Market Roundup
•Italian Apr Services PMI 54.3,54.7 forecast, 54.6 previous
•Italian Apr Composite PMI 52.6,53.5 previous
•French Apr S&P Global Composite PMI 50.5,49.9 forecast,48.3 previous
•French Apr French Services PMI 51.3,50.5 forecast,48.3 previous
•German Apr Composite PMI 50.6,50.5 forecast,47.7 previous
•German Apr Services PMI 53.2,53.3 forecast,50.1 previous
•EU Apr S&P Global Composite PMI 51.7,51.4 forecast, 50.3 previous
•EU Apr Services PMI 53.3,52.9 forecast, 51.5 previous
Looking Ahead Economic Data(GMT)
•12:30 Canada Avg hourly wages Permanent employee 5.0% previous
•13:00 French 6-Month BTF Auction 3.710% previous
•13:00 French 3-Month BTF Auction 3.800% previous
•13:00 French 12-Month BTF Auction 3.488% previous
•14:00 US Apr CB Employment Trends Index 112.84 previous
•15:30 US 3-Month Bill Auction 5.250% previous
•15:30 US 6-Month Bill Auction 5.165% previous
Looking Ahead Events And Other Releases(GMT)
•16:50 US FOMC Member Barkin Speaks
• 17:00 US FOMC Member Williams Speaks
Currency Forecast
EUR/USD: The euro strengthened against dollar on Monday as investors grew hopeful about potential interest rate cuts from major central banks. The case for a European Central Bank interest rate cut in June is getting stronger as services inflation is finally starting to ease, ECB Chief Economist Philip Lane told Spanish newspaper El Confidencial on Monday Both the April flash estimate for euro area inflation and the first quarter GDP number that came out improve my confidence that inflation should return to target in a timely manner," Lane told the newspaper in an interview. The ECB has all but promised a rate cut on June 6, provided incoming data strengthen policymakers' belief that inflation will head back to its 2% target by the middle of next year. Immediate resistance can be seen at 1.0810(38.2% fib), an upside break can trigger rise towards 1.0888(23.650% fib).On the downside, immediate support is seen at 1.0751 (50% fib), a break below could take the pair towards 1.0723(April 2nd low).
GBP/USD: The British pound strengthened against the dollar on Monday as investors awaited Bank of England policy announcement on Thursday. The Bank of England must decide next week whether to will update its message about when it might cut interest rates for the first time in four years, a move which could yet prove risky despite a sharp drop in inflation.Britain's labour market is still generating inflationary heat, the economy looks like it has emerged from a recession and the U.S. Federal Reserve- which sets the tone for financial markets globally - is pushing back on when it might cut rates.Financial markets are now only fully pricing in a first BoE rate cut in September and the chances of a second move by the end of the year are seen as little more than 50-50. Immediate resistance can be seen at 1.2582 (38.2%fib), an upside break can trigger rise towards 1.2655(23.6 % fib).On the downside, immediate support is seen at 1.2531 (50% fib), a break below could take the pair towards 1.2480 ( 61.8% fib).
USD/CHF: The dollar was little changed against the Swiss franc on Monday as investors assessed Fed rate cut prospect.Data on Friday showed U.S. job growth slowed more than expected in April and the increase in annual wages fell below 4.0% for the first time in nearly three years, as signs of labour market cooling raised optimism that the U.S. central bank could engineer a soft landing for the economy.Markets are now pricing in almost 50 basis points of cuts this year, with a rate cut in November fully priced in. The Fed held interest rates steady at the conclusion of its two-day monetary policy meeting last week, as expected, but signalled it was still leaning towards eventual rate cuts, even if they may take longer to come than initially expected. Immediate resistance can be seen at 0.9072(38.2% fib), an upside break can trigger rise towards 0.9132( 23.6% fib).On the downside, immediate support is seen at 0.9008(50% fib), a break below could take the pair towards 0.8952(61.8%fib).
USD/JPY: The U.S. dollar strengthened on Monday as yen weakened after a strong surge last week from Tokyo's suspected currency intervention. The yen last week clocked its strongest weekly gain since early December 2022 following two bouts of suspected intervention from Tokyo to pull the currency away from a 34-year low of 160.245 per dollar. It gained 3.5% in the week. The yen has been under pressure as U.S. interest rates have climbed and Japan's have stayed near zero, driving cash out of yen and into higher-yielding assets. The more than 9 trillion yen that the Bank of Japan is estimated to have spent to prop up the frail yen last week has only bought it some time, analysts say, as the market still views the currency as a sell. Strong resistance can be seen at 153.74 (Daily high), an upside break can trigger rise towards 154.00(Psychological level).On the downside, immediate support is seen at 152.62(38.2% fib), a break below could take the pair towards 151.26(Lower BB).
Equities Recap
European shares rose on Monday, with investor optimism over interest rate cuts from major central banks back to the fore, while Spanish defence and technology firm Indra jumped following a strong first-quarter profit.
At (GMT 12:22 ),UK's benchmark FTSE 100 was last trading up at 0.51 percent, Germany's Dax was up by 1.06 percent, France’s CAC finished was up by 0.87 percent.
Commodities Recap
Oil futures climbed on Monday after Saudi Arabia hiked June crude prices for most regions and as the prospect of a Gaza ceasefire deal appeared slim, renewing fears the Israel-Hamas conflict could still widen in the key oil-producing region.
Brent crude futures were up 77 cents, or 0.9%, to $83.73 a barrel at 1055 GMT, while U.S. West Texas Intermediate crude futures were at $78.98 a barrel, up 87 cents, or 1.1%.
