Market Roundup
- Australia's conservative coalition secures parliamentary majority
- Trump says tariffs making companies leave China, a deal can't be '50-50'
- U.S. warship sails in disputed South China Sea amid trade tensions
- India's Modi set to return to power with a bigger majority, exit polls show
- Indian rupee, bonds rally on election exit polls; stocks in focus for flows
- Saudi Arabia says oil producers want to reduce inventories
- Japan Q1 GDP QQ, 0.5%, 0.0% f'cast, 0.5% prev, 0.4% rvsd
- Japan Q1 GDP QQ Annualised, 2.1%, -0.2% f'cast, 1.9% prev, 1.6% rvsd
- Japan Q1 GDP QQ Pvt Consmp Prelim, -0.1%, -0.1% f'cast, 0.4% prev, 0.2% rvsd
- Japan Q1 GDP QQ Capital Expend., -0.3%, -1.7% f'cast, 2.7% prev, 2.5% rvsd
- Japan Q1 GDP QQ External Demand, 0.4%, 0.3% f'cast, -0.3% prev
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Mar Current Account SA, EUR, 26.800 bln prev
Key Events Ahead
- N/A Fed's Clarida and New York Fed President John Williams participate in two-hour "Fed Listens" Roundtable in New York
- (0705 ET/1105 GMT) Riksbank Deputy Governor Cecilia Skingsley talks about developments in the payment market during the conference "Cash on Trial"
- (0730 ET/1130 GMT) German Economy Minister Peter Altmaier speaks on his country's industrial strategy at an economic forum in Brandenburg, Germany
- (0930 ET/1330 GMT) Philadelphia Fed President Patrick Harker speaks on the economic outlook before the Management Science 65th Anniversary Conference in Boston
- (1230 ET/1630 GMT) BoE Deputy Governor Ben Broadbent speaks on "Investment and the duration of uncertainty" at Imperial College Business School in London
FX Beat
DXY: The dollar index rallied to a 2-week peak after U.S. President Donald Trump said his tariffs on Chinese goods are causing companies to move production out of China, and any agreement with China cannot be a 50-50 deal. The greenback against a basket of currencies traded flat at 98.02, having touched a high of 98.03 earlier, its highest since May 3. FxWirePro's Hourly Dollar Strength Index stood at 76.75 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro plunged to a 2-week trough after European Central Bank policymaker Klaas Knot stated that inflation in the euro zone is not at the level the ECB wants it to be. Moreover, concerns over this week's European parliamentary elections and comments from Italian Deputy Prime Minister Matteo Salvini continued to weigh on the major. The European currency traded 0.1 percent down at 1.1151, having touched a low of 1.1150 earlier, its lowest since May 3. FxWirePro's Hourly Euro Strength Index stood at -12.85 (Neutral) by 0500 GMT. Investors’ attention will remain on the Eurozone current account figures, ahead of the Chicago Fed National Activity index, and speeches by Fed's Clarida and Powell. Immediate resistance is located at 1.1218 (May 7 High), a break above targets 1.1262 (April 22 High). On the downside, support is seen at 1.1118 (April 25 Low), a break below could drag it below 1.1100.
USD/JPY: The dollar rallied to a 2-week peak, as risk sentiment improved after the United States struck deals to lift tariffs on steel and aluminium imports from Canada and Mexico, removing a major obstacle to legislative approval of a new North American trade pact. The major was trading 0.1 percent up at 110.15, having hit a high of 110.31, its highest since May 7. FxWirePro's Hourly Yen Strength Index stood at -43.45 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the Chicago Fed National Activity index, and speeches by Fed's Clarida and Powell. Immediate resistance is located at 110.67 (61.8% retracement of 111.68 and 109.01), a break above targets 111.11 (78.6% retracement). On the downside, support is seen at 109.47 (May 10 Low), a break below could take it lower at 109.01 (May 14 Low).
GBP/USD: Sterling steadied after falling to a 4-month low in the previous session on news that cross-party Brexit talks collapsed and concerns about the impact Prime Minister Theresa May's likely resignation on Britain's EU separation. The major traded 0.2 percent up at 1.2734, having hit a low of 1.2711 on Friday; it’s lowest since Jan. 15. FxWirePro's Hourly Sterling Strength Index stood at -86.43 (Slightly Bearish) 0500 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of data from the UK docket. Immediate resistance is located at 1.2823 (23.6% retracement of 1.3176 and 1.2711), a break above could take it near 1.2890 (38.2% retracement). On the downside, support is seen at 1.2709 (Jan. 11 Low), a break below targets 1.2668 (Jan. 15 Low). Against the euro, the pound was trading 0.1 percent up at 87.62 pence, having hit a low of 87.78 on Friday, it’s lowest since Feb. 15.
AUD/USD: The Australian dollar rebounded from a 4-1/2 month low recorded last week, after Australian Prime Minister Scott Morrison's centre-right Liberal-National Coalition secured a victory in federal elections, beating the centre-left Labor party. The Aussie trades 0.8 percent up at 0.6922, having hit a low of 0.6864, it’s lowest since Jan. 3. FxWirePro's Hourly Aussie Strength Index stood at -50.19 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6863, a break below targets 0.6835. On the upside, resistance is located at 0.6961 (Apr. 30 High), a break above could take it near 0.7002 (May 6 High).
NZD/USD: The New Zealand dollar bounced from a 6-1/2 month trough, supported by a statement from China's central bank on Sunday that it would maintain the stability of its yuan within a reasonable and balanced range. The Kiwi trades 0.4 percent up at 0.6539, having touched a low of 0.6513 on Friday, its lowest level Nov. 1. FxWirePro's Hourly Kiwi Strength Index was at -45.81 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6591 (May 14 High), a break above could take it near 0.6653 (May 3 High). On the downside, support is seen at 0.6502 (Oct. 25 Low), a break below could drag it below 0.6474 (Oct. 4 Low).
Equities Recap
Asian shares surged after the United States said it would lift tariffs in North America, although escalating U.S.-China trade tensions limited upside.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.6 percent.
Tokyo's Nikkei rose 0.2 percent to 21,301.73 points, Australia's S&P/ASX 200 index gained 1.7 percent to 6,476.10 points and South Korea's KOSPI tumbled 0.05 percent to 2,055.71 points.
Shanghai composite index fell 0.5 percent to 2,868.17 points, while CSI 300 index traded 0.9 percent down at 3,614.44 points.
Hong Kong’s Hang Seng traded 0.5 percent lower at 27,810.61 points. Taiwan shares added 0.1 percent to 10,398.41 points
Commodities Recap
Crude oil prices rallied to multi-week highs after OPEC indicated it will likely maintain production cuts that have helped support prices this year. International benchmark Brent crude was trading 1.6 percent higher at $73.14 per barrel by 0458 GMT, having hit a high of $73.39 earlier, its highest since Apr, 26. U.S. West Texas Intermediate was trading 1.4 percent up at $63.55 a barrel, after rising as high as $63.79, its highest since the May 1.
Gold prices eased, hovering towards a 2-week low hit in the previous session, as strong U.S. economic data underpinned the dollar amid geopolitical and trade tensions. Spot gold declined 0.1 percent at $1,276.28 per ounce at 0501 GMT, having touched a low of $1,274.73 on Friday, its lowest since May 3. U.S. gold futures were 0.1% higher at $1,276.40 an ounce.
Treasuries Recap
The yield on benchmark 10-year Treasury notes rose to 2.4015 percent compared with a U.S. close of 2.393 percent on Friday, while the two-year yield touched 2.2146 percent, up from Friday's close of 2.202 percent.
The Japanese government bond prices eased slightly, with the benchmark 10-year JGB yield rising 1 basis point to minus 0.050 percent. The 20-year yield and the 30-year yield each gained 1.5 basis points, to 0.365 percent and 0.540 percent, respectively. The 10-year JGB futures slipped 0.11 point to 152.65.
The Australian government bond futures were near record peaks, with the three-year bond contract steady at 98.825, while the 10-year contract YCc1 added half a tick to 98.3550.
The New Zealand government bond yields were near historic lows.
