Market Roundup
• Japan Corporate Services Price Index (CSPI) (YoY) (Apr): 3.0%, 3.3% forecast, 3.3% previous.
•Australia MI Leading Index (MoM) (Apr): 0.0%, -0.1% previous.
•Australia Construction Work Done (QoQ) (Q1): 3.4%, 0.8% forecast, 0.2% previous.
•Australia Weighted Mean CPI (YoY) (Apr): 4.20%, 4.40% forecast, 4.60% previous.
•China Industrial Profit YTD (Apr): 18.2%, 15.5% previous.
•New Zealand RBNZ Interest Rate Decision: 2.25%, 2.25% forecast, 2.25% previous.
Looking Ahead Economic Data (GMT)
• 07:45 France Consumer Confidence (May): 85 forecast, 84 previous.
• 09:00 Switzerland ZEW Expectations (May): -30.3 previous.
• 09:00 Italy Industrial Sales (YoY) (Mar): 0.50% previous.
• 09:00 Italy Industrial Sales (MoM) (Mar): 0.60% previous.
•11:00 France Jobseekers Total (Apr): 3,109.1K previous.
Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro edged higher against the dollar on Wednesday as investors remained cautious after Iran accused the United States of violating a ceasefire by striking targets near the Strait of Hormuz, complicating efforts to end the conflict. Market participants also awaited comments from Federal Reserve policymakers, including Vice Chair Philip Jefferson and Governor Lisa Cook, for clues on the outlook for U.S. monetary policy amid persistent inflation concerns. Attention is also turning to Thursday’s U.S. Personal Consumption Expenditures (PCE) data, a key inflation gauge closely watched by the Fed. Meanwhile, the U.S. dollar index, which tracks the greenback against a basket of six major currencies, slipped 0.05% to 99.07 after rising 0.15% in the previous session. Immediate resistance can be seen at 1.1648(May 25th high), an upside break can trigger rise towards 1.1693(SMA 20).On the downside, immediate support is seen at 1.1577(23.6%fib), a break below could take the pair towards 1.1561(Lower BB).
GBP/USD: Sterling edged up against the dollar on Wednesday as traders monitored U.S.-Iran tensions and awaited signals from Federal Reserve officials on future policy. Iran's foreign ministry said U.S. strikes in the southern Hormozgan province represented a "gross violation" of a ceasefire. The U.S. said its attacks were defensive in nature.U.S. Secretary of State Marco Rubio said a deal with Tehran to halt the conflict could "take a few days," while Iran's Tasnim news agency reported that Tehran was seeking the release of $24 billion in funds frozen overseas. Immediate resistance can be seen at 1.3505(SMA 20), an upside break can trigger rise towards 1.3526(50%fib).On the downside, immediate support is seen at 1.3473(Daily low), a break below could take the pair towards 1.3382(61.8%fib).
AUD/USD: Australian eased against dollar on Wednesday after softer-than-expected Australian inflation data for April eased immediate pressure on the Reserve Bank of Australia to maintain a tighter policy stance.Monthly CPI rose 0.4% m/m versus a 0.6% forecast, while annual inflation printed at 4.2% compared with expectations of 4.4%, reinforcing signs of moderating price momentum.On the Geopolitical front, U.S.-Iran peace negotiations remain highly uncertain following renewed U.S. strikes, with markets closely watching for any further escalation in geopolitical tensions.Iran has issued fresh warnings of retaliation, while Brent crude eased slightly in Asian trade but remained elevated near the $100 per barrel mark amid ongoing supply-risk concerns.Attention now turns to Australia’s Q1 capital expenditure data due Thursday, with a Reuters poll expecting a 1.0% quarter-on-quarter increase, which will help shape growth and investment expectations. Immediate resistance can be seen at 0.7178(38.2%fib), an upside break can trigger rise towards 0.7189(SMA 20).On the downside, immediate support is seen at 0.7104(Lower BB), a break below could take the pair towards 0.7088(50%fib).
USD/JPY: The U.S. dollar edged lower on Wednesday after BoJ Governor Kazuo Ueda flagged rising inflation risks but gave no signal of an imminent rate hike.BoJ Governor Kazuo Ueda said central banks should not focus on oil prices alone, as temporary shocks can become persistent through wages and inflation expectations. Ueda described the oil spike caused by the U.S.-Israeli war on Iran as a "fifth oil price shock" and said policymakers can learn from their experiences in dealing with previous shocks.The comments come as rising oil prices from Middle East tensions add inflation pressure in Japan, prompting BOJ officials to signal a more hawkish stance and markets to price in a possible rate hike as early as next month.The BoJ said it wants inflation to sustainably reach 2%, driven by wages and services rather than raw material costs, before raising rates further. Immediate resistance can be seen at 159.45(38.2%fib) an upside break can trigger rise towards 160.00(Psychological level) .On the downside, immediate support is seen at 158.67(50%fib) a break below could take the pair towards 158.27(April 16th low ).
Equities Recap
Asian shares climbed to record highs on Wednesday while oil prices remained elevated, as investors looked for signs that a fragile truce between the United States and Iran would hold and potentially be extended.
Japan’s Nikkei 225 was up by 0.36% , South Korea’ KOSPI was up at 2.99%, China A50 was down at 0.22%
Commodities Recap
Oil prices retreated from recent highs on Wednesday, giving back part of the previous session’s 4% rally as traders awaited clearer signals from complex U.S.-Iran negotiations after renewed hostilities disrupted efforts to reopen the Strait of Hormuz.
Brent crude futures fell $1.42, or 1.43%, to $98.16 a barrel as of 0253 GMT, while U.S. West Texas Intermediate (WTI) crude lost $1.66, or 1.77%, to $92.23 a barrel.
Gold prices edged lower on Wednesday as investors assessed ongoing tensions between the U.S. and Iran, while awaiting comments from Federal Reserve officials for clues on the interest rate outlook.
Spot gold was down 0.1% at $4,502.25 per ounce, as of 0412 GMT. U.S. gold futures for June delivery were steady at $4,501.10.
