Market Roundup
• US Mar construction spending rises 0.3% vs -0.5 in Feb, below 0.5% forecast.
• US Apr ISM Mfg index 50.8 in April vs forecast 51.4%, 51.8% in Mar, prices paid up, new orders fall.
• US Mfg final PMI for Apr 50.8 vs flash 50.8, final March 51.5.
• Canada manufacturing growth picks up for 2nd cons month in April (52.2 v 51.5 in March).
• Atlanta Fed’s GDPNow: U.S. economy seen growing at 1.8 pct in Q2, unchanged from Apr 29.
• ECB’s Draghi: no alternative to cont’d expansionary policies until slack in econ has been reduced.
• ECB’s Draghi: low rates symptom of underlying problem.
• EBB’s Lautenschlaeger: other monetary policy options available to ECB besides interest rates.
• GBP/USD hits 5-mos high against broadly weaker USD as Brexit fears recede.
• Oil down 2% as OPEC output hike sparks profit-taking.
Looking Ahead - Economic Data (GMT)
• 01:45 China Caixin Mfg PMI Final Apr f/c 49.9, 49.7-previous
• 01:30 Australia Building Approvals Mar f/c -3%, 3.10%-previous
• 01:30 Australia Private House Approvals Mar -1.20%-previous
Looking Ahead - Events, Other Releases (GMT)
• 04:30 AU Reserve Bank of Australia interest rate meeting; forecast no change (2%)
Currencies summary
EUR/USD is likely to find support at 1.0450 levels and currently trading at 1.1534 levels. The pair has made session high at 1.1537 and hit lows at 1.1502 level. Dollar declined against the euro on Monday as the strong U.S. ISM Manufacturing PMI figures added to worries over US economy. The euro surged strongly against the US dollar, as investors pared back bullish bets on the greenback following a drop in U.S. factory data. Monday's data on global manufacturing supported the notion of sluggish global growth. U.S. factory growth slowed more than expected in April, while Chinese manufacturing activity expanded only marginally. German factory data, however, showed the sector grew solidly. That lifted the euro to $1.1532, the highest since late August.
GBP/USD is supported in the range of 1.4600 and currently trading at 1.4669 levels. It reached session high at 1.4686 and hit low at 1.4636 levels. Sterling reached its strongest against the dollar since the start of January on Monday, tracking gains for the euro against the greenback after solid numbers on manufacturing from Germany. Sterling has recovered in the past two weeks as bookmakers' odds shifted away from predicting a Brexit vote in June's referendum on European Union membership. It reached a five-month high of $1.4695, its highest since Jan. 5, as U.S. markets opened on Monday after a morning session thinned out by the absence of London traders due to a holiday.
AUD/USD is supported around 0.7592 levels and currently trading at 0.7662 levels. It hit session high at 0.7026 and made session lows at 0.7667 levels. The Australian dollar inched up against their U.S. counterpart on Monday and regained some ground on the yen in quiet trading with much of Asia closed for the May Labour Day holiday. The Australian dollar edged up to $0.7615, from $0.7603 late on Friday, with markets hesitant to take large positions ahead of an interest rate decision by the Reserve Bank of Australia (RBA) on Tuesday. The Aussie slipped 1.4 percent last week after a surprisingly low inflation read in the first quarter prompted investors to price in a greater chance of a cut in interest rates.
USD/CAD is supported at 1.2495 levels and is trading at 1.2529 it has made session high at 1.2555 and lows at 1.2588 levels. The Canadian dollar strengthened slightly against a broadly weaker U.S. counterpart on Monday, edging toward a nearly 10-month high reached last week. The loonies, as Canada's dollar is commonly known, has rallied 17 percent from a 12-year low in January of C$1.4689, helped by rebounding oil prices, fiscal stimulus and stronger-than-expected domestic economic activity.Meanwhilr Growth picked up in the Canadian manufacturing sector in April for the second month in a row as businesses increased their production volumes in response to stronger demand. The currency's strongest level of the session was C$1.2514, while its weakest was C$1.2559.
Equities Recap
European shares edged up on Monday after sharp declines in the previous session, with German shares outperforming the broader market after a positive manufacturing survey.
The pan-European FTSEurofirst 300 ended the day down by 0.08 percent, Germany's Dax closed up 0.76, and France’s CAC finished the day up by 0.23 percent.
U.S. stocks extended their recent slide on Monday with declines in biotechs and energy shares, while caution ahead of earnings season also weighed on the market.
Dow Jones closed up 0.89 percent, S&P 500 ended the day up by 0.78 percent, Nasdaq finished the day down by 0.66 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday as stock prices gained, reducing demand for safe haven bonds, before Friday's highly anticipated jobs report for April.
Benchmark 10-year notes 13/32 in price to yield 1.87 percent, up from 1.82 percent on Friday. The yields have fallen from 1.94 percent last Tuesday, before the Fed statement on Wednesday
Commodities Recap
Oil prices fell about 3 percent on Monday as production from the Organization of the Petroleum Exporting Countries neared all-time peaks and record speculative buying in global benchmark Brent sparked profit-taking on last month's outsized rally.
Brent's new front-month contract, July, settled down $1.54, or 3.3 percent, at $45.83 per barrel, hitting a session low at $45.72.
WTI closed down $1.14 cents, or 2.5 percent, at $44.78 a barrel, after hitting an intraday low at $44.54.
Gold rose to a fresh 15-month peak above $1,300 an ounceon Monday in holiday-thinned trade as an early retreat in the dollar drove prices higher, though it later eased as the U.S. currency pared losses.
Spot gold peaked at $1,303.60 an ounce, its highest since January last year, before easing 0.2 percent to $1,290.90 an ounce by 2:01 p.m. EDT (1801 GMT).
U.S. gold futures for June delivery settled up 0.4 percent at $1,295.80 an ounce.
