Market Roundup
- EUR/USD -0.06%, USD/JPY -0.07%, GBP/USD 0.11%, EUR/GBP -0.18%
- DXY 0.09%, DAX -0.14%, FTSE 0.18%, Brent -1.47%, Gold -0.24%
- Italy's PM-designate Cottarelli says accepts mandate to form a government ahead of elections.
- Italy's PM-designate says elections seen at the beginning of next year
- Italy's PM-designate says if doesn't win confidence, elections will be after August
- Italy's PM-designate says his government would ensure prudent management of Italy's finances
- S.Korea calls for more impromptu talks with N.Korea as U.S. prepares for summit
- Spanish Prime Minister Rajoy faces growing election calls
- Turkish cenbank governor signal on monetary policy boosts lira
- Independent Scotland would not join euro – Sturgeon
- Germany seeking deal to end EU-U.S. trade dispute
- Oil sinks further as OPEC and Russia look to raise output
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index rallied to a fresh near 7-month peak as investors awaited Federal Reserve Bank of St. Louis President James's speech scheduled on Tuesday and the U.S. Non-Farm Payrolls due on Friday. The greenback against a basket of currencies trades flat at 94.25, having touched a high of 94.31 earlier, its highest since Dec. 14. FxWirePro's Hourly Dollar Strength Index stood at -5.31 (Neutral) by 1000 GMT.
EUR/USD: The euro slumped to a fresh 6-1/2 month low as Italy's President Sergio Mattarella is likely to ask a former International Monetary Fund official to head a stopgap government amidst political and constitutional turmoil. However, news that Italy's anti-establishment 5-Star and League parties abandoned plans to form a government limited the downside. The European currency traded 0.05 percent down at 1.1641, having touched a low of 1.1639 earlier, its lowest since Nov. 13. FxWirePro's Hourly Euro Strength Index stood at -129.87 (Highly Bearish) by 1000 GMT. Immediate resistance is located at 1.1771 (10-DMA), a break above targets 1.1874 (21-DMA). On the downside, support is seen at 1.1622 (Nov. 10 Low), a break below could drag it till 1.1606 (Nov. 1 Low).
USD/JPY: The dollar steadied after U.S. President Donald Trump stated that a U.S. team had arrived in North Korea to prepare for a summit between him and North Korean leader Kim Jong Un. The major was trading 0.05 percent up at 109.35, having hit a low of 108.95 on Thursday, its lowest since May 8. FxWirePro's Hourly Yen Strength Index stood at 87.15 (Slightly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, as U.S. markets remain closed in observance of Memorial Day. Immediate resistance is located at 110.12 (5-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 held gains above the 1.3300 handle, as the UK markets remained closed for the Spring Bank Holiday. On Friday, the major slumped to a 5-month low as worries over Brexit and fading expectations that the Bank of England will raise interest rates weighed on market sentiment. Sterling traded 0.3 percent up at 1.3327, having hit a low of 1.3293 the prior session, it’s lowest since Nov. 28. FxWirePro's Hourly Sterling Strength Index stood at -29.26 (Neutral) by 1000 GMT. Immediate resistance is located at 1.3440 (10-DMA), a break above could take it near 1.3520 (21-DMA). On the downside, support is seen at 1.3278 (Nov. 24 Low), a break below targets 1.3245. Against the euro, the pound was trading 0.2 percent up at 87.42 pence, having hit a low of 87.96 pence on Wednesday, it’s lowest since May 15.
USD/CHF: The Swiss franc edged down after rising to a near 4-week peak last week, as risk- aversion sentiment ebbed after Italy's anti-establishment 5-Star and League parties abandoned plans to form a government. The major trades 0.4 percent up at 0.9932, having touched a low of 0.9885 on Thursday, it’s lowest since Apr. 30. FxWirePro's Hourly Swiss Franc Strength Index stood at -29.07 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9968 (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 traded in a volatile market as the anti-establishment parties failed to form a government in Italy, reviving the prospect of fresh elections.
The pan-European STOXX 600 index plunged 0.05 percent at 391.01 points, while the FTSEurofirst 300 index declined 0.1 percent to 1,528.61 points.
Britain's FTSE 100 trades 0.2 percent up at 7,730.28 points, while mid-cap FTSE 250 rallied 0.6 percent to 21,110.53 points.
Germany's DAX rose 0.05 percent at 12,944.79 points; France's CAC 40 trades 0.05 percent higher at 5,543.87 points.
Commodities Recap
Crude oil prices declined over 1 percent to a near 3-week low as Saudi Arabia and Russia said they may increase supplies and as U.S. production gains showed no signs of decline. International benchmark Brent crude was trading 1.2 percent down at $75.32 per barrel by 1003 GMT, having hit a low of $74.46 earlier, its lowest since May 8. U.S. West Texas Intermediate was trading 1.2 percent down at $66.68 a barrel, after falling as low as $65.83, its lowest since Apr. 17.
Gold prices fell, extending previous session losses, as political tensions eased after U.S. President Donald Trump revived hopes of a U.S.-North Korea summit. Spot gold declined 0.2 percent to $1,297.80 per ounce at 1006 GMT, having hit a high of $1,307.65 on Friday, its highest price level since May 15. while U.S. gold futures for June delivery fell 0.6 percent to $1,295.60 per ounce.
Treasuries Recap
The German bunds remained tad lower during European session as investors awaited the release of the country’s retail sales for the month of May and the unemployment data for the same period, scheduled for May 30 by 06:00GMT and 08:00GMT respectively. The German 10-year bond yields, which move inversely to its price, remained tad higher at 0.41 percent, the yield on 30-year note also climbed to 1.13 percent and the yield on short-term 2-year hovered around -0.66 percent.
The New Zealand bonds jumped at the time of closing, tracking similar movement in the United States Treasuries, with the 30-year yield marking its largest weekly fall in two years last Friday. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped 3 basis points to 2.74 percent, the yield on the long-term 20-year note also plunged 3 basis points to 3.26 percent and the yield on short-term 2-year also closed 1-1/2 basis points lower at 1.87 percent.
The Japanese government bonds remained range-bound during late Asian session as investors wait to watch the country’s unemployment rate and retail sales data for the month of April, scheduled to be released today and on May 29 by 23:30GMT and 23:50GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad lower at 0.03 percent, the yield on the long-term 30-year note slipped 1/2 basis point to 0.73 percent and the yield on short-term 2-year hovered around -0.13 percent.
The Australian government bonds rallied on the start of the week following weekend news regarding U.S.-North Korea relations, which did not appear to have a big impact on most markets. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 5 basis points to 2.745 percent, the yield on the long-term 30-year Note also dipped 2-1/2 basis points to 3.273 percent and the yield on short-term 2-year down 3-1/2 basis points to 1.979 percent.
