Market Roundup
•German Apr PPI (MoM) 0.2%, 0.3% forecast, 0.2% previous
•German Apr PPI (YoY) -3.3%,-3.2% forecast,-2.9% previous
•Greek Mar Current Account (YoY) -2.694B,-3.161B previous
•EU Mar Current Account 35.8B, 30.2B forecast,29.5B previous
•EU Mar Current Account n.s.a. 44.5B, 31.6B previous
•EU Mar Construction Output (MoM) 0.10%, 0.40% previous
•EU Mar Labor Cost Index (YoY) (Q1)4.90%,3.40% previous
•EU Mar Trade Balance 24.1B, 19.9B forecast,23.6B previous
•UK May CBI Industrial Trends Orders -33,-20 forecast,-23 previous
•Canada Apr Core CPI (YoY) 1.6%, 2.0% previous
•Canada Apr CPI (MoM) 0.5%,0.5% forecast, 0.6% previous
•Canada Apr Median CPI (YoY) 2.6%,2.7% forecast,2.8% previous
•Canada Apr Trimmed CPI (YoY) 2.9%2.9% forecast,3.1% previous
•Canada Apr CPI (YoY) 2.7%,2.7% forecast,2.9% previous
•Canada Apr Common CPI (YoY) 2.6%,2.8% forecast,2.9% previous
•Canada Apr Core CPI (MoM) 0.2%,0.5% previous
•US Redbook (YoY) 5.5%6.3% previous
Looking Ahead Economic Data(GMT)
• 13:30 GlobalDairyTrade Price Index 1.8% previous
Looking Ahead Events And Other Releases(GMT)
• 13:10 US FOMC Member Bostic Speaks
•15:45 US Fed Vice Chair for Supervision Barr Speaks
•17:00 UK BoE Gov Bailey Speaks
•23:00 US FOMC Member Bostic Speaks
•23:00 US Fed Collins Speaks
• 23:00 US FOMC Member Mester Speaks
Currency Forecast
EUR/USD: The euro eased against dollar on Tuesday as investors are awaiting Thursday's data from the European Central Bank (ECB) negotiated wage tracker and the euro zone Purchasing Managers' Index (PMI) which could provide further clues about the monetary cycle in the euro area. Traders have anticipated cuts worth 65 bps from the European Central Bank , with the first cut from the ECB seen in June. The current account balance posted a surplus of EUR 36 billion in March compared to a EUR 29 billion surplus in February. In the same period last year, the balance was in EUR 13 billion surplus.German producer prices decreased 3.3 percent on a yearly basis in April, faster than the 2.9 percent fall in March, data from Destatis revealed. Immediate resistance can be seen at 1.0894(23.6%fib), an upside break can trigger rise towards 1.0914(Higher BB).On the downside, immediate support is seen at 1.0830 (38.2% fib), a break below could take the pair towards 1.0756(50% fib).
GBP/USD: The pound was within striking distance of its 2-month high versus the dollar on Tuesday ahead of key economic data.Closely-watched consumer price inflation data is due on Wednesday and "flash" PMI data on British business activity will follow the next day. BoE Governor Andrew Bailey said on May 9 that future cuts might need to be more than those markets priced in, but the next day Pill said that betting too heavily on a rate cut at its June rate meeting would be a bad idea.Policymaker Megan Greene said last week the BoE should wait for more conclusive evidence that inflation pressures are becoming less stubborn before it moves to cut rates.Sterling rose 0.1% to $1.2715; it hit $1.2725 the day before, its highest level since March 21. Immediate resistance can be seen at 1.2731(23.6%fib), an upside break can trigger rise towards 1.2760(Higher BB).On the downside, immediate support is seen at 1.2665(38.2% fib), a break below could take the pair towards 1.2600(50% fib).
USD/CHF: The dollar was little changed against the Swiss franc on Tuesday as investors awaited further clues U.S. interest rates in the wake of cautious comments from Federal Reserve officials . Atlanta Fed President Raphael Bostic said it will "take a while" for the central bank to be confident that a price growth slowdown is sustainable. . On the data front, the focus will now be on the Personal Consumption Expenditures (PCE) price index report - the Fed's preferred gauge of inflation - due on May 31. Markets currently factor in about 41 basis points of Fed rate reductions this year, with a quarter-point cut fully priced in for November. The Swiss franc was down 0.01% to 0.9104.Against a basket of currencies, the dollar dropped 0.08% at 104.52.Immediate resistance can be seen at 0.9136 (23.6% fib), an upside break can trigger rise towards 0.9171 (Higher BB).On the downside, immediate support is seen at 0.9074 (May 20th low), a break below could take the pair towards 0.9028(50% fib).
USD/JPY: The U.S. dollar eased slightly against yen on Tuesday as investors awaited minutes of the Federal Reserve's policy meeting, due Wednesday, for clues as to the timing and extent of possible interest rate cuts this year. Markets currently factor in about 41 basis points of Fed rate reductions this year, with a quarter-point cut fully priced in for November.Traders rushed to rebuild easing bets after data earlier this month showed consumer price pressures receded in April, following three months of upside surprises at the start of the year.Even so, Fed officials are reluctant to declare the fight against inflation over, with Vice Chair Philip Jefferson saying on Monday it was too early to tell if the slowdown is long lasting , and Vice Chair Michael Barr saying restrictive policy needs more time.Strong resistance can be seen at 156.58 (23.6%fib), an upside break can trigger rise towards 157.92(Higher BB).On the downside, immediate support is seen at 155.25(38.2% fib), a break below could take the pair towards 153.91(50% fib).
Equities Recap
European stocks inched lower on Tuesday, following losses in Asian equities, as calls from U.S. Federal Reserve officials for policy caution tempered investor enthusiasm about potential interest rate cuts this year.
UK's benchmark FTSE 100 was last down by 0.36 percent, Germany's Dax was last down by 0.40 percent, France’s CAC was last down by 0.96 percent.
Commodities Recap
Gold prices slipped on Tuesday as U.S. Federal Reserve policymakers stuck to a cautious tone on monetary policy and investors locked in profits after bullion hit an all-time high in the previous session.
Spot gold fell 0.3% at $2,417.95 per ounce, as of 0900 GMT, after scaling a record high of $2,449.89 on Monday. U.S. gold futures fell 0.7% at $2,421.70.
Oil prices extended losses on Tuesday, with investors expecting lingering U.S. inflation to keep interest rates higher for longer, depressing consumer and industrial demand.
Brent crude futures fell 64 cents, or 0.7%, to $83.07 a barrel by 0845 GMT. U.S. West Texas Intermediate crude (WTI) slipped by 64 cents, or 0.8%, to $79.16.
