Market Roundup
- EUR/USD +0.05%, USD/JPY +0.12%, GBP/USD -0.09%, AUD/USD -0.12%
- DXY +0.02%, DAX +1.39%, FTSE +0.27%, Gold -0.4%
- Strong U.S. job growth expected in May; wage rise seen moderate
- Oil slides as U.S. climate withdrawal compounds glut concerns, down 2.87%
- OPEC Sec Gen: Reaching Paris goals will be very challenging without U.S.
- UK May construction PMI highest since Dec 2015 at 56.0 (Rtrs poll 52.7)
- EZ April producer prices 4.3 pct y/y - Eurostat (Rtrs poll 4.5 pct)
- Macron's party seen winning solid lead in French legislatives round 1 - poll
- Spain's May jobless falls 3 pct m/m to 3.46 mln
- Swedish current account surplus falls to 47.5 bln SEK in Q1
- BoJ balance sheet to Y500 trln, about to overtake Fed, almost as big as econ
- Japan Q1 GDP seen revised up on increased capital expenditure
- POLL-Australia c. bank seen keeping rates steady at June meeting
- Japan Q1 GDP seen revised up on increased capital expenditure
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 211,000 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 62.9 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Labor Department is expected to report that unemployment rate remained steady at 4.4 percent in May.
- (0830 ET/1230 GMT) The United States' average hourly earnings are likely to rise 0.2 percent in May after climbing 0.3 percent in the month before.
- (0830 ET/1230 GMT) The United States releases trade balance figures for the month of April. The economy's trade deficit is expected to have widened to $46.1 billion from 43.7 billion in March.
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that international trade deficit narrowed to C$0.07 billion in April from C$0.14 billion in March.
- (0945 ET/1345 GMT) The NAPM-New York releases ISM-New York Index for the month of May. The index stood at 55.8 in the previous month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.625 bn)
- (1245 ET/1645 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on the economic outlook and the Federal Reserve Bank of Philadelphia's Economic Growth and Mobility Project before the Pennsylvania Economic Association 2017 conference.
- (1300 ET/1700 GMT) Dallas Fed President Robert Kaplan speaks at a moderated Q&A session at the City of Addison Economic Development Luncheon in Texas.
FX Beat
DXY: The dollar advanced to a 1-week peak versus the yen as investors awaited the U.S. non-farm payrolls data for further insights on Federal Reserve’s interest rate outlook. The greenback against a basket of currencies traded 0.1 percent up at 97.28, drifting away from a low of 96.86 hit on Wednesday, it’s lowest since May 23. FxWirePro's Hourly Dollar Strength Index stood at -52.25 (Bearish) by 1000 GMT.
EUR/USD: The euro consolidated between a narrow range as investors remained cautious ahead of the highly-influential US non-farm payrolls data. The gains remain limited as weaker-than-expected Eurozone's producer price index weighed on the EUR bulls. The European currency traded 0.1 percent up at 1.1220, having touched a high of 1.1256 the day before, its highest since May 23. FxWirePro's Hourly Euro Strength Index stood at 76.49 (Slightly Bearish) by 1000 GMT. Any violation above 1.1267 yearly high will take the pair to next level till 1.1300 Nov high. On the lower side, any break below 1.1100 (23.6% retracement of 1.105694 and 1.12678) will drag it5 down till 1.1050/1.1000.
USD/JPY: The dollar rallied to a fresh 1-week high as investors await the U.S. nonfarm payroll data for further clues on the timing of Fed interest rate hikes. The report is expected to show that the economy added 185,000 jobs in May versus 211, 000 job additions seen in April, while the unemployment rate is likely to fall to 4.4 percent in the same period. The major traded 0.1 percent up at 111.49, having touched a high of 111.71 earlier, its highest since May 26. FxWirePro's Hourly Yen Strength Index stood at -31.11 (Neutral) by 1000 GMT. The pair is facing support at 110 and any break below will drag it down till 108.13. On the higher side, close above 111.75 (89 EMA) will take it to next level till 113.40/114.36 likely.
GBP/USD: Sterling tumbled, extending losses from the previous session, as investors scrutinized the polls on the country's general election due in less than a week. Markets seem to have ignored stronger-than-expected UK construction sector data, which jumped to 56.0 from 53.1, its highest since December 2015. Sterling trades 0.2 percent down at 1.2853, having hit a low of 1.2769 on Wednesday, its weakest since Apr. 21. FxWirePro's Hourly Sterling Strength Index stood at 67.66 (Bullish) by 1000 GMT. On the higher side, minor resistance is around 1.2925 (10- day MA) and any break above will take the pair till 1.2950/1.3000. The major support is around 1.2750 (Apr 21st low) and any break below will drag it down till 1.2705/1.2600. Against the euro, the pound traded 0.2 percent down at 87.26 pence, having touched a 2-1/2 month low of 87.54 on Thursday.
USD/CHF: The Swiss franc traded between a narrow range as investors refrained from placing big bets ahead of highly influential U.S. nonfarm payroll data. The major trades flat at 0.9712, having hit a low of 0.9664 in the previous session, its lowest since Nov 9. FxWirePro's Hourly Swiss Franc Strength Index stood at 27.42 (Neutral) by 1000 GMT. Any minor bullishness can be seen only above 0.9808 and jump till 0.9850/0.9900 is possible. On the lower side, support is around 0.9665 and any break below will drag the pair till 0.9635/0.9617/0.9600 (50% projection of 1.0100-0.9692 measuring from 0.9808).
AUD/USD: The Australian dollar retreated after declining to a 2-week low, as investors’ cheered upbeat Australia's fundamental, which showed new home sales rose 0.8 percent in March, rebounding from a fall of 1.1 percent in February. The Aussie trades 0.2 percent up at 0.7393, having hit a low of 0.7371 earlier, it’s weakest since May 12. FxWirePro's Hourly Aussie Strength Index stood at -51.20 (Bearish) by 1100 GMT. On the lower side, near term support is around 0.7385 (61.8% retracement of 0.71599 and 0.77493) and any close below will drag the pair till 0.7325/0.7300. The near term resistance is around 0.7440 (21- EMA) and any close above targets 0.7520/0.7580/0.7650.
Equities Recap
European shares surged in early trade as series of positive economic data boosted investor sentiment, while the dollar hit 1-week peak against the yen ahead of U.S. nonfarm payrolls figures.
The pan-European STOXX 600 index advanced 0.6 percent to 394.13 points, while the FTSEurofirst 300 index gained 0.7 percent to 1,548.36 points.
Britain's FTSE 100 trades 0.3percent up at 7,563.27 points, while mid-cap FTSE 250 added 0.1 percent to 20,028.71 points.
Germany's DAX rose 1.4 percent at 12,846.13 points; France's CAC 40 trades 0.9 percent higher at 5,366.23 points.
Commodities Recap
Crude oil prices tumbled by more than 2 percent and were heading for a second straight week of losses, as concerns that U.S. President Donald Trump's decision to abandon a climate pact could fuel more crude drilling activity in the United States, deteriorating a global glut. International benchmark Brent crude was trading 0.2 percent down at $49.12 per barrel by 1004 GMT, having hit a low of $48.99 earlier, its weakest since May 10. U.S. West Texas Intermediate declined 2.3 percent to $46.91 a barrel, after falling as low as $46.81, its lowest since May 120.
Gold prices declined to hit its lowest in a week, as the equity markets rallied, while the dollar rebounded after upbeat U.S. private-sector job figures underpinned the prospects for an interest rate hike this month. Spot gold had slumped 0.2 percent to $1,263.09 per ounce by 1013 GMT, having touched a low of $1,258.85 earlier, its weakest since May 26 and was set to register its first weekly decline in four weeks. U.S. gold futures fell 0.5 percent to $1,264.40 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.209 percent lower by 0.007 bps, while 5-year yield was 0.003 bps down at 1.761 percent.
Then German 10-year government bond yield, the benchmark for the zone, was 1 bps lower at 0.29 percent. The spread between Germany's 10- and 30-year bond yields hit 86 basis points earlier, its highest since January 2016, before narrowing a touch. The spread between Italy's 10- and 30-year bond yields was at 111 basis points, a 2-1/2 month high.
The Japanese government bond prices fell as Tokyo stocks rose to a near two-year high and diminished the appeal of safe-haven debt. The benchmark 10-year JGB yield was up half a basis point at 0.055 percent, its highest since April 10. The 30-year yield also rose half a basis point, to 0.815 percent.
The Australian government bond futures eased, with the three-year bond contract off 2 ticks at 98.300. The 10-year contract edged 1.5 ticks lower to 97.5600, while the 20-year contract also shed 1.5 ticks to 97.0100. Meanwhile, the spread between Australian and U.S. 2-year government bonds steadied at a 16-year low of 28 basis points.
The New Zealand government bonds eased, sending yields 5 basis points higher at the long end of the curve.
