Market Roundup
- EUR/USD -0.06%, USD/JPY 0.19%, GBP/USD -0.18%, EUR/GBP 0.16%
- DXY 0.11%, DAX 1.07%, FTSE 0.23%, Brent -1.91%, Gold 0.03%
- Germany Ifo Business Climate New, 102.2, 102.0 forecast, 102.1 previous
- Germany Ifo Curr Conditions New, 106.0, 105.5 forecast, 105.7 previous
- Great Britain GDP 2nd Release YY, 1.2%, 1.2% forecast, 1.2% previous
- Great Britain Business Invest YY Prelim, 2%, 2.6% previous
- Italy Flash Trd Bal Non-EU, 1.86 bln
- UK Finance Mortgage Apps, 38.049k, 37.567k previous
- North Korea says it's still open to talks after Trump cancels summit
- Early ECB bank loan repayments loom, threaten to raise borrowing costs
- U.S. Commerce's Ross to visit China for trade talks in early June
- OPEC, Russia discuss raising oil output by about 1 mln bpd - sources
- China Inc tightens reins on debt, raises spectre of slowdown
- Turkish lira recovers on the day, central bank takes move on corporate forex
- Gold holds above $1,300 after Trump ditches North Korea summit
- Oil prices slump as Saudi Arabia and Russia consider output boost
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have decreased 1.4 percent in April after rising 2.6 percent in March, while non-defense capital goods orders excluding aircraft are likely to have risen 0.7 percent after falling 0.9 percent the prior month.
- (1000 ET/1400 GMT) The University of Michigan is likely to report that U.S. consumer sentiment index rose to 98.8 in May after posting a similar reading in April.
- (1100 ET/1500 GMT) Canada releases budget balance for the month of March. The government posted a surplus of C$2.83 billion in the previous month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0815 ET/1215 GMT) Bank of England's Governor Mark Carney: Panelist at the Riksbank Anniversary Conference
- (0920 ET/1320 GMT) Federal Reserve Chairman Jerome Powell participates in panel, "Financial Stability and Central Bank Transparency" before the Sveriges Riksbank Conference, Stockholm
- (0940 ET/1340 GMT) Eurepean Central Bank's Benoit Coeure participates in a high-level panel at Sveriges Riksbank's 350th anniversary celebration in Stockholm
- (1145 ET/1545 GMT) Fed's Bostic, Evans and Kaplan participate in "Session VIII: Policymaker Panel" before the Federal Reserve Banks of Dallas and Atlanta "Technology-Enabled Disruption: Implications for Business, Labor Markets and Monetary Policy" conference.
- (1430 ET/1830 GMT) Federal Reserve Bank of Dallas President Robert Kaplan is scheduled to give closing remarks at the "Technology-Enabled Disruption: Implications for Business, Labor Markets and Monetary Policy" conference, in Dallas.
- (1520 ET/1920 GMT) Bundesbank president Jens Weidmann speaks in Stockholm
FX Beat
DXY: The dollar index consolidated near 5-month highs as investors awaited the Federal Reserve’s Chair Jerome Powell’s speech for fresh clues on the U.S. monetary policy outlook. The greenback against a basket of currencies trades 0.05 percent up at 93.82, having touched a high of 94.19 on Wednesday, its highest since Dec. 12. FxWirePro's Hourly Dollar Strength Index stood at 15.93 (Neutral) by 1000 GMT.
EUR/USD: The euro eased despite data showing German business confidence steadied in May after falling for five straight months, indicating that executives in European companies are being optimistic in spite of the possible global trade war. Moreover, concerns over Italy's debt outlook intensified the selling pressure around the major. The European currency traded 0.1 percent down at 1.1710, having touched a low of 1.1675 on Wednesday, its lowest since Nov. 14. FxWirePro's Hourly Euro Strength Index stood at -63.90 (Bearish) by 1000 GMT. Immediate resistance is located at 1.1751 (5-DMA), a break above targets 1.1829 (May 22 High). On the downside, support is seen at 1.1669 (Oct. 10 Low), a break below could drag it till 1.1622 (Nov. 10 Low).
USD/JPY: The dollar rebounded from a 2-week low after North Korea Vice Foreign Minister Kim Kye Gwan said that the nation was still open to resolving issues with the United States. Additionally, an uptick in the U.S. Treasury bond yields and softer than expected Japan's Core CPI print provided an additional boost to the pair. The major was trading 0.2 percent up at 109.45, having hit a low of 108.95 on Thursday, its lowest since May 8. FxWirePro's Hourly Yen Strength Index stood at 155.38 (Highly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. durable goods, Michigan consumer sentiment index and Fed officials' speeches. Immediate resistance is located at 110.24 (10-DMA), a break above targets 110.50. On the downside, support is seen at 108.99 (May 9 Low), a break below could take it lower 108.64.
GBP/USD: Sterling slumped as declining business investment and the weakest household spending growth in more than three years raised doubts whether the Bank of England will raise interest rates this year. Britain's business investment dropped 0.2 percent quarter-on-quarter in the first three months of 2018, while the economy grew just 0.1 percent between January and March. Sterling traded 0.2 percent down at 1.3358, having hit a low of 1.3305 on Wednesday, it’s lowest since Dec. 12. FxWirePro's Hourly Sterling Strength Index stood at -124.55 (Highly Bearish) by 1000 GMT. Immediate resistance is located at 1.3462 (10-DMA), a break above could take it near 1.3548 (21-DMA). On the downside, support is seen at 1.3305 (May 23 Low), a break below targets 1.3270. Against the euro, the pound was trading 0.2 percent down at 87.74 pence, having hit a low of 87.96 pence on Wednesday, it’s lowest since May 15.
USD/CHF: The Swiss franc eased, retreating from an over 3-week peak hit in the prior session, as the greenback held gains near 5-month highs. The major trades 0.05 percent up at 0.9920, having touched a low of 0.9885 on Thursday, it’s lowest since Apr. 30. FxWirePro's Hourly Swiss Franc Strength Index stood at -18.87 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9979 (10-DMA) and any break above will take the pair to next level till 1.0018 (May 18 High). The near-term support is around 0.9871 and any close below that level will drag it till 0.9820.
Equities Recap
European shares rebounded in early deals but were on course for their first weekly decline since March as worries over global trade talks and Italy's government hurt investor risk sentiment.
The pan-European STOXX 600 index gained 0.5 percent at 392.49 points, while the FTSEurofirst 300 index surged 0.6 percent to 1,537.37 points.
Britain's FTSE 100 trades 0.3 percent up at 7,738.12 points, while mid-cap FTSE 250 rallied 0.6 percent to 21,110.61 points.
Germany's DAX rose 0.9 percent at 12,977.25 points; France's CAC 40 trades 0.6 percent higher at 5,580.05 points.
Commodities Recap
Crude oil prices declined over 1 percent to a 1-week low as OPEC and Russia considered easing supply curbs to offset disruptions in Venezuela. International benchmark Brent crude was trading 1.9 percent down at $77.28 per barrel by 0943 GMT, having hit a low of $77.09 earlier, its lowest since May 14. U.S. West Texas Intermediate was trading 1.5 percent down at $69.58 a barrel, after falling as low as $69.54, its lowest since May 8.
Gold prices consolidated near 10-day high hit in the previous session as U.S. President Donald Trump's decision to call off a meeting with North Korean leader Kim Jong Un boosted safe-haven demand. Spot gold trades flat at $1,304.60 per ounce at 0946 GMT, having hit a high of $1,306.50 on Thursday, its highest price level since May 15. and was on track for a weekly gain. U.S. gold futures for June delivery fell 0.2 percent to $1,301.40 per ounce.
Treasuries Recap
The U.S. Treasuries remained tad higher ahead of the Federal Reserve’s Chair Jerome Powell’s speech, coupled with a host of FOMC speeches through the day, as well namely Evans, Bostic and Kaplan. The yield on the benchmark 10-year Treasuries remained slipped nearly 1-1/2 basis points to 2.96 percent, the super-long 30-year bond yields also dipped close to 1-1/2 basis points to 3.11 percent and the yield on the short-term 2-year traded tad lower at 2.50 percent.
The German bunds gained during European session as investors have shrugged off the higher-than-expected Ifo business climate index for the month of April, released today. The German 10-year bond yields, which move inversely to its price, slumped 2 basis points to 0.44 percent, the yield on 30-year note also fell nearly 2 basis points to 1.16 percent and the yield on short-term 3-year traded 1 basis point lower at -0.52 percent.
The New Zealand bonds closed higher as investors tilted towards safe-haven assets, following a rise in ongoing global uncertainties after United States President Donald Trump canceled an upcoming summit with North Korean leader Kim-Jon-Un that sparked fears of a heightened disturbance in financial markets. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped 3 basis points to 2.77 percent, the yield on the long-term 20-year note slipped 1 basis point to 3.28 percent and the yield on short-term 2-year also closed 1 basis point lower at 1.87 percent.
The Japanese government bonds gained during late Asian session on a rise in risk aversion after the United States’ President Donald Trump called off the talks with North Korea amid a continued decline in the Turkish Lira that added fuel to the ongoing global uncertainties. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad lower at 0.04 percent, the yield on the long-term 30-year note slipped 1/2 basis point to 0.74 percent and the yield on short-term 2-year hovered around -0.13 percent.
The Australian government bonds rallied on last trading day of the week, with persistent global trade worries compounded when Washington suddenly canceled a nuclear summit with North Korea, pushing the 10-year bond yield to a 1-week low. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 1-1/2 basis points to 2.792 percent, the yield on the long-term 30-year Note also dipped 1-1/2 basis points to 3.295 percent and the yield on short-term 2-year down 1 basis point to 2.012 percent.
