Market Roundup
- EUR/USD 0.20%, USD/JPY -0.29%, GBP/USD 0.45%, EUR/GBP -0.27%
- DXY -0.24%, DAX -0.09%, FTSE -0.19%, Brent 0.96%, Gold 0.41%
- EZ Q1 GDP Flash Prelim YY, 1.2%, 1.1% forecast, 1.1% previous
- EZ Mar Unemployment Rate, 7.7%, 7.8% forecast, 7.8% previous
- DE May GfK Consumer Sentiment, 10.4, 10.3 forecast, 10.4 previous
- DE Mar Import Prices YY, 1.7%, 2.0% forecast, 1.6% previous
- DE Apr Unemployment Rate SA, 4.9%, 4.9% forecast, 4.9% previous
- GB Apr GfK Consumer Confidence, -13, -12 forecast, -13 previous
- FR Q1 GDP Prelim QQ, 0.3%, 0.3% forecast, 0.3% previous
- FR Mar Consumer Spending MM, -0.1%, 0.5% forecast, -0.4% previous
- FR Apr CPI (EU Norm) Prelim YY NSA, 1.4%, 1.4% forecast, 1.3% previous
- Italy's economy edges out of recession in Q1 2019 -ISTAT
- Mnuchin hopes for "substantial progress" in China trade talks
- Britain's Labour meets to decide stance on second Brexit referendum
Economic Data Ahead
- (0830 ET/1230 GMT) CA Feb GDP MM, 0.0% forecast, 0.3% previous
- (0830 ET/1230 GMT) CA Mar Producer Prices MM, 0.7% forecast, 0.3% previous
- (0830 ET/1230 GMT) CA Mar Raw Material Prices MM, 3.9% forecast, 4.6% previous
- (0830 ET/1230 GMT) U.S. Q1 Employment Costs, 0.7% forecast, 0.7% previous
- (0855 ET/1255 GMT) U.S. w/e 27 Apr Redbook YY, 6.0% previous
- (0945 ET/1345 GMT) U.S. Apr Chicago PMI, 59.0 forecast, 58.7 previous
- (1000 ET/1400 GMT) U.S. Apr Consumer Confidence, 126.0 forecast, 124.1 previous
- (1000 ET/1400 GMT) U.S. Mar Pending Sales Change MM, 1.1% forecast, -1.0% previous
Key Events Ahead
- N/A Federal Reserve's FOMC commences its two-day meeting on interest rates
- (1100 ET/1500 GMT) BoC's Stephen Poloz and Carolyn Wilkins testify to House of Commons finance committee - Ottawa
FX Beat
DXY: Against a basket of currencies the dollar was down 0.29 percent at 97.57 at 1115 GMT. Price action down for the third straight session. On track to test 21-EMA at 97.41.
EUR/USD: EUR/USD extends gains on broad-based USD weakness and upbeat data. The major was trading at 1.1213, up 0.25 percent at 1115 GMT. EMU advanced Q1 GDP surprised to the upside, printing at 0.4 percent q/q during the first quarter, up from 0.2 percent. Unemployment rate dropped to 7.7 percent, lowest since Sept 2008. 21-EMA at 1.1227 is immediate resistance and break above could see gains till 55-EMA. 5-DMA is immediate support at 1.1164. Weakness likely on break below.
USD/CHF: USD/CHF edges higher from session lows at 1.0174. The major was trading at 1.0190 at 1145 GMT. US dollar index halted its one month winning streak and lost more than 50 pips on broad based US dollar selling. Broad-based US dollar weakness weighing on the pair. Near term support lies around 1.0184 (7- day MA) and any break below will take the pair lower till 1.0162 (10- day MA)/1.0125/1.0100. Major resistance seen around 1.02500 and any convincing break above targets 1.0300/1.03400.
GBP/USD: Optimism around Labour's cross-party Brexit talks with the Conservatives helping inflate GBP/USD to a one-week high of 1.3012 on Tuesday. Cable trades 0.57 percent higher on the day, extending gains for the 3rd straight session. Price has broken above 200-DMA and is testing resistance at 110-EMA at 1.3019. Break above targets 55-EMA at 1.3035. 200-DMA at 1.2961 is immediate support. Retrace below negates bullish bias. Focus on FOMC meeting for further impetus.
USD/JPY: USD/JPY break below 200-DMA raises scope for weakness. The major was trading at 111.27 at 1100 GMT, breaking strong support at 200-DMA at 111.50. Focus remains on the Fed policy meeting on Wednesday May 1st for further impetus. The central bank is expected to remain on extended hold, while focus will be on the FOMC statement, followed by the Fed Chair Powell's press conference. Serious of strong support seen till daily cloud at 110.86. Break below cloud top to see further weakness. Next major bear target lies at 110.57 (23.6% Fib). Retrace above 200-DMA negates bearish bias.
Equities Recap
European markets nudged down on weak China data which dampened appetite for risk. At 1145 GMT, the pan-European STOXX 600 index was down 0.08% at 390.92 points, while the FTSEurofirst 300 index fell 0.10 percent to 1,545.79 points.
Britain's FTSE 100 trades 0.20 percent lower at 7,425.98 points, while mid-cap FTSE 250 was down 0.17 percent at 19,876.97 points.
Germany's DAX unchanged at 12,329.73 points; France's CAC 40 trades 0.24 percent lower at 5,567.65 points.
Commodities Recap
Oil extends recovery as Saudi Arabia says OPEC may extend supply cuts. Brent crude futures were at $72.25 per barrel at 0701 GMT, up 0.3 percent. U.S. West Texas Intermediate (WTI) crude futures were at $63.67 per barrel, up 0.3 percent.
Gold edges higher on weaker equities. Spot gold was up 0.2 percent at $1,281.95 per ounce at 0123 GMT. U.S. gold futures were up 0.2 percent at $1,283.90 an ounce.
Treasuries Recap
U.S.: The U.S. Treasuries continued to trade flat during Tuesday’s afternoon session ahead of the country’s Conference Board’s consumer survey and Chicago PMI reports for April, due later today, besides, pending home sales for March, S&P CoreLogic house price data for February, and the Employment Cost Index for Q1. Further, the Federal Open Market Committee’s (FOMC) monetary policy meeting, scheduled to be held on May 1 and the country’s employment report for the month of April, due by the end of this trading week, will add direction to the debt market. The yield on the benchmark 10-year Treasury yield hovered around 2.531 percent, the super-long 30-year bond yields traded tad lower at 2.960 percent and the yield on the short-term 2-year too remained steady at 2.290 percent.
EUR: The German bunds slumped during European trading session Tuesday after the country’s unemployment data for the month of April cheered market participants, dropping far more than what was initially anticipated. Also, the eurozone’s gross domestic product (GDP) for the first quarter of this year too contributed to the rise in bund yields. The German 10-year bond yields, which move inversely to its price, jumped nearly 3-1/2 basis points to 0.033 percent, the yield on 30-year note surged 3 basis points to 0.678 percent and the yield on short-term 2-year traded nearly 1 basis point up at -0.589 percent.
JGBs: Japanese markets remain closed today on account of Showa Day.
AUS: Australian government short-term bonds gained during Asian session Tuesday as factory activity in China expanded for a second straight month in April but at a much slower pace. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose about 1/2 basis point to 1.803 percent, the yield on the long-term 30-year bond jumped 2 basis points to 2.461 percent and the yield on short-term 2-year fell 1 basis point to 1.343 percent.
