Market Roundup
• US April ADP Nonfarm Employment Change -20,236K, -20,050K forecast, -27K previous
• Brazil April Markit Composite PMI 26.5, 37.6 previous
• Brazil April Markit Services PMI 27.4, 34.5 previous
• US Crude Oil Inventories 4.590M , 7.759M forecast, 8.991M previous
• US Gasoline Inventories -3.158M, 0.043M forecast, -3.669M previous
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand Labor Cost Index (YoY) (Q1) 2.5% forecast, 2.4% previous
• 22:45 New Zealand Labor Cost Index (QoQ) (Q1) 0.4% forecast, 0.6% previous
• 22:30 New Zealand April AIG Services Index 38.7 previous
• 01:30 Australia March Exports (MoM) -5% previous
• 01:30 Australia March Imports (MoM) -4% previous
• 01:30 Australia March Trade Balance 6.800B forecast, 4.361B previous
• 01:45 China April Caixin Services PMI 43.0 previous
• 01:45 China April Caixin Services PMI 43.0 previous
Looking Ahead - Economic events and other releases (GMT)
• No significant events
Currency summaries
EUR/USD: The euro dipped against dollar on Wednesday as a court decision challenging German participation in the euro zone's stimulus program weighed on the euro. Germany’s highest court on Tuesday gave the European Central Bank three months to justify purchases under its bond-buying programme, or lose the Bundesbank as a participant in a scheme aimed at cushioning the economic blow from the coronavirus. Immediate resistance can be seen at 1.0824 (38.2% fib), an upside break can trigger rise towards 1.0873 (21 DMA).On the downside, immediate support is seen at 1.0783 (Daily low), a break below could take the pair towards 1.0760 (Lower BB).
GBP/USD: The pound fell to a 12-day low against the dollar on Wednesday, ahead of a Bank of England meeting on Thursday where monetary policymakers will try to quantify the impact of the coronavirus on the world’s fifth largest economy. On the data front,the construction PMI showed a steep monthly decline, falling far below even the lowest estimates from economists. By 19:32 GMT, sterling was down 0.46% against the dollar at $1.2343. Immediate resistance can be seen at 1.2411 (21 DMA), an upside break can trigger rise towards 1.2468 (5 DMA).On the downside, immediate support is seen at 1.2335 (Daily low), a break below could take the pair towards 1.2289 (Lower BB).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday as a rally in the price of oil, one of Canada's major exports, lost some momentum and the greenback broadly climbed. The decline for the loonie came as a report showed U.S. private employers laid off more than 20 million workers in April. Canada sends about 75% of its exports to the United States. At (1929 GMT), the Canadian dollar was trading 0.54% lower at 1.4142 to the greenback. Immediate resistance can be seen at 1.4158 (Daily high), an upside break can trigger rise towards 1.4200 (Psychological level).On the downside, immediate support is seen at 1.40264 (9 DMA), a break below could take the pair towards 1.3978 (50 DMA).
USD/JPY: The dollar declined against the Japanese yen on Wednesday as investors sought refuge in yen in the wake of dire global economic numbers. On the data front,U.S. private payrolls data showed a record of more than 20 million jobs lost in April as shown the ADP National Employment Report, but the dollar held gains. The dollar fell 0.4% against the yen, to 106.11 yen, after dropping to a seven-week low of 106.06 yen. Immediate resistance can be seen at 106.80 (5 DMA), an upside break can trigger rise towards 107.00 (9 DMA ).On the downside, immediate support is seen at 105.84 (Lower BB), a break below could take the pair towards 105.66 (23.6%fib).
Equities Recap
European shares edged higher on Wednesday, riding on gains in the healthcare sector, but sentiment was subdued as weak data and simmering U.S.-China tensions added to doubts about a swift economic recovery even as many countries eased lockdowns.
UK's benchmark FTSE 100 closed up by 0.07 percent, Germany's Dax ended down by -1.15 percent, France’s CAC finished the day down by 1.11 percent.
Wall Street seesawed on Wednesday amid hopes for a pickup in business activity and as oil prices slumped with demand low after a rise in U.S. crude stockpiles last week to three-year highs.
Dow Jones closed down by 0.75 percent, S&P 500 ended down by 0.52 percent, Nasdaq finished up by 0.65 percent.
Treasuries Recap
Longer-dated Treasury yields jumped to three-week highs on Wednesday and the yield curve steepened after the Treasury Department sharply increased the size of its long-dated debt auctions, as it grapples with financing its rapidly expanding deficit.
Benchmark 10-year note yields jumped 7 basis points on the day to 0.725%, the highest since April 15. Thirty-year bond yields rose 8 basis points to 1.405%, the highest since April 14.
Commodities Recap
Gold fell more than 1% on Wednesday, pressured by a stronger dollar and expectations that gold supplies will grow as bullion refineries resume operations, and on gradual improvement in investor risk appetite as countries have begun to ease coronavirus restrictions.
Spot gold slipped 1.2% to $1,685.00 per ounce by 11:11 a.m. EDT (1511 GMT).U.S. gold futures fell 1.3% to $1,688.30.
Oil dropped more than 5%, falling below $30 a barrel on Wednesday as U.S. crude inventories ticked up and gasoline demand remained below normal seasonal levels, offsetting hopes for a recovery in demand as some countries ease coronavirus lockdowns.
Brent was down $1.90, or 6.2%, at $29.07 a barrel, reversing course after rising in the past six sessions. West Texas Intermediate (WTI) crude fell $1.30, or 5.4%, to $23.26.
