Market Roundup
- Trump seeks 'very meaningful' summit in Singapore with North Korea.
- U.S., Chinese officials to meet Friday, discuss Liu visit - U.S. official.
- RBNZ governor Orr says move lower in NZ dollar 'a good thing'.
- Australia March Housing Finance, -2.2%, last -0.2%.
- Australia March Invest Housing Finance, -9.0%, last 0.5%.
- Election over, new Malaysia PM gets down to business.
- U.S. investors cash out of emerging market stock funds –Lipper.
- Foreign CB US debt holdings -$10,936 bln to $3.396 tln May 9 week.
- Treasuries -$10,830 bln to $3.044 tln, agencies $435 mln to $275.600 bln.
Economic Data Ahead
- (0300 ET/0700 GMT) Spain April CPI YY, forecast 1.1%, last 1.2%.
- (0300 ET/0700 GMT) Spain April HICP YY, forecast 1.1%, last 1.1%.
Key Events Ahead
- (0830 ET/1230 GMT) Fed's Bullard speaks in Springfield, Missouri.
- (0915 ET/1315 GMT) ECB's Draghi speaks at 8th edition of The State of the Union organised by EUI in Florence, Italy.
FX Recap
USD: The dollar's index against a basket of six major currencies, stepped back to 92.71 from Wednesday's 4-1/2-month high of 93.42.
EUR/USD: The euro jumped back to $1.1915 from Wednesday's 4- 1/2-month low of $1.1823. A consistent close below $1.1915 will drag the parity down towards key supports around $1.1822 and $1.1745 levels respectively. Alternatively, reversal from key support will take the parity higher towards key resistances around $1.1978, $1.2084, $1.2240 and $1.2345 marks respectively.
USD/JPY: The Japanese yen consolidates around 109.40 mark against U.S. dollar. Pair remained close to its three-month high of 110.05 yen touched on May 2. It made intraday high at 109.56 and low at 109.19 levels. A sustained close above 109.82 is required to take the parity higher towards key resistance around 112.96 marks. Alternatively, a daily close below 109.05 will drag the parity down towards key supports around 108.54, 106.71 and 105.32 marks respectively.
GBP/USD: The British pound had less luck, falling to $1.3460 on Thursday, its lowest levels in four months, after the Bank of England reduced its growth and inflation outlook for 2018 and 2019 while keeping rates steady as expected. It was last fetching $1.3534. Sterling recovered back towards $1.35 on Thursday after Bank of England Governor Mark Carney told the BBC that he expected a rate rise over the course of the next year if there are no shocks to the economy. The pound had slid sharply earlier in the day after the BoE kept rates on hold and cut its economic growth and inflation forecasts. On the top side key resistance was seen at $1.3665 and support was seen at $1.3302 mark.
AUD/USD: The Australian dollar, which had been hit by the loss of its long-cherished status as the highest yielding currency in the developed world as U.S. rates have risen, bounced back to $0.7542 from Wednesday's 11-month low of $0.7413.
NZD/USD: The New Zealand dollar also bounced back from Thursday's five-month low of $0.6902 following a dovish tone from the country's central bank. It last stood at $0.6965. A sustained close above $0.6980 requires for the upside rally.
Equities Recap
Japan’s Nikkei was trading 0.98 pct higher at 22,718.55 points.
South Korea’s kospi was trading 0.58 pct higher at 2,478.86 points.
Shanghai composite index to open up 0.2 pct at 3,179.80 points and China's CSI300 index to open up 0.2 pct at 3,902.15 points.
Australia's S&P/ASX 200 index was up 0.17 pct at 6,129.50 points in early trade.
Hong Kong’s Hang seng was trading 1.50 pct higher at 31,264.50 points.
Taiwanese stock was trading around 0.84 percent higher at 10,850.75 points.
India’s NSE Nifty was trading around 0.30 percent higher at 10,747.80 points while BSE Sensex was trading 0.23 points higher at 35,326.88 points.
Commodities Recap
Oil prices on Friday dipped away from multi-year highs reached the previous session on hopes that alternative supplies could replace a looming drop in Iranian exports when U.S. sanctions against Tehran are re-imposed. Brent crude futures, the international benchmark for oil prices, were at $77.329 per barrel at 0308 GMT, down 19 cents, or 0.2 percent, from their last close. Brent the previous day hit its highest since November 2014 at $78 a barrel. U.S. West Texas Intermediate (WTI) crude futures were down 11 cents at $71.25 a barrel, but still not far off Thursday's November 2014 high of $71.89 per barrel.
Gold prices were steady in early trade on Friday, as the dollar held below its 2018 highs against a basket of currencies after softer-than-expected U.S. inflation data. Spot gold was steady at $1,321.93 per ounce at 0100 GMT, after rising to the highest since end-April at $1,322.76 in the previous session. U.S. gold futures for June delivery were nearly unchanged at $1,322.10 per ounce.
Treasuries Recap
Australian government bonds slumped on the last trading day of the week Friday as investors cashed in profits, tracking weakness in the U.S. Treasuries. Now, markets await next week’s employment report which might set a tone for the Reserve Bank of Australia in its next month’s monetary policy meeting. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 1-1/2 basis points to 2.796 percent, the yield on the long-term 30-year Note also climbed 1-1/2 basis points to 3.295 percent and the yield on short-term 2-year up 1 basis point to 2.033 percent by 03:20 GMT.
In the United States, Treasuries saw upward pressure in the long-end of the curve following the well-subscribed 30-year Bond auction, contrasted by weaker performance in the 2-year Note.
