Market Roundup
- Pro-Europe vote fragments but limits nationalist gains in EU election
- UK ever more polarised as Brexit Party storms to EU vote win
- Race to succeed UK PM May centres on 'no deal' Brexit battle
- Trump presses Japan over trade gap, expects 'good things' from North Korea
- N.Korea dubs Bolton's comments 'inordinately ignorant' - KCNA
- Taiwan and U.S. security officials hold rare meeting amid China tension
- Australia home prices' long decline pauses on rate cut prospects
- China's industrial profits shrink in April, add to pressure on economy
- China's top banking regulator says yuan bears will suffer 'heavy losses'
Economic Data Ahead
- No major release scheduled
Key Events Ahead
- (0440 ET/0840 GMT) Introductory remarks by ECB's Benoit Coeure at a high-level meeting on financial inclusion organised by the Bank for International Settlements - Basle
FX Beat
DXY: The dollar index eased to 1-1/2week low, amid worries about escalating tensions between Washington and Beijing over trade and technology. The greenback against a basket of currencies traded flat at 97.60, having touched a high of 98.37 on Thursday, its highest since May 2017. FxWirePro's Hourly Dollar Strength Index stood at -84.22 (Slightly Bearish) by 0500 GMT.
EUR/USD: The euro rallied to an 11-day peak after pro-European Union parties held on to two-thirds of seats in the EU parliament elections, limiting gains in nationalist opponents. The European currency traded 0.05 percent up at 1.1209, having touched a high of 1.1215 earlier, its highest since May 16. FxWirePro's Hourly Euro Strength Index stood at 25.47 (Neutral) by 0500 GMT. Immediate resistance is located at 1.1229 (Apr. 30 High), a break above targets 1.1262 (April 22 High). On the downside, support is seen at 1.1166 (May 16 Low), a break below could drag it below 1.1118 (April 25 Low).
USD/JPY: The dollar rose, halting a 3-day losing streak, as U.S. President Donald Trump is seen putting pressure on Japanese Prime Minister Shinzo Abe to take measures to reduce its trade surplus with the United States. The major was trading 0.2 percent up at 109.48, having hit a high of 110.67 on Tuesday, its highest since May 7. FxWirePro's Hourly Yen Strength Index stood at 147.77 (Highly Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, as U.S. markets remian closed on account of Memorial Day. 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 rose to a 6-day peak after Prime Minister Theresa May set out a departure date. However, fears over the prospect of a no deal Brexit dented the bid tone around the British pound. The major traded 0.2 percent up at 1.2738, having hit a high of 1.2744 earlier; it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at 30.99 (Neutral) 0500 GMT. Immediate resistance is located at 1.2774 (38.2% retracement of 1.3047 and 1.2605). a break above could take it near 1.2827 (50.0% retracement). On the downside, support is seen at 1.2647 (May 24 Low) a break below targets 1.2581 (Jan. 2 Low). Against the euro, the pound was trading 0.2 percent up at 87.97 pence, having hit a low of 88.50 on Friday, it’s lowest since Jan. 21.
AUD/USD: The Australian dollar rallied to a near 2-week peak, as comments from U.S. President Donald Trump on trade relations with China provided markets a bit of a respite. The Aussie trades 0.2 percent up at 0.6937, having hit a high of 0.6938 earlier, it’s highest since May 15. FxWirePro's Hourly Aussie Strength Index stood at 1.45 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6890 (May 20 Low), a break below targets 0.6864 (May 17 Low). On the upside, resistance is located at 0.6961 (Apr. 30 High), a break above could take it near 0.6997 (May 9 High).
NZD/USD: The New Zealand dollar rose to an over 1-week peak, as markets waited on the next developments in the U.S. trade dispute. The Kiwi trades 0.1 percent up at 0.6554, having touched a low of 0.6481 on Thursday, its lowest level Oct. 26. FxWirePro's Hourly Kiwi Strength Index was at 44.64 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6591 (May 14 High), a break above could take it near 0.6614 (May 10 High). On the downside, support is seen at 0.6474 (Oct. 4 Low), a break below could drag it below 0.6442 (Oct. 10 Low).
Equities Recap
Asian shares consolidated near 4-month lows amid concerns about U.S.-China tensions.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei surged 0.3 percent to 21,182.58 points, Australia's S&P/ASX 200 index declined 0.05 percent to 6,451.90 points and South Korea's KOSPI slumped 0.05 percent to 2,044.91 points.
Shanghai composite index rose 1.3 percent to 2,890.57 points, while CSI 300 index traded 1.1 percent up at 3,634.39 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 27,302.28 points. Taiwan shares added 0.1 percent to 10,334.13 points
Commodities Recap
Crude oil prices declined, weighed down by concerns the U.S.-China trade war could trigger a broad economic slowdown, although OPEC's supply cuts limited downside. International benchmark Brent crude was trading 0.9 percent lower at $68.64 per barrel by 0455 GMT, having hit a low of $66.99 on Thursday, its lowest since Mar, 28. U.S. West Texas Intermediate was trading 1.1 percent down at $58.35 a barrel, after falling as low as $57.32 on Thursday, its lowest since the Mar. 13.
Gold prices surged as fears of a protracted U.S.-China trade dispute dented risk sentiment, while downbeat economic data from the United States bolstered bets of a U.S. Federal Reserve rate cut. Spot gold rose 0.2 percent to $1,286.82 per ounce by 0458 GMT, having touched a high of $1,287.27 earlier, its highest since May 17. U.S. gold futures also gained 0.2 percent to $1,285.50 an ounce.
Treasuries Recap
The Japanese government bond prices fell slightly, with the benchmark 10-year JGB yield gaining half-a-basis point to minus 0.070 percent. The 30-year yield and the 40-year yield also rose half-a-basis point, to 0.505 percent and 0.535 percent, respectively. The 10-year JGB futures closed down 0.04 point at 152.82.
The Australian 10-year bond future eased back 2 ticks to 98.4500.
The yields on the two-year New Zealand bonds fell to a record low at 1.325 percent, having begun the year at 1.72 percent.
