Market Roundup
- United Kingdom May 2019 Halifax house price 3m/yy increase to 5.2 % (forecast 4.9 %) vs previous 5 %
- United Kingdom may 2019 Halifax house prices mm decrease to 0.5 % (forecast -0.2 %) vs previous 1.1 %
- France Apr 2019 imports, eur approx time decrease to 47.29 eur vs previous 48.58 eur (revised from 48.5 eur)
- France Apr 2019 exports, eur approx time decrease to 42.31 eur vs previous 43.12 eur (revised from 43.2 eur)
- France Apr 2019 trade balance, eur, sa increase to -4.98 eur vs previous -5.46 eur (revised from -5.3 eur)
- France Apr 2019 industrial output mm increase to 0.4 % (forecast 0.3 %) vs previous -1.1 % (revised from -0.9 %)
- France Apr 2019 current account increase to -0.8 eur vs previous -2.3 eur (revised from -1.3 eur)
- Germany Apr 2019 current account - balance nsa decrease to 22.6 eur vs previous 30.2 eur
- Germany Apr 2019 trade balance, eur, sa decrease to 17 eur (forecast 18.6 eur) vs previous 20 eur
- Germany Apr 2019 imports mm sa decrease to -1.3 % (forecast -0.2 %) vs previous 0.4 %
- Germany Apr 2019 exports mm sa decrease to -3.7 % (forecast -0.9 %) vs previous 1.5 %
- Germany Apr 2019 industrial output mm decrease to -1.9 % (forecast -0.4 %) vs previous 0.5 %
- Switzerland May 2019 unemployment rate adj stays flat at 2.4 % (forecast 2.4 %) vs previous 2.4 %
- Switzerland May 2019 unemployment rate unadj decrease to 2.3 % vs previous 2.4 %
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Labor Department releases nonfarm payrolls report for the month of May. The report is likely to show 185,000 jobs were added compared with an increase of 263,000 in April.
- (0830 ET/1230 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of May. The rate stood at 62.8 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Labor Department is expected to report that the unemployment rate remained steady at 3.6 percent in May.
- (0830 ET/1230 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in May after climbing 0.2 percent in the month before.
- (0830 ET/1230 GMT) Canada's releases industrial capacity utilization data for the first quarter. The indicator stood at 81.7 in the previous quarter.
- (0830 ET/1230 GMT) Statistics Canada releases the employment report for May. The economy is likely to have added 8,000 jobs, compared to a rise of 106,500 jobs in April, while the participation rate is expected to edge down to 65.8 percent from 65.9 percent in the previous month.
- (0830 ET/1230 GMT) Canada's unemployment rate is expected to remain unchanged at 5.7 percent for the month of May.
- (0900 ET/1300 GMT) Mexico releases its consumer confidence data for the month of January.
- (1200 ET/1600 GMT) The U.S. Census Bureau is likely to report that wholesale inventories rose 0.7 percent in April after posting similar gains in the prior month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
- (1500 ET/1900 GMT) The U.S. Federal Reserve is likely to report that consumer credit rose to $12.0 billion in April from $10.28 billion the month before.
Key Events Ahead
- (1230 ET/1630 GMT) U.S. Federal Reserve Bank of Richmond President Thomas Barkin speaks before "Technology Diffusion and Productivity" workshop in Richmond\
FX Beat
DXY: The dollar index consolidated near 8-month lows, ahead of the U.S. jobs data that is seen supporting chances of U.S. interest rate cut, as an escalating U.S.-China trade dispute hurt business confidence and growth. The greenback against a basket of currencies traded 0.1 percent up at 97.08, having touched a low of 96.75 on Wednesday, its lowest since Mar. 27. FxWirePro's Hourly Dollar Strength Index stood at -6.72 (Neutral) by 1000 GMT.
EUR/USD: The euro eased from recent highs after data showed German industrial output and exports fell sharply in April, weighed down by trade frictions and Brexit uncertainty. On Thursday, the major rose to a 7-month peak after the European Central Bank sounded less dovish about monetary policy and the economic outlook than expected. The European currency traded 0.1 percent down at 1.1264, having touched a high of 1.1309 on Thursday, its highest since Apr. 17. FxWirePro's Hourly Euro Strength Index stood at 43.61 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1304 (Apr. 18 High), a break above targets 1.1344 (March 15 High). On the downside, support is seen at 1.1210 (Apr. 8 Low), a break below could drag it below 1.1183 (April 2 Low).
USD/JPY: The dollar surged to a 1-week peak amid improving global risk sentiment. However, the upside appears limited as investors expect the Federal Reserve to cut interest rates before the end of this year. The major was trading 0.1 percent up at 108.53, having hit a low of 107.81 on Wednesday, its lowest since Jan. 10. FxWirePro's Hourly Yen Strength Index stood at -134.29 (Highly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payroll report, unemployment rate, wholesale inventories and consumer credit. Immediate resistance is located at 108.87 (50.0% retracement of 109.92 and 107.81), a break above targets 109.47 (78.6% retracement). On the downside, support is seen at 107.77 (Jan. 10 Low), a break below could take it lower at 107.51 (Jan. 4 Low).
GBP/USD: Sterling steadied above the 1.2700 handle and was on poised for its first weekly gain in five, as investors appeared more confident that Britain can avoid a no-deal Brexit, ahead of the leadership contest to take over from Theresa May as prime minister and Conservative party leader. The major traded 0.2 percent up at 1.2716, having hit a high of 1.2743 on Wednesday; it’s highest since May 27. FxWirePro's Hourly Sterling Strength Index stood at 126.15 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.2747 (May 27 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2647 (May 24 Low), a break below targets 1.2580 (May 30 Low). Against the euro, the pound was trading 0.2 percent up at 88.62 pence, having hit a low of 89.02 on Tuesday, it’s lowest since Jan. 15.
USD/CHF: The Swiss franc slightly eased, reversing some of its previous session gains, as the greenback steadied after tumbling to an 8-week low earlier in the week. The major trades 0.2 percent up at 0.9934, having touched a low of 0.9853 on Wednesday; it’s lowest since Jan. 15. FxWirePro's Hourly Swiss Franc Strength Index stood at -131.95 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9987 (April 3 High) and any break above will take the pair to next level till 1.0121 (May 17 High). The near-term support is around 0.9879 (June 6 Low), and any close below that level will drag it till 0.9820 (Dec. 20 Low).
Equities Recap
European shares rose, boosted by gains in the healthcare sector, while investors awaited the U.S. non-farm payrolls and unemployment rate for further insight on the strength of economy.
The pan-European STOXX 600 index rallied 0.9 percent at 377.39 points, while the FTSEurofirst 300 gained 0.9 percent to 1,485.58 points.
Britain's FTSE 100 trades 0.8 percent up at 7,322.24 points, while mid-cap FTSE 250 surged 0.5 to 19,152.33 points.
Germany's DAX rose 0.8 percent at 12,044.57 points; France's CAC 40 trades 1.5 percent higher at 5,356.02 points
Commodities Recap
Crude oil prices rallied to a 1-week peak amid signs that producer cartel OPEC and other producers may extend their output reduction deal. International benchmark Brent crude was trading 0.2 percent higher at $62.37 per barrel by 1033 GMT, having hit a low of $59.42 on Wednesday, its lowest since Jan. 28. U.S. West Texas Intermediate was trading 0.2 percent down at $53.17 a barrel, after falling as low as $50.59 on Wednesday, its lowest since the Feb. 12.
Gold prices eased but were on course for their best week since March 2018, as rising expectations for a U.S. rate cut and concerns over global trade dispute boosted demand for safe-haven assets. Spot gold was trading 0.2 percent down at $1,333.31 per ounce at 1035 GMT, having touched a high of $1,344.01 on Wednesday, its highest since Feb. 20. U.S. gold futures were down 0.2 percent at $1,339.60.
Treasuries Recap
The U.S. Treasuries steadied during the afternoon session, ahead of the country’s employment report for the month of May, comprising of non-farm payrolls and unemployment rate, scheduled to be released today by 12:30GMT respectively, amid an otherwise, muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury yield traded nearly flat at 2.126 percent, the super-long 30-year bond yields hovered around 2.619 percent and the yield on the short-term 2-year traded nearly 1/2 basis point lower at 1.876 percent.
The German bunds remained flat in a muted European trading session after the country’s industrial production and trade balance data for the month of April both disappointed market investors ahead of a long weekend holiday. The German 10-year bond yields, which move inversely to its price, remained flat at -0.233 percent, the yield on 30-year note hovered around 0.368 percent and the yield on short-term 2-year too traded steady at -0.645 percent.
The Japanese government bond yields plunged at close on the last trading day of the week following the Bank of Japan’s (BoJ) lower-than-expected reduction in buying in long maturities. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 11-1/2 basis points to -0.116 percent, the yield on the long-term 30-year suffered 2-1/2 basis points to 0.382 percent and the yield on short-term 2-year plummeted nearly 20 basis points to -0.197 percent
The Australian government bond slumped during early Asian session amid rebound in risk sentiment on the hopes that the U.S. tariffs on Mexico could be delayed. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose nearly 2 basis points to 1.484 percent, the yield on the long-term 30-year bond also jumped over 1 basis point to 2.135 percent and the yield on short-term 2-year traded surged about 3 basis points to 1.093 percent.
