Menu

Search

  |   Market Roundups

Menu

  |   Market Roundups

Search

Europe Roundup: Sterling halts 4-day losing streak on better-than-expected UK GDP figures, yen off highs on U.S.-China trade deal hopes, European shares rebound - Friday, May 10th, 2019

Market Roundup

  • EUR/USD 0.09%, USD/JPY 0.06%, GBP/USD 0.01%, EUR/GBP 0.14%
     
  • DXY -0.03%, DAX 0.88%, FTSE 0.46%, Brent 0.37%, Gold 0.10%
     
  • U.S. escalates trade war amid negotiations, China says will hit back
     
  • Great Britain Q1 GDP Prelim YY, 1.8%, 1.8% f'cast, 1.4% prev
     
  • Great Britain Mar Goods Trade Balance (GBP), -13.65 bln, -13.80 bln f'cast, -14.11 bln prev, -14.43 bln rvsd
     
  • Great Britain Mar Industrial Output YY, 1.3%, 0.5% f'cast, 0.1% prev, 0.4% rvsd
     
  • Great Britain Mar Manufacturing Output YY, 2.6%, 1.3% f'cast, 0.6% prev, 1.2% rvsd
     
  • Great Britain Q1 Business Invest QQ Prelim, 0.5%, -0.6% f'cast, -0.9% prev
     
  • UK's Hammond says economy "robust" after latest GDP data
     
  • Germany Mar Trade Balance SA (EUR), 20.0 bln, 18.2 bln f'cast, 18.7 bln prev
     
  • Germany Mar Exports MM SA, 1.5%, -0.3% f'cast, -1.3% prev, -1.2% rvsd
     

Economic Data Ahead

  • (0830 ET/1230 GMT) The U.S. consumer price index likely increased 0.4 percent in April after posting similar gains in March, while in the 12 months through April, the CPI is expected to have risen 2.1 percent. Excluding food and energy, the core CPI probably rose 0.2 percent, after rising 0.1 percent in the previous month.
     
  • (0830 ET/1230 GMT) Statistics Canada is likely to report that building permits rose 2.8 percent in March, after dropping 5.7 percent in February.
     
  • (0830 ET/1230 GMT) Statistics Canada releases the employment report for April. The economy probably added 10,000 jobs, after losing 7,200 jobs in March, while the participation rate is expected to remain unchanged at 65.7 percent.
     
  • (0830 ET/1230 GMT) Canada's unemployment rate is expected to stay unchanged at 5.8 percent for the month of April.
     
  • (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count. 
     
  • (1400 ET/1800 GMT) The U.S. reports its monthly budget statement for the month of April. The government is likely to show a budget surplus of $165 billion after posting a deficit of $147 billion in the previous month.
     

Key Events Ahead

  • (0830 ET/1230 GMT) Federal Reserve Board Governor Lael Brainard speaks at Federal Reserve System Community Development Research Conference in Washington, D.C.
     
  • (0908 ET/1308 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic speaks on the economic outlook and monetary policy in Meridian, Mississippi
     
  • (1000 ET/1400 GMT) Federal Reserve Bank of New York President John Williams speaks before the 21st Annual Bronx Bankers' Breakfast in Bronx, New York
     
  • (1030 ET/1430 GMT) ECB board member Benoit Coeure participates in a panel discussion at G7 2019 Conference in Paris
     

FX Beat

DXY: The dollar index declined, hovering towards a 1-week low recorded the day before, amid growing fears that any escalation in the trade conflict between the United States and China would force U.S. policymakers to cut interest rates. The greenback against a basket of currencies traded 0.1 percent down at 97.34, having touched a low of 97.24 on Thursday, its lowest since May 1. FxWirePro's Hourly Dollar Strength Index stood at -84.17 (Slightly Bearish) by 1000 GMT

EUR/USD: The euro rose, extending gains for the third straight session and is poised for a second consecutive week of gains after data showed German exports rose unexpectedly in March, raising hopes that a slowdown in Germany's economy will not significantly dent growth in the first quarter. The European currency traded 0.1 percent up at 1.1228, having touched a high of 1.1251 on Thursday, its highest since May 1. FxWirePro's Hourly Euro Strength Index stood at 45.98 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1262 (April 22 High), a break above targets 1.1304 (April 18 High). On the downside, support is seen at 1.1187 (May 1 Low) a break below could drag it till 1.1140 (April 24 Low).

USD/JPY: The Japanese yen slightly eased after rising to a 3-month peak in the previous session as the United States escalated a tariff war with China by hiking levies to 25 percent for $200 billion worth of Chinese goods, while Beijing threatened retaliation. The major was trading 0.1 percent up at 109.85, having hit a low of 109.47 the day before, its lowest since Feb. 4. FxWirePro's Hourly Yen Strength Index stood at 98.51 (Slightly Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. consumer price index, monthly budget statement and speeches by Fed's Brainard and Bostic. Immediate resistance is located at 110.32 (38.2% retracement of 111.68 and 109.47), a break above targets 110.84 (61.8% retracement). On the downside, support is seen at 109.47 (May 9 Low), a break below could take it lower at 109.13 (Jan. 29 Low).

GBP/USD: Sterling rose, halting a 4-day losing streak after data showed Britain's economy grew at a quarterly rate of 0.5 percent in the first quarter of 2019, in line with the reading expected by the Bank of England. However, doubts that Prime Minister Theresa May can reach a deal with the opposition on how to leave the European Union limited upside. The major traded 0.2 percent up at 1.3019, having hit a low of 1.2967 on Thursday; it’s lowest since Apr. 30. FxWirePro's Hourly Sterling Strength Index stood at -78.05 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.3066 (5-DMA), a break above could take it near 1.3132 (Apr. 12 High). On the downside, support is seen at 1.2976 (Mar. 29 Low), a break below targets 1.2923 (Apr. 30 Low). Against the euro, the pound was trading 0.1 percent down at 86.26 pence, having hit a low of 86.48 on Thursday, it’s lowest since Apr. 30.

USD/CHF: The Swiss franc rose, hovering towards a 1-week peak hit in the prior session, as investors rushed into safe-haven assets on worries that a rift over trade between the United States and China could deepen if talks between the two economies fail to reach a deal. The major trades 0.2 percent down at 1.0132, having touched a low of 1.0123 on Thursday; it’s lowest since May 1. FxWirePro's Hourly Swiss Franc Strength Index stood at 126.91 (Highly Bullish) 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 1.0196 (May 6 High). The near-term support is around 1.0120, and any close below that level will drag it till 1.0100.

Equities Recap

European shares rebounded from a 6-week low, as investors hope that the United States and China would still be able to resolve their trade dispute.

The pan-European STOXX 600 index surged 0.7 percent at 378.60 points, while the FTSEurofirst 300 index rallied 0.7 percent to 1,488.19 points.

Britain's FTSE 100 trades 0.4 percent up at 7,239.39 points, while mid-cap FTSE 250 gained 0.8 to 19,447.34 points.

Germany's DAX rose 1.1 percent at 12,100.38 points; France's CAC 40 trades 0.8 percent higher at 5,354.47 points.

Commodities Recap

Crude oil prices surged despite U.S. President Donald Trump's tariff hike on $200 billion of Chinese goods kept tensions high in the trade dispute between both the economies. International benchmark Brent crude was trading 0.7 percent higher at $70.72 per barrel by 1023 GMT, having hit a low of $68.82 on Monday, its lowest since Apr, 3. U.S. West Texas Intermediate was trading 0.6 percent up at $61.96 a barrel, after falling as low as $60.02 on Monday, its lowest since the Mar, 29.

Gold prices rose, extending previous session gains, supported by increased trade tensions as U.S. President Donald Trump's tariff increase on $200 billion worth of Chinese goods took effect. Spot gold was trading 0.2 percent up at $1,285.37 per ounce by 1025 GMT, having touched a high of $1,291.36 on Wednesday, its highest since Apr. 15  and was up about 0.4 percent for the week. U.S. gold futures were also firm at $1,285 an ounce.

Treasuries Recap

The 10-year U.S. Treasuries yield stood at 2.454 percent near its lowest levels since late March, while the 3-month bill yields stood at 2.456 percent.

The German 10-year government bond yields headed for their biggest weekly fall in seven weeks, amid renewed U.S.-China trade tensions. German two-year bond yields are close to their lowest levels since the start of 2019 and long-dated Dutch yields were also set for their biggest falls in six weeks.

The Japanese government bond prices edged up, with the five-year JGB yield and the 10-year yield both easing half a basis point to minus 0.170 percent and minus 0.055 percent, respectively. In the super-long zone, the 30-year yield dipped 0.5 basis point to 0.530 percent, while the 40-year yield was also off half a basis point at 0.555 percent. Ten-year JGB futures ticked up 0.05 point to 152.81.

The Australian bond futures held near record highs, with the three-year contract steady at 98.745 and the 10-year off one tick at 98.2650. The New Zealand two-year yields were at 1.44 percent, up from an all-time low of 1.338 percent touched on Wednesday.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.