1.4118 , despite a win for pro-independence parties in Scottish elections.Pro-independence parties won a majority in Scotland’s parliament on Saturday, paving the way for a high-stakes political, legal and constitutional battle with British Prime Minister Boris Johnson over the future of the United Kingdom.But the pound strengthened as market participants did not interpret this as a near-term risk. At 11:30 GMT, the pound was up 0.89% against the dollar at $1.4118. Immediate resistance can be seen at 1.4171(23.6%fib), an upside break can trigger rise towards 1.4200(Psychological level).On the downside, immediate support is seen at 1.4030 (38.2%fib), a break below could take the pair towards 1.4000(5DMA).
USD/CAD: The Canadian dollar rose to its highest since mid-September 2017 on Monday, but was last little changed on the day, drawing some support overall from firmer commodity prices and generally higher yields compared with its U.S. counterpart. Canada's economy lost 207,100 jobs in April, more than analysts' estimates of 175,000 job losses, with declines driven by coronavirus restrictions in populous Ontario, Quebec and British Columbia, data showed. The loonie was flat at 1.2119 per U.S. dollar, having earlier touched its strongest intraday level since September 2017 at 1.2090. Immediate resistance can be seen at 1.2147(5DMA), an upside break can trigger rise towards 1.2213(9DMA).On the downside, immediate support is seen at 1.2708 (23.6%fib), a break below could take the pair towards 1.1997(Higher BB).
USD/JPY: The dollar edged higher against the yen on Monday after subdued U.S. jobs data supported hopes that interest rates would remain low for some time, bolstering risk appetite. The United States created a little more than a quarter of the jobs that economists had forecast last month and the unemployment rate unexpectedly ticked higher, pouring cold water on speculation about runaway inflation. The dollar was a shade firmer on the yen at 108.76, but faces resistance at 109.42. Strong resistance can be seen at 109.00 (5DMA), an upside break can trigger rise towards 109.42(23.6%fib).On the downside, immediate support is seen at 108.41 (38.2%fib), a break below could take the pair towards 107.66 (50%fib).
Equities Recap
European stocks extended a record-setting rally on Monday as optimism about the reopening of economies and easy monetary policy lifted cyclical sectors, including mining and financials.
UK's benchmark FTSE 100 closed up by 0.08 percent, Germany's Dax ended down up 0.02 percent, France’s CAC finished the day up by 0.01 percent.
Wall Street closed lower on Monday as inflation fears drove investors away from market-leading growth stocks in favor of cyclicals, which stand to benefit most as the economy reopens.
Dow Jones closed down by 0.10% percent, S&P 500 closed down by 1.04% percent, Nasdaq settled down by 2.55% percent.
Treasuries Recap
Longer-dated U.S. Treasury yields rose on Monday, reversing course in the session, as investors awaited data later this week on inflation and auctions that will bring a burst of supply to the market.
Yields were whipsawed on Friday in the aftermath of much weaker-than-anticipated April jobs numbers, which showed nonfarm payrolls increased by only 266,000, well below the 770,000 reported for March and the 916,000 estimate.
Commodities Recap
Gold held firm near a three-month high on Monday after last week’s miss on the U.S. jobs growth numbers weighed on the dollar and bolstered expectations that interest rates will remain low.
Spot gold rose 0.4% to $1,836.89 per ounce by 1:44 p.m. EDT (1744 GMT), after touching its highest since Feb. 11 at $1,845.06. U.S. gold futures settled 0.3% higher at $1,837.60.
Oil rose on Monday after a cyberattack forced the shutdown of major fuel pipelines in the United States and raised concerns about supply disruption, outweighing rising coronavirus cases in Asia.
Brent crude was up by 69 cents, or 1%, at $68.97 a barrel by 1137 GMT. U.S. West Texas Intermediate (WTI) crude rose by 61 cents, or 0.9%, to $65.51. Both benchmarks rose more than 1% last week, their second consecutive weekly gain.
