Market Roundup
•China PBoC Loan Prime Rate (May) 3.50%, 3.50% forecast, 3.50% previous
•China PBoC Loan Prime Rate 3.00%, 3.00% forecast,3.00% previous
Looking Ahead Economic Data (GMT)
•10:00 EU CPI (YoY) (Apr): 3.0% forecast, 3.0% previous.
•10:00 EU Core CPI (YoY) (Apr): 2.2% forecast, 2.2% previous.
•10:00 EU CPI (MoM) (Apr): 1.0% forecast, 1.3% previous.
•10:00 BE Belgium Consumer Confidence (May): -9 previous.
•10:00 EU Core CPI (MoM) (Apr): 0.9% forecast, 0.9% previous.
•10:00 EU HICP ex Energy & Food (YoY) (Apr): 2.1% forecast, 2.2% previous.
•10:00 EU HICP ex Energy and Food (MoM) (Apr): 0.8% forecast, 0.7% previous.
•10:00 EU CPI ex Tobacco (MoM) (Apr): 1.3% previous.
•10:00 EU CPI ex Tobacco (YoY) (Apr): 2.5% previous.
•10:00 EU CPI, n.s.a (Apr): 103.05 forecast, 101.99 previous.
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Summaries
EUR/USD : The euro edged lower against the U.S. dollar on Wednesday as rising U.S. Treasury yields and growing expectations that the Federal Reserve will keep interest rates elevated continued to support the greenback broadly.Philadelphia Federal Reserve Bank President Anna Paulson said the current level of interest rates remains appropriate for now and is helping to ease inflationary pressures, even as price growth stays persistently elevated. Her comments reinforced the market view that the Fed is likely to maintain a cautious stance on policy easing.Investors are now awaiting the minutes from the Federal Reserve’s April policy meeting, due later in the day, for further clues on the U.S. central bank’s outlook for interest rates and inflation.On the geopolitical front, signals from Washington regarding Iran remained mixed. President Donald Trump warned that the United States may still need to strike Tehran if tensions escalate further. Immediate resistance can be seen at 1.1661(Daily high), an upside break can trigger rise towards 1.1705(SMA 20).On the downside, immediate support is seen at 1.1581(23.6%fib), a break below could take the pair towards 1.1526(April 7th low).
GBP/USD: Sterling slipped on Wednesday after UK inflation data showed price pressures eased more than expected in April, following a sharp rise in March that had been driven by higher energy costs linked to the Iran conflict.According to the Office for National Statistics, consumer prices rose 2.8% year-on-year in April, slowing from 3.3% in March, as the impact of last year’s sharp increases in regulated household energy and utility bills began to fade.Core inflation and services inflation also cooled by more than economists had anticipated, suggesting some easing in underlying domestic price pressures. However, producer cost pressures remained elevated, with manufacturers facing stronger-than-expected increases in input costs according to the Reuters poll.At the same time, motor fuel prices surged during April, highlighting the continued impact of geopolitical tensions and elevated energy markets on consumers.. Immediate resistance can be seen at 1.3414(Daily high), an upside break can trigger rise towards 1.3475(38.2%fib).On the downside, immediate support is seen at 1.3321(38.2%fib), a break below could take the pair towards 1.3154(23.6%fib).
AUD/USD: Australian dollar eased on Wednesday as Fed rate expectations and rising US treasury yields kept the US dollar supported.All eyes will be on Australia’s labour market data this Thursday, with economists expecting around 15,000 jobs to be added in April and the unemployment rate to remain steady at 4.3%.Any downside surprise would heighten concerns about a sharper slowdown, with the RBA already projecting growth to ease to about 1.3% by year-end, as the Middle East conflict adds to uncertainty.Swaps imply a 20% probability that the RBA will lift rates again in June, but a move in August is about 75% priced in. Rates are expected to peak at 4.6%, with some risk of reaching 4.85%. Immediate resistance can be seen at 0.7175(38.2%fib), an upside break can trigger rise towards 0.7196(SMA 20).On the downside, immediate support is seen at 0.7093(Lower BB), a break below could take the pair towards 0.7084(50%fib).
USD/JPY: The U.S. dollar eased on Wednesday as yen edged higher on growing concerns that Japanese authorities could step into the FX market to curb excessive yen weakness.Traders remain cautious about the possibility of fresh FX intervention by Japan’s Ministry of Finance (MOF), especially with authorities continuing to monitor rapid yen weakness closely.Attention is also turning toward the Bank of Japan, after US Treasury Secretary Scott Bessent again commented that the BOJ should be allowed to continue raising interest rates, reinforcing market expectations for tighter Japanese policy.Many market participants in Tokyo now anticipate a 25 basis point BOJ rate hike in June, which would lift the policy rate to 1.0%, marking another significant step away from Japan’s ultra-loose monetary stance. Immediate resistance can be seen at 159.08(38.2%fib) an upside break can trigger rise towards 159.00(Psychological level) .On the downside, immediate support is seen at 158.23(SMA 20) a break below could take the pair towards 157.78(50%fib ).
Equities Recap
Asian stocks fell for a second day on Wednesday as war-driven inflation fears pressured bonds, while investors awaited earnings from NVIDIA for clues on whether strong AI demand can help markets cope with higher borrowing costs.
Japan’s Nikkei 225 was down by 1.34% , Hang Seng was down at 0.57%, China A50 was down at 0.22%
Commodities Recap
Oil prices were down about 1% on Wednesday after U.S. President Donald Trump again asserted the war with Iran will end "very quickly", though investors remain wary about the outcome of peace talks amid continued disruptions to Middle Eastern supply.
Brent crude oil futures fell $1.11, or 1.0%, to $110.17 a barrel by 0640 GMT, while U.S. West Texas Intermediate futures were down $1.12, or 1.1%, to $103.03.
Gold prices eased on Wednesday to their lowest point in 1-1/2 months, as high Treasury yields and a firm dollar outweighed optimism over a potential U.S.-Iran peace agreement.
Spot gold was down 0.2% at $4,472.09 per ounce, as of 0615 GMT, having touched its weakest level since March 30. U.S. gold futures for June delivery lost 0.8% to $4,475.
