Market Roundup
- EUR/USD +0.07%, USD/JPY +0.15%, GBP/USD +0.03%, EUR/GBP +0.05%
- DXY +0.04%, DAX +0.34%, FTSE -0.05%, Brent -0.89%, Gold -0.42%
- The greenback recovered on Thursday after suffering some brief losses overnight with traders focusing on relatively confident comments from Fed Chair Jerome Powell on the economy's outlook
- The dollar took a beating after a surprisingly sharp retreat in the ISM index of manufacturing to 52.8 and downgrades of the U.S. inflation outlook prompted investors to sell the U.S. currency and push Treasury yields lower
- Sterling broadly steady after hitting a two-week high on Wednesday on speculation that Brexit talks between the British government and the main opposition party were making some progress
- Euro inches higher upon stronger economic growth data out of the eurozone prompted some short covering from hedge funds
- Japanese yen edgy, marginally dropped to 111.539 yen per dollar in quiet trading as Japanese markets remain shut down for a series of holidays
Economic Data Ahead
- (0730 ET/1130 GMT) Bank of England’s governor Carney’s speech on the monetary policy committee meeting
- (0830 ET/1230 GMT) Initial jobless claims 215,000 (consensus) 230,000 (previous)
- (1000 ET/1400 GMT) Factory orders for March
Key Events Ahead
- (0830 ET/1230 GMT) Initial jobless claims
- (0830 ET/1230 GMT) Continued jobless claims
- (0830 ET/1230 GMT) Labor costs preliminary for Q1
FX Beat
DXY: DXY is trading lower for 4thconsecutive days and nearly 100 pips from high of 98.33. It hits low of 97.34 and is currently trading around 97.37.
The near-term support is around 97.35 (20- day MA) and any violation will drag the index till 97 (55- day EMA)/96.75. It should break below 96.75 for further weakness.
On the higher side, 98 will be acting as minor resistance and any indicative break above targets 98.33/98.55.
FxWirePro's Hourly Dollar Strength Index stood at 24 (Mildly bullish) by 11:18 GMT.
EUR/USD: The pair hits high of 1.12647 highest level in 10 days after Fed meeting and lost more than 70 pips from the high. Fed has kept its rates unchanged and it was positive on US economic growth and mentioned that rates to be lower till 2019 on weak inflation. It hits low of 1.11872 and is currently trading around 1.12019.
On the higher side, pair is facing strong trend line resistance around 1.12600 and any convincing break confirms bullish continuation and jumps till 1.1300/1.13240/1.1360. Any break above 1.1360 targets 1.14200/1.14500. The minor resistance is around 1.1233 (20-day MA). The near-term support is around 1.11750 and any break below will drag the pair till 1.1140/1.1100.
FxWirePro's Hourly Euro Strength Index stood at 66 (Bullish) by 11:18 GMT.
USD/CAD: USDCAD hits year low of 1.30685 on Feb 1st2019 and shown a sharp recovery of more than 450 pips. The jump was due to weak Canadian economic data and broad-based US dollar buying. Crude oil has jumped more than 50% this year which was slightly supportive for the Canadian dollar. The high made previous year was 1.36648 and lost more than 550 pips due to the surge in oil price. Yesterday pair hits low of 1.33770 and is currently trading around 1.34398.
On the lower side, near term support is around 1.3378 (20- day MA) and any break below confirms further weakness, decline till 1.3345/1.3300 is possible. It should break below 1.32744 for further bearish continuation. The near-term resistance is around 1.34675 high made on Mar 7th2019 and any violation above targets 1.35214 high made on Apr 24th2019. Any major bullishness can be seen only above 1.35215 and break above targets 1.358/1.3660.
FxWirePro's Hourly CAD Strength Index stood at 50 (Bullish) by 11:18 GMT.
GBP/USD: Cable prices accelerated up through 1.2975-1.3020 resistance yesterday and breached falling wedge resistance, the impulsive reversal from 1.2865 has been impressive and suggests that last week’s break of range support was another false move. While over 1.2910-1.2880 support we are biased for a further recovery into the previous range under 1.3400. A drop back through that support would suggest a lower range can develop between 1.2865 and 1.3125, with a subdued broader USD part of that process. A break of 1.2865 would be more bearish and open a test of 1.2820-1.2775.
FxWirePro's Hourly Sterling Strength Index stood at 59 (Bullish) 11:18 GMT.
USD/CHF: USDCHF has recovered sharply from low of 1.01250 and jumped more than 50 pips. The pair was trading weak for past 1-week and lost more than 100 pips from high 1.02369 highest level since Apr 2017. Fed has kept its rates unchanged and it was optimistic about US economic growth and mentioned that rates to be lower till 2019 on weak inflation. Traders got slightly disappointed as they are looking for a hint of a rate cut. It hits intraday high of 1.01847 and is currently trading around 1.01954.
The pair is trading above major resistance 1.01750 and a confirm jump till 1.02350/1.02500 is likely. The near-term support is around 1.01570 and any violation below will drag the pair to next level till 1.01250. Any break below 1.01250 confirms minor trend reversal and a dip till 1.0070/1.000 is possible.
FxWirePro's Hourly Swiss Franc Strength Index stood at 51 (Bullish) by 11:18 GMT.
Equities Recap
Europe's basic resource stocks led the downward shift in equities with a 1.4 percent drop to their lowest since late March. Continental Europe was also trying to get back up to speed having been shut for holidays on Wednesday.
Overall, European stocks struggle early on, factory data weak
S&P500 was down by -0.75%, Dow Jones was also down by -0.61%
Germany's DAX is up by 0.20% at 12,368.46 points; France's CAC 40 trades -0.48% percent lower at 5,559.79 points.
FTSE is edgy at 7,381.05 (down by -0.06%).
Commodities Recap
Energy:
Crude oil prices dropped on Thursday, pulled down by record U.S. crude production that led to a surge in inventories but global markets remained tense amid an intensifying political crisis in Venezuela, tightening U.S. sanctions on Iran, and ongoing OPEC supply cuts.
Brent crude oil futures were at $71.57 per barrel at 0837 GMT, 61 cents below their last close. Brent is set for a weekly loss, which would break its longest string of weekly gains for a year.
U.S. West Texas Intermediate crude futures were down 60 cents at $63.00 per barrel.
U.S. crude stockpiles last week rose to their highest since September 2017, jumping by 9.9 million barrels to 470.6 million barrels as production hit a record high of 12.3 million barrels per day (bpd), government data showed.
Precious metals:
Gold on Thursday dropped to its lowest in a little over one week, after comments from the U.S. Federal Reserve Chairman Jerome Powell dashed hopes of a near-term rate cut, boosting the dollar and treasury yields.
Spot gold shed 0.4 percent to $1,271.06 per ounce as of 0809 GMT, having fallen to $1,270.37, its lowest since April 24, earlier in the session.
U.S. gold futures fell 0.9 percent to $1,272.60 an ounce.
Silver near 4-months low at 14,693 or -0.24%.
Platinum touches lowest (dropped to 859.50 or -0.81%) in nearly a month.
Palladium slipped 0.5 percent to $1,345.50, having touched its lowest level since January. 25 at $1,309.67 in the previous session.
Treasuries Recap
U.S.: The U.S. Treasury yields continued to trend higher during Thursday's afternoon session, tracking the Federal Reserve’s monetary policy decision, unveiled late yesterday, besides, Governor Jerome Powell adding that the central bank expects the decline in inflation as only temporary and not a paranoid situation for the economy as of now. Investors will now be eyeing the country’s weekly initial jobless claims, scheduled to be released today by 12:30GMT for further direction in the debt market. The yield on the benchmark 10-year Treasury yield jumped nearly 2-1/2 basis points to 2.534 percent, the super-long 30-year bond yields traded tad higher at 2.924 percent and the yield on the short-term 2-year surged 3 basis points to 2.331 percent.
EUR: The German bunds slumped during European trading session Thursday after investors have largely shrugged-off the lower-than-expected fall in the country’s manufacturing PMI for the month of April, released today. Investors will now be awaiting the eurozone’s consumer price inflation (CPI) data for the month of April, scheduled to be released on May 3 by 09:00GMT for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, rose nearly 1 basis point to 0.021 percent, the yield on 30-year note surged 1-1/2 basis points to 0.666 percent and the yield on short-term 2-year traded tad higher at -0.595 percent.
JGBs: Japanese markets remain closed today.
AUS: Australian government bonds remained tad lower during Asian session Thursday, tracking a similar movement in the United States Treasuries after the Federal Reserve, in its monetary policy meeting, concluded yesterday, said that it foresees inflation disappointment as a temporary phenomenon, rather than a worrying signal for the world’s largest economy. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose nearly 1 basis point to 1.792 percent, the yield on the long-term 30-year bond hovered around 2.427 percent and the yield on short-term 2-year surged 1-1/2 basis points to 1.338 percent.
