Market Roundup
- EUR/USD 0.11%, USD/JPY 0.07%, GBP/USD 0.46%, EUR/GBP -0.34%
- DXY -0.13%, DAX 0.88%, FTSE 0.65%, Brent 1.02%, Gold -0.15%
- Tearful Theresa May resigns, paving way for Brexit confrontation with EU
- Bank of England says it is should be watching mortgage price war "like a hawk"
- China denounces U.S. "rumours" about Huawei ties to Beijing
- Japan more downbeat on growth; sees no change to tax hike plan
- Great Britain Apr Retail Sales MM, 0.0%, -0.3% f'cast, 1.1% prev, 1.2% r'vsd
- Great Britain Apr Retail Sales YY, 5.2%, 4.6% f'cast, 6.7% prev
- Great Britain Apr Retail Sales Ex-Fuel YY, 4.9%, 4.2% f'cast, 6.2% prev, 6.3% r'vsd
- Great Britain May CBI Distributive Trades, -2.7, 8 f'cast, 13 prev
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have decreased 2.0 percent in April after rising 2.8 percent in March, while non-defense capital goods orders excluding aircraft are likely to have declined 0.3 percent after gaining 1.0 percent the prior month.
- (0900 ET/1300 GMT) Mexico's national statistics agency is likely to report that first-quarter gross domestic product rose 1.3 percent from the year-ago period.
- (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- No Significant Event Scheduled
FX Beat
DXY: The dollar index slumped to a 1-week low, as U.S. manufacturing activity hit its lowest level in almost a decade in May, indicating a sharp slowdown in U.S. economic growth was underway. The greenback against a basket of currencies traded 0.1 percent down at 97.78, having touched a high of 98.37 on Thursday, its highest since May 2017. FxWirePro's Hourly Dollar Strength Index stood at -36.61 (Neutral) by 1000 GMT.
EUR/USD: The euro rallied to a 1-week peak after an exit poll showed the Labour party of European Commissioner Frans Timmermans won a surprise victory in a Dutch election for European Parliament. The European currency traded 0.1 percent up at 1.1193, having touched a low of 1.1107 on Thursday, its lowest since May 2017. FxWirePro's Hourly Euro Strength Index stood at 3.42 (Neutral) 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 rebounded from a 1-week low as risk sentiment slightly improved after President Donald Trump stated that U.S. complaints against Huawei Technologies Co Ltd might be resolved within the framework of a U.S.-China trade deal. However, the upside remains limited as escalating trade tensions and weak U.S. data fuelled rate cut expectations from the Fed. The major was trading 0.1 percent up at 109.68, having hit a high of 110.67 on Tuesday, its highest since May 7. FxWirePro's Hourly Yen Strength Index stood at 7.07 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. durable goods orders. Immediate resistance is located at 110.11 (May 11 High), a break above targets 110.67 (May 21 High). On the downside, support is seen at 109.01 (May 13 Low), a break below could take it lower at 108.80 (Jan. 30 Low).
GBP/USD: Sterling retreated from a 4-1/2 month low as British Prime Minister Theresa May is expected to announce the date of her departure, while investors remained concerned that the next prime minister will likely push for a more decisive Brexit deal. The major traded 0.4 percent up at 1.2709, having hit a low of 1.2605 on Thursday; it’s lowest since Jan. 3. FxWirePro's Hourly Sterling Strength Index stood at -38.08 (Neutral) 1000 GMT. Immediate resistance is located at 1.2757 (May 20 High), a break above could take it near 1.2827 (50.0% retracement of 1.3047 and 1.2605). On the downside, support is seen at 1.2570 (Dec. 17 Low) a break below targets 1.2529 (Dec. 14 Low). Against the euro, the pound was trading 0.2 percent up at 88.16 pence, having hit a low of 88.39 on Wednesday, it’s lowest since Feb. 14.
USD/CHF: The Swiss franc rallied to a 6-week peak, as concerns about the impact of U.S.-China trade dispute and fears of Britain’s disorderly exit from the European Union supported risk-off sentiment. The major trades 0.05 percent down at 1.0027, having touched a low of 1.0008; it’s lowest since Apr. 12. FxWirePro's Hourly Swiss Franc Strength Index stood at 54.64 (Bullish) by 1000 GMT. On the higher side, near-term resistance is around 1.0084 (Mar. 13 High) and any break above will take the pair to next level till 1.0124 (May 7 High). The near-term support is around 1.0000, and any close below that level will drag it till 0.9977 (Apr. 8 Low).
Equities Recap
European shares rebounded after President Donald Trump stated that U.S. complaints against Huawei Technologies could be resolved within the broader trade framework.
The pan-European STOXX 600 index surged 0.7 percent at 376.26 points, while the FTSEurofirst 300 index rallied 0.8 percent to 1,483.10 points.
Britain's FTSE 100 trades 0.7 percent up at 7,279.31 points, while mid-cap FTSE 250 gained 0.4 to 19,111.64 points.
Germany's DAX rose 0.7 percent at 12,038.79 points; France's CAC 40 trades 0.8 percent higher at 5,321.96 points.
Commodities Recap
Crude oil prices rebounded from multi-week lows but were on track for their biggest weekly loss this year amid increasing inventories and fears over an economic slowdown. International benchmark Brent crude was trading 0.8 percent higher at $68.46 per barrel by 0955 GMT, having hit a low of $66.99 on Thursday, its lowest since Mar, 28. U.S. West Texas Intermediate was trading 0.7 percent up at $58.55 a barrel, after falling as low as $57.32 on Thursday, its lowest since the Mar. 13.
Gold prices steadied near a 1-week peak touched in the previous session as weak U.S. data dragged the greenback lower and reignited hopes of a rate cut by the Federal Reserve this year. Spot gold was trading flat at $1,281.60 per ounce by 0958 GMT, having touched a high of $1,287.23 on Thursday, its highest since May 17 and has risen 0.5 percent so far this week. U.S. gold futures for June were down 0.2 percent at 1,283.10.
Treasuries Recap
The U.S. Treasuries slumped during the afternoon session, following a little support from comments from President Donald Trump that a trade deal with China is still a “good possibility” and that Huawei might be addressed in any new agreement. Investors shall be keeping a close eye on the country’s preliminary estimate of durable goods orders figures for April, due to be released today at 12:30GMT, for further light on the debt market. The yield on the benchmark 10-year Treasury yield jumped nearly 3-1/2 basis points to 2.329 percent, the super-long 30-year bond yields surged nearly 3 basis points to 2.760 percent and the yield on the short-term 2-year traded 3-1/2 basis points higher at 2.164 percent.
The United Kingdom’s gilts suffered during European session ahead of Prime Minister Theresa May’s departure from the Cabinet on June 7 amid a better-than-expected reading of the country’s retail sales for the month of April, released early today. The yield on the benchmark 10-year gilts, jumped 2 basis points to 0.973 percent, the super-long 30-year bond yields also surged 2 basis points to 1.536 percent and the yield on the short-term 2-year traded nearly 2 basis points higher at 0.659 percent.
The Japanese 10-year government bond yield fell to 7-week low at the time of close tracking a similar movement in the United States Treasuries as investor sentiments remained dusted on worries over global economic slowdown amid ongoing trade tussle between the U.S. and China. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 7 basis points to -0.069 percent, the yield on the long-term 30-year slipped 1-1/2 basis points to 0.500 percent and the yield on short-term 2-year slumped 15-1/2 basis points to -0.155 percent.
The Australian government bond yields plunged during Asian session of the last trading day of the week tracking the United States 10-year counterpart which fell to its lowest since 2017, following deepening angst among the investors over a longer period of trade battle with China. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 5 basis points to 1.535 percent, the yield on the long-term 30-year bond slumped 4 basis points to 2.194 percent and the yield on short-term 2-year plummeted 5-1/2 basis points to 1.108 percent.
