Market Roundup
• French 12-Month BTF Auction 2.642%, 2.613% previous
• French 3-Month BTF Auction 2.250%, 2.234% previous
• French 6-Month BTF Auction 2.412%, 2.421% previous
• US 3-Month Bill Auction 3.600%, 3.610% previous
• US 6-Month Bill Auction 3.615%,3.615% previous
• US TIC Net Long-Term Transactions (Mar) 81.3B, 57.06B previous
Looking Ahead Economic Data (GMT)
•00:00 Japanese GDP (QoQ) (Q1): 0.4% forecast, 0.3% previous
•00:00 Japanese GDP (YoY) (Q1): 1.7% forecast, 1.3% previous
•00:00 Japanese GDP Price Index (YoY) (Q1): 3.1%forecast, 3.4% previous
•00:00 Japanese GDP External Demand (QoQ) (Q1): 0.2%forecast, 0.0% previous
•00:00 Japanese GDP Capital Expenditure (QoQ) (Q1): 0.2%forecast, 1.3% previous
•00:00 Japanese GDP Private Consumption (QoQ) (Q1): 0.2%forecast, 0.3% previous
•01:30 Australian Westpac Consumer Sentiment (May): -12.5% previous
Looking Ahead Events And Other Releases (GMT)
•02:30 RBA Meeting Minutes
Currency Summaries
EUR/USD : The euro strengthened against on Monday as traders evaluated whether progress in ending the Iran war is likely in the near-term and whether central bankers will need to tighten policy if oil prices remain elevated.The dollar gained last week as a Treasury yields rose sharply on fears that energy costs will feed through to consumer price inflation and lead to a Federal Reserve rate hike. German Central Bank head Joachim Nagel said that central bankers could do "a lot more" to help financial markets and give them a positive momentum ahead of a Group of Seven finance ministers and central bankers meeting in Paris on Monday.Money markets currently expect more than two rate hikes from the European Central Bank by the end of the year, with the first one likely in June.. Immediate resistance can be seen at 1.1666(50%fib), an upside break can trigger rise towards 1.1727(SMA 20).On the downside, immediate support is seen at 1.1547(38.2%fib), a break below could take the pair towards 1.1501(April 67th low).
GBP/USD: Sterling strengthened on Monday as the Middle East conflict continued to unsettle investors. A drone strike caused a fire at a nuclear power plant in the United Arab Emirates, while Saudi Arabia reported intercepting three drones, as U.S. President Donald Trump warned that Iran must act "fast" to reach a deal.Meanwhile, the vital Strait of Hormuz remains closed to all but a trickle of shipping as Tehran tries to formalise its control of the waterway that during normal times carries 20% of the world's oil and gas trade.Investors are closely watching this week’s key UK data releases, including March unemployment figures, April inflation, May PMI surveys and April retail sales, for clues on the Bank of England’s policy outlook. Immediate resistance can be seen at 1.3414(Daily high), an upside break can trigger rise towards 1.3475(38.2%fib).On the downside, immediate support is seen at 1.3321(38.2%fib), a break below could take the pair towards 1.3154(23.6%fib).
USD/CAD: The Canadian dollar edged higher against its U.S. counterpart on Monday as investors assessed whether there will likely be progress soon to end the Iran war. U.S. President Donald Trump said on Monday he had paused a planned attack against Iran to allow for negotiations to take place on a deal to end the war, after Iran sent a new peace proposal to Washington.Oil prices rose as investors digested the latest developments. U.S. crude added $3.24 to settle at $108.66 a barrel. Brent crude gained $2.84 to $112.10 its highest close since May 4. Canadian markets were closed on Monday for Victoria Day, keeping trading volumes thin. Investors now focus on upcoming key data, with Canada’s April CPI due Tuesday, which could shape expectations for Bank of Canada policy. Immediate resistance can be seen at 1.3770(May 18th high), an upside break can trigger rise towards 1.3807(38.2%fib).On the downside, immediate support is seen at 1.3715(38.2%fib), a break below could take the pair towards 1.3673(SMA 20)
USD/JPY: The U.S. dollar edged higher on Monday as the Japanese yen weakened as investors remained alert for potential currency market intervention by Japanese authorities..Officials in Tokyo intervened a couple of times in late April and into early May, which saw the yen strengthen by around 3.5% in the days that followed, but the currency has given up roughly 7% of that rally already.Japan's government is likely to issue fresh debt as part of funding for a planned extra budget to cushion the economic blow from the Middle East war, a government source with direct knowledge of the deliberations told Reuters on Monday. The yen last traded at 158.66, around its weakest since April 29, which put investors on alert for a possible intervention. Immediate resistance can be seen at 159.06(38.2%fib) an upside break can trigger rise towards 159.00(Psychological level) .On the downside, immediate support is seen at 158.23(SMA 20) a break below could take the pair towards 157.78(50%fib ).
Equities Recap
European shares ended Monday's volatile session higher, bouncing back from declines in the previous week, as investors weighed developments in the Middle East amid rising concern over oil price-driven inflation and its impact on global economic growth.
UK's benchmark FTSE 100 closed up by 0.58percent, Germany's Dax ended up by 0.76 percent, France’s CAC finished the day up by 0.35 percent.
The S&P 500 and Nasdaq advanced on Wednesday, supported by gains in artificial intelligence-related technology stocks, as investors largely brushed off hotter-than-expected inflation data and rising expectations that the Federal Reserve will maintain its restrictive policy stance for longer.
Dow Jones closed down by 0.14percent, S&P 500 closed up by 0.58 percent, Nasdaq settled up by 1.20 percent.
Commodities Recap
Gold edged higher on Monday, supported by a weaker U.S. dollar, but gains were capped by rising bond yields and elevated crude oil prices as the Iran war fueled inflation concerns and expectations of tighter monetary policy.
Spot gold was up 0.2% at $4,548.14 per ounce as of 1:41 p.m. ET (1741 GMT), after hitting its lowest since March 30. U.S. gold futures for June delivery settled 0.1% lower at $4,558.
Oil prices climbed about 3% to a two-week high in volatile trade on Monday as worries over supply disruption from the Iran war offset a report that the U.S. had agreed to waive sanctions on Iranian crude during talks.
Brent futures for July delivery rose $2.84, or 2.6%, to settle at $112.10 a barrel, while U.S. West Texas Intermediate crude for June delivery rose $3.24, or 3.1%, to settle at $108.66.
