Market Roundup
EUR/USD -0.25%, USD/JPY 0.16%, GBP/USD 0.01%, EUR/GBP -0.27%
DXY 0.25%, DAX 0.36%, FTSE 0.86%, Brent 0.99%, Gold -0.09%
DE Mar Industrial Orders MM, -0.9%, 0.5% f'cast, -0.2% prev(r)
EZ May Sentix Index, 19.2, 21.1 f'cast, 19.6 prev
Italy's 5-star says will not back technocrat govt
China's trade imbalance with US a long-term problem, says c.bank gov – Caixin
Japan central bank may hold off on stimulus exit for years - ex-BOJ official
NAFTA talks enter critical week with U.S. still pushing hard line
China's April FX reserves fall to 5-month low as dollar bounces
Oil surges to fresh highs on growing supply worries
Economic Data Ahead
(1000 ET/1400 GMT) U.S. Apr Employment Trends, 107.7 prev
(1500 ET/1900 GMT) U.S. Mar Consumer Credit, 16.0 bln f'cast, 10.60 bln prev
Key Events Ahead
(0825 ET/1225 GMT) FRB Atlanta's Raphael Bostic speaks at 2018 Financial Markets Conference - Amelia Island
(1130 ET/1530 GMT) ECB's Peter Praet gives keynote speech at SFAA event - Geneva
(1400 ET/1800 GMT) FRB Philadelphia's Patrick Harker moderates session - Amelia Island
(1400 ET/1800 GMT) FRB Richmond's Tom Barkin speaks at event - Fairfax
(1500 ET/1900 GMT) BoC's Timothy Lane participates in panel discussion - Horasis
(1530 ET/1930 GMT) FRB Dallas's Robert Kaplan and FRB Chicago's Charles Evans participate in a session - Amelia Island
FX Beat
DXY: The dollar index climbs back towards 2018 peak as dollar shrugs off jobs report and edges higher across the board. DXY was up 0.44% at 92.97 at 1200 GMT.
EUR/USD: EUR/USD extends weakness for 4th straight week. Firmer USD and a drop in Eurozone Sentix likely to keep downside pressure intact. Eurozone Sentix Investor Confidence index dipped to 19.2 for May missing forecasts at 21.0. Bears strongly in control, the pair is consolidating below 200-DMA at 1.2017, bias lower. Technical studies support further weakness in the pair. We see scope for test of major trendline support at 1.1855. On the flipside, 200-DMA is immediate resistance. Retrace and close above could negate bearish bias.
GBP/USD: Cable trades with strong bearish momentum. Bears strongly in control. GBP/USD extends slump for 4th straight week. GBP/USD looking to stage a correction from 1.35 as the BoE's interest rate call looms. Waning economic confidence on the back of lagging macro figures have forced the Bank of England (BoE) to walk back its recent hawkishness. The major hovers around 200-DMA at 1.3539. Decisive close below 200-DMA could see major weakness.
USD/CHF: USD/CHF climbs higher above parity, hits 1.0056, highest since May 2017. Stronger USD buying helps build on the momentum. USD supported higher by an uptick in the US Treasury bond yields. The prevailing risk-on, as seen by a positive trading sentiment around European equity markets further dents the Swiss Franc's safe-haven appeal. Upside finds immediate resistance at 1.0065 ahead of the 1.0100 handle.
USD/JPY: USD/JPY edges higher from 9-day lows at 108.64, trades 0.23% higher on the day. Persisting US dollar strength seen across the board. The major finds strong support at 100-DMA at 108.67, we see further weakness only on break below. 'Bearish Cypher' formation on daily charts keeps scope for further downside. We also evidence bearish divergence on Stochs which adds to the bearish bias. On the flipside 5-DMA is immediate resistance at 109.44. Break above to see next major resistance at 110.18 (200-DMA).
EUR/JPY: EUR/JPY is extending weakness below daily cloud, extends falling spree for 8th straight session. The pair is trading in a narrow range and technical indicators are biased lower. The pair was rejected at 20W SMA and is edging lower from 10-week highs of 133.48. Price has broken below channel base at 130.70 on the weekly charts. Technical indicators on weekly charts are bearish. Next major bear target lies at 38.2% Fib at 128.85. On the flipside we see major resistance at 20W SMA at 132.81, bearish invalidation only on break above.
Equities Recap
European shares firmer on Monday, boosted by good earning updates from corporate majors. The pan-European STOXX 600 index rallied 0.29 percent at 388.15 points, while the FTSEurofirst 300 index surged 0.22 percent to 1,593.21 points.
Britain's FTSE 100 trades 0.86 percent up at 7,567.14 points, while mid-cap FTSE 250 gained 0.28 percent to 20,421.88 points.
Germany's DAX rose 0.53 percent at 12,888.10 points; France's CAC 40 trades 0.39 percent higher at 5,518.19 points.
Commodities Recap
U.S. crude oil prices rose 70 cents, or 1 percent, pushing above $70 a barrel for the first time since November 2014. Brent crude oil futures were at $75.55 per barrel at 0945 GMT, up 0.9 percent and having also touched their highest since November 2014.
Gold fell on Monday, snapping three days of gains. Spot gold was down 0.1 percent at $1,313.03 an ounce by 0930 GMT. U.S. gold futures for June delivery eased by 0.1 percent to $1,314.
Spot silver was down 0.2 percent at $16.46 an ounce, while palladium gained 1.1 percent to $978. Platinum was 0.9 percent higher at $914.50 an ounce.
Treasuries Recap
U.S.: The U.S. Treasuries suffered Monday, ahead of a host of Federal Open Market Committee (FOMC) members Bostic, Barkin, Evans and Kaplan’s speech due to be delivered today by 12:25GMT, 18:00GMT and 19:30GMT respectively. Also, Federal Reserve Chair Jerome Powell is due to deliver a keynote speech on May 8, which will add further direction to the debt market. The yield on the benchmark 10-year Treasuries rose 1 basis point to 2.95 percent, the super-long 30-year bond yields also traded nearly 1 basis point higher at 3.12 percent and the yield on the short-term 2-year traded tad higher at 2.50 percent.
UK: UK markets remain closed today on account of Early May Bank Holiday.
EUR: The German bunds climbed during European session Monday amid a muted trading session that witnessed data of least economic significance. Market participants remained focused on the country’s industrial production for the month of March and trade balance data, scheduled to be released on May 8 by 06:00GMT. The German 10-year bond yields, which move inversely to its price, slipped 1 basis point to 0.53 percent, the yield on 30-year note also fell 1 basis point to 1.22 percent and the yield on short-term 2-year traded tad lower at -0.56 percent.
NZD: New Zealand bonds surged at the time of closing Monday amid a muted trading session that witnessed data of little economic significance. Investors will now remained focused on the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, scheduled to be unveiled on May 9 for further direction in the debt market. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped 1-1/2 basis points to 2.79 percent, the yield on the long-term 20-year note also plunged 1-1/2 basis points to 3.34 percent and the yield on short-term 2-year closed 2-1/2 basis points lower at 1.89 percent.
JGBs: The Japanese 10-year government bond yield remained tad lower during Asian session Monday after members of the Bank of Japan (BoJ) stuck to maintaining its ultra-easy monetary policy stance at its March 8-9 monetary policy meeting minutes, released early today. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 0.04 percent, the yield on the long-term 30-year note also remained tad lower at 0.72 percent and the yield on short-term 2-year hovered around -0.13 percent.
AUD: Australian bonds gained on the first trading day of the week Monday as investors moved into safe-haven buying ahead of the retail sales data, where the growth is expected to dip to 0.2 percent m/m in March, down from 0.6 percent m/m increase seen in February. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell over 2 basis points to 2.761 percent, the yield on the long-term 30-year Note dipped 2-1/2 basis points to 3.283 percent and the yield on short-term 2-year slumped nearly 1-1/2 basis points to 2.023 percent.
