Market Roundup
- EUR/USD -0.07%, USD/JPY -0.32%, GBP/USD -0.49%, EUR/GBP 0.41%
- DXY 0.06%, DAX -2.17%, FTSE 0.40%, Brent -1.17%, Gold 0.23%
- China trade team still going for talks after Trump cranks up pressure
- China gives modest boost to economy with RRR cut amid renewed trade tensions
- EZ Apr Markit Comp Final PMI, 51.5, 51.3 f'cast, 51.3 prev
- EZ Apr Markit Serv Final PMI, 52.8, 52.5 f'cast, 52.5 prev
- EZ May Sentix Index, 5.3, 1.4 f'cast, -0.3 prev
- EZ Mar Retail Sales YY, 1.8% f'cast, 2.8% prev
- Germany Apr Markit Serv Final PMI, 55.7, 55.6 f'cast, 55.6 prev
- France Apr Markit Serv PMI, 50.5, 50.5 f'cast, 50.5 prev
- Italy Apr Markit/IHS Serv PMI, 50.4, 52.0 f'cast, 53.1 prev
- Oil prices slump after Trump's tariff threat against China
- Showdown looms between Congress and attorney general over Mueller report deadline
- Trump's former lawyer Cohen to report to prison for hush payments
Economic Data Ahead
- (1000 ET/1400 GMT) U.S. Apr Employment Trends, 111.0 previous
Key Events Ahead
- (0930 ET/1330 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on the economic outlook before the 37th Annual Monetary and Trade Conference hosted by the Drexel University LeBow College of Business in Philadelphia
- (1100 ET/1500 GMT) ECB Chief Economist Peter Praet in conversation with the Financial Times in Frankfurt, Germany
- (1330 ET/1730 GMT) Bank of Canada Governor Stephen Poloz will hold speech at the Canadian Credit Union Association and Winnipeg Chamber of Commerce
FX Beat
DXY: The dollar index rose, having fallen from a 1-week peak in the prior session after Trump announced he would raise U.S. tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon. The greenback against a basket of currencies traded 0.1 percent up at 97.56, having touched a high of 98.10 on Friday, its highest since April 26. FxWirePro's Hourly Dollar Strength Index stood at 12.62 (Neutral) by 1000 GMT.
EUR/USD: The euro eased, hovering towards a 1-week low touched in the previous session after data showed weakness in the manufacturing sector is increasingly affected the bloc's dominant services industry. The European currency traded 0.1 percent down at 1.1192, having touched a low of 1.1135 on Friday, its lowest since Apr. 26. FxWirePro's Hourly Euro Strength Index stood at 10.91 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1229 (April 30 high), a break above targets 1.1262 (April 22 High). On the downside, support is seen at 1.1140 (April 24 Low) a break below could drag it till 1.1096 (May. 2017 Low).
USD/JPY: The Japanese yen rallied to a 4-1/2 week peak after U.S. President Donald Trump threatened to raise tariffs on China. The pair attempted a minor recovery on news that China Vice-Premier Liu He would travel to Washington on Thursday after a delay, rather than cancelling planned talks altogether. The major was trading 0.3 percent down at 110.76, having hit a low of 110.28 earlier, its lowest since Mar. 28. FxWirePro's Hourly Yen Strength Index stood at 53.14 (Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 111.07 (Feb. 27 High), a break above targets 111.46 (Mar. 12 High). On the downside, support is seen at 110.01 (Mar.28 Low), a break below could take it lower at 109.70 (Mar. 25 Low).
GBP/USD: Sterling declined from a 1-month peak hit in the previous session amid persisting uncertainty surrounding Britain's departure from the European Union. Trading is likely to remain subdued as UK markets remain closed on account of Early May Bank holiday. The major traded at 0.5 percent down 1.3106, having hit a high of 1.3176 on Friday; it’s highest since Apr. 4. FxWirePro's Hourly Sterling Strength Index stood at 45.84 (Neutral) 1000 GMT. Immediate resistance is located at 1.3223 (Mar. 22 High), a break above could take it near 1.3269 (Mar. 29 High). On the downside, support is seen at 1.3080 (Mar. 22 Low), a break below targets 1.3022 (Apr. 8 Low). Against the euro, the pound was trading 0.5 percent down at 85.38 pence, having hit a high of 84.88, it’s highest since Mar. 27.
USD/CHF: The Swiss franc retreated from a 5-day peak, as the greenback gained across the board after Trumps threatened China with higher and more tariffs. The major trades 0.2 percent up at 1.0186, having touched a high of 1.0214 on Friday; it’s highest since Apr. 29. FxWirePro's Hourly Swiss Franc Strength Index stood at 19.00 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0248 (Jan. 11 2017 High) and any break above will take the pair to next level till 1.0280 (Dec. 29, 2016, High). The near-term support is around 1.0130 (April 19 Low), and any close below that level will drag it till 1.0100.
Equities Recap
European shares tumbled as investors rushed for safety in safe-haven assets after U.S. President Donald Trump threatened to raise tariffs on China.
The pan-European STOXX 600 index slumped 1.5 percent at 384.65 points, while the FTSEurofirst 300 index plunged 1.5 percent to 1,511.91 points.
Germany's DAX declined 1.9 percent at 12,170.69 points; France's CAC 40 trades 2.05 percent lower at 5,436.36 points.
Commodities Recap
Crude oil prices plunged after U.S. President Donald Trump said he would sharply raise tariffs on Chinese goods this week. International benchmark Brent crude was trading 0.6 percent lower at $70.38 per barrel by 1059 GMT, having hit a low of $68.82 earlier, its lowest since Apr, 3. U.S. West Texas Intermediate was trading 0.9 percent down at $61.25 a barrel, after falling as low as $60.02 earlier, its lowest since the Mar, 29.
Gold prices rose after U.S. President Donald Trump threatened to raise tariffs on Chinese goods, escalating Sino-U.S. trade tensions. Spot gold was 0.2 percent up at $1,281.50 per ounce by 1104 GMT, having touched a high of $1,285.73 earlier, its highest since May 1. U.S. gold futures gained 0.2 percent to $1,283.20 an ounce.
Treasuries Recap
The U.S. Treasuries remained tad higher during the afternoon session, after investors shifted toward safe-haven assets following President Donald Trump’s increased pressure on China on Sunday to reach a trade agreement, threatening to raise tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent as of Friday, unless any further progress is made at the trade meetings scheduled for later this week. The yield on the benchmark 10-year Treasury yield slipped nearly 1 basis point to 2.523 percent, the super-long 30-year bond yields edged tad 1 basis points lower to 2.916 percent and the yield on the short-term 2-year hovered around 2.347 percent.
The German bunds gained during European trading session after investors have largely shrugged-off the better-than-expected rise in the country’s services PMI for the month of April, released today, with eyes on the March industrial production data, scheduled for release on May 7 by 06:00GMT, for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, slipped 1 basis point to 0.011 percent, the yield on 30-year note hovered around 0.663 percent and the yield on short-term 2-year traded tad lower at -0.604 percent.
The Australian 10-government bond yield plunged to over 1-month low on the first trading day of the week amid lingering reports that China is considering to cancel all trade talks with the United States scheduled for this week, thus boosting safe-haven prices and taking a bow on equities. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 5 basis points to 1.742 percent, the yield on the long-term 30-year bond slumped nearly 5-1/2 basis points to 2.362 percent and the yield on short-term 2-year traded nearly 3-1/2 basis points lower at 1.299 percent.
