Market Roundup
- EUR/USD -0.0.2%, USD/JPY -0.1%, GBP/USD 0.19%, EUR/GBP -0.19%
- DXY -0.03%, DAX -0.6%, FTSE -0.34%, Brent 0.46%, Gold -0.07%
- U.S., China bicker over 'extravagant expectations' on trade deal
- Germany Apr Producer Prices MM, 0.5%, 0.3% f'cast, -0.1% prev
- Germany Apr Producer Prices YY, 2.5%, 2.4% f'cast, 2.4% prev
- Sterling rises off 5-month lows after biggest weekly drop this year
- Short-lived spike for AUD after shock election win
- Oil rises after OPEC+ says to keep output cuts
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of April. The index stood at -0.15 in the prior month.
Key Events Ahead
- (0930 ET/1330 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on the economic outlook before the Management Science 65th Anniversary Conference in Boston
- (1230 ET/1630 GMT) BoE Deputy Governor Ben Broadbent speaks on "Investment and the duration of uncertainty" at Imperial College Business School in London
- (1300 ET/1700 GMT) Federal Reserve Bank of New York President John Williams is scheduled to give welcome remarks, followed by participation in a discussion, "Review of Monetary Policy Strategy, Tools and Communications" before a two-hour "Fed Listens" Roundtable, hosted by the Federal Reserve Bank of New York, in New York.
- (1305 ET/1705 GMT) Federal Reserve Vice Chairman Richard Clarida is likely to give opening remarks at the event.
- (1900 ET/2300 GMT) Federal Reserve Board Chair Jerome Powell is scheduled to speak on "Assessing Risks to our Financial System" at an Atlanta Federal Reserve Bank conference.
FX Beat
DXY: The dollar index consolidated near a 2-week peak as investors cautious awaited Federal Reserve Board Chair Jerome Powell's speech that could provide further clues on the U.S. monetary policy outlook. The greenback against a basket of currencies traded flat at 98.00, having touched a high of 98.04 earlier, its highest since May 3. FxWirePro's Hourly Dollar Strength Index stood at 53.60 (Bullish) by 1000 GMT.
EUR/USD: The euro plunged to a 2-week low after data showed German producer price index rose at an annualized rate of 2.5 percent in April, below estimates of 2.7 percent rise. Moreover, concerns about this week's European parliamentary elections and comments from Italian Deputy Prime Minister Matteo Salvini undermined the bid tone around the major. The European currency traded 0.05 percent down at 1.1154, having touched a low of 1.1150 earlier, its lowest since May 3. FxWirePro's Hourly Euro Strength Index stood at -86.76 (Slightly Bearish) by 1000 GMT. Immediate resistance is located at 1.1218 (May 7 High), a break above targets 1.1262 (April 22 High). On the downside, support is seen at 1.1118 (April 25 Low), a break below could drag it below 1.1100.
USD/JPY: The dollar turned negative after rising to a near 2-week peak earlier in the day, as China accused the United States of harboring extravagant expectations for a trade deal. The major was trading 0.1 percent down at 109.91, having hit a high of 110.31, its highest since May 7. FxWirePro's Hourly Yen Strength Index stood at 40.15 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the Chicago Fed National Activity index, and speeches by Fed's Clarida and Powell. Immediate resistance is located at 110.67 (61.8% retracement of 111.68 and 109.01), a break above targets 111.11 (78.6% retracement). On the downside, support is seen at 109.47 (May 10 Low), a break below could take it lower at 109.01 (May 14 Low).
GBP/USD: Sterling rebounded from a 4-month low hit in the previous session after Prime Minister Theresa May, on Sunday, stated that she would make a new offer to British lawmakers in a final attempt to secure a Brexit deal through parliament before she leaves the office. The major traded 0.2 percent up at 1.2737, having hit a low of 1.2711 on Friday; it’s lowest since Jan. 15. FxWirePro's Hourly Sterling Strength Index stood at -111.70 (Highly Bearish) 0500 GMT. Investors’ attention will remain on the U.S. fundamental drivers, ahead of BoE Broadbent's speech. Immediate resistance is located at 1.2823 (23.6% retracement of 1.3176 and 1.2711), a break above could take it near 1.2890 (38.2% retracement). On the downside, support is seen at 1.2709 (Jan. 11 Low), a break below targets 1.2668 (Jan. 15 Low). Against the euro, the pound was trading 0.2 percent up at 87.56 pence, having hit a low of 87.78 on Friday, it’s lowest since Feb. 15.
USD/CHF: The Swiss franc edged higher, retreating from a 10-day low, amid growing concerns about escalating fallout from a U.S. crackdown on China's Huawei Technologies. The major trades 0.2 percent down at 1.0093, having touched a high of 1.0121 earlier; it’s highest since May 10. FxWirePro's Hourly Swiss Franc Strength Index stood at 156.22 (Highly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 1.0159 (Apr. 18 High) and any break above will take the pair to next level till 1.0196 (May 6 High). The near-term support is around 1.0032 (Apr. 16 Low), and any close below that level will drag it till 1.0000.
Equities Recap
European shares slumped, weighed down by losses in airline and travel stocks, while sterling steadied above a 4-month low amid Brexit deal hopes.
The pan-European STOXX 600 index tumbled 0.6 percent at 379.18 points, while the FTSEurofirst 300 index fell 0.8 percent to 1,489.17 points.
Britain's FTSE 100 trades 0.8 percent down at 7,290.06 points, while mid-cap FTSE 250 eased 0.7 to 19,356.43 points.
Germany's DAX declined 0.9 percent at 12,120.08 points; France's CAC 40 trades 1.1 percent lower at 5,379.87 points.
Commodities Recap
Crude oil prices rallied to 3-week highs after OPEC indicated it was likely to maintain production cuts that have helped boost prices this year. International benchmark Brent crude was trading 0.6 percent higher at $72.44 per barrel by 1025 GMT, having hit a high of $73.39 earlier, its highest since Apr, 26. U.S. West Texas Intermediate was trading 0.2 percent up at $62.80 a barrel, after rising as high as $63.79, its highest since the May 1.
Gold prices slumped to an over 2-week trough as strong U.S. economic data underpinned the dollar, driving investors out of safe-haven assets. Spot gold was trading 0.2 percent down at $1,274.54 per ounce by 1028 GMT, having touched a low of $1,273.56 earlier, its lowest since May 3. U.S. gold futures edged 0.1% higher at $1,276.50 an ounce.
Treasuries Recap
The U.S. Treasury yields remained flat during the afternoon session, ahead of the Federal Open Market Committee’s (FOMC) Chairman Jerome Powell’s speech, scheduled to be held today at 23:00GMT, besides, a host of speeches by members Clarida and Williams as well. The yield on the benchmark 10-year Treasury yield hovered around 2.389 percent, the super-long 30-year bond yields traded flat at 2.821 percent and the yield on the short-term 2-year also traded steady at 2.204 percent.
The German bunds remained flat during European trading session ahead of a speech by European Central Bank (ECB) President Mario Draghi, scheduled to be held on May 22 by 07:30GMT and the country’s gross domestic product (GDP) data for the first quarter of this year, due to be released on May 23, amid an otherwise muted trading session that witnessed data of little economic significance. The German 10-year bond yields, which move inversely to its price, traded flat at -0.100 percent, the yield on 30-year note hovered around 0.547 percent and the yield on short-term 2-year too remained steady at -0.646 percent.
The Australian government bonds plunged during Asian trading session Monday amid a muted trading session that witnessed data of little economic significance, ahead of the Reserve Bank of Australia’s (RBA) May monetary policy meeting minutes, scheduled to be released on May 21 by 01:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 4 basis points to 1.689 percent, the yield on the long-term 30-year bond also surged nearly 4 basis points to 2.331 percent and the yield on short-term 2-year traded nearly 3-1/2 basis points higher at 1.266 percent.
