Market Roundup
- U.S. Treasury Sec says having good trade talks in China
- U.S. jobs growth expected to regain momentum in April
- Giuliani wants limits for Trump interview in Russia probe
- China Apr Caixin Services PMI, 52.9, last 52.3
- Australia's central bank sees faster growth, slow inflation - a recipe for steady rates
- UK PM May set to avoid London wipeout in local elections
- UK's NIESR cuts 2018 growth forecast after weak Q1
- U.S.-based govt-Treasury funds post 6th week of inflows -Lipper
- U.S. muni bond funds post $344.7 mln in outflows-Lipper
- Foreign CB US debt holdings -$4,235 bln to $3.407 tln May 2 week
- Treasuries -$3,682 bln to $3.055 tln, agencies $971 mln to $275.165 bln
Economic Data Ahead
- (0245 ET/0645 GMT) France Mar Budget Balance, last -28.48 bln
- (0245 ET/0645 GMT) France Mar Trade Balance, EUR, SA, f'cast -4.90 bln, last -5.20 bln
- (0350 ET/0750 GMT) France Apr Markit Comp PMI, f'cast 56.9, last 56.9
- (0355 ET/0755 GMT) Germany Apr Markit Services PMI, f'cast 54.1, last 54.1
- (0355 ET/0755 GMT) Germany Apr Markit Comp Final PMI, f'cast 55.3, last 55.3
- (0400 ET/0800 GMT) EZ Apr Markit Serv Final PMI, f'cast 55.0, last 55.0
- (0400 ET/0800 GMT) EZ Apr Markit Comp Final PMI, f'cast 55.2, last 55.2
- (0500 ET/0900 GMT) EZ Mar Retail Sales MM, f'cast 0.5%, last 0.1%
- (0500 ET/0900 GMT) EZ Mar Retail Sales YY, f'cast 1.9%, last 1.8%
Key Events Ahead
- (0345 ET/0745 GMT) ECB's Constancio speaks in Valletta, Malta
- (0900 ET/1300 GMT) Bundesbank President Weidmann speaks in Frankfurt
- (1245 ET/1645 GMT) Fed's Dudley speaks in New York
- (1500 ET/1900 GMT) Fed's Williams speaks at Stanford, California
- (1730 ET/2130 GMT) Fed's Quarles speaks at Stanford, California
FX Beat
DXY: The dollar index held firm below a 4-month peak on expectations the Federal Reserve will continue to raise interest rates, while investors focus shifted on the U.S. jobs data for further clues on the strength of the economy. The greenback against a basket of currencies trades 0.05 percent up at 92.45, having touched a high of 92.83 on Wednesday, its highest since Dec. 28. FxWirePro's Hourly Dollar Strength Index stood at 70.89 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro extended its rebound from 4-month lows despite data showing Eurozone inflation slowed to 1.2 percent year-on-year in April, down from 1.3 percent in March, raising doubts about the European Central Bank's plan for withdrawing its monetary stimulus. The European currency traded 0.1 percent up at 1.1992, having touched a low of 1.1937 the day before, its lowest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at 2.96 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone retail sales figures and Markit Services and Services PMI, ahead of the U.S. unemployment rate and crucial Nonfarm payroll report. Immediate resistance is located at 1.2027 (5-DMA), a break above targets 1.2084 (May 1 Low). On the downside, support is seen at 1.1915 (Jan. 9 Low), a break below could drag it till 1.1880.
USD/JPY: The dollar declined, extending losses for the third straight session as investors await the U.S. nonfarm payrolls report, which is expected to show 192,000 jobs were added in April versus previous of 103,000. The major was trading 0.1 percent down at 109.08, having hit a high of 110.03 on Wednesday, its highest since Feb. 5. FxWirePro's Hourly Yen Strength Index stood at 78.37 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment rate and highly influential nonfarm payroll report. Immediate resistance is located at 109.53 (Apr. 27 High), a break above targets 110.48 (Feb. 2 High). On the downside, support is seen at 108.78 (Apr. 25 Low), a break below could take it lower 108.54 (Apr. 24 Low).
GBP/USD: Sterling consolidated near 3-1/2 month lows touched in the prior session as series of weak economic data and political concerns reduced expectations of a Bank of England interest rate hike next week. The major traded 0.05 percent up at 1.3575, having hit a low of 1.3538 the day before, it’s lowest since Jan. 12. FxWirePro's Hourly Sterling Strength Index stood at -74.36 (Slightly Bearish) by 0400 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3658 (5-DMA), a break above could take it near 1.3772. On the downside, support is seen at 1.3505 (Jan. 4 High), a break below targets 1.3458. Against the euro, the pound was trading 0.05 percent up at 88.29 pence, having hit a low of 88.40 pence on Thursday, it’s lowest since Mar. 15.
AUD/USD: The Australian dollar rose to a 4-day peak after the Reserve Bank of Australia monetary policy statement reiterated that the economy would grow faster this year and next but doubts inflation will reach the mid-point of its target band until 2020, indicating the rates are set to stay at record lows for a while. The Aussie trades 0.2 percent up at 0.7544, having hit a low of 0.7472 on Tuesday; it’s lowest since June. FxWirePro's Hourly Aussie Strength Index stood at 60.23 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7510, a break below targets 0.7457 (June. 6 Low). On the upside, resistance is located at 0.7525 (Apr. 30 Low), a break above could take it near 0.7620 (Apr. 24 High).
NZD/USD: The New Zealand dollar eased ahead of the Reserve Bank of New Zealand monetary policy meeting on May 10, where it is certain to keep rates at record lows, while predicting no hikes in the interest rate for months to come. The Kiwi trades 0.2 percent down at 0.7023, having touched a low of 0.6990 on Tuesday, its lowest level since Dec. 22. FxWirePro's Hourly Kiwi Strength Index was at -17.00 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7089 (Apr. 30 High), a break above could take it near 0.7157. On the downside, support is seen at 0.6970, a break below could drag it below 0.6940.
Equities Recap
Asian shares slumped, while the greenback held gains near a 4-month peak as investors turned their attention to the looming U.S. payrolls data for fresh catalysts.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.3 percent.
Tokyo's Nikkei eased 0.2 percent to 22,472.78 points, Australia's S&P/ASX 200 index fell 0.5 percent to 6,065.80 points and South Korea's KOSPI declined 0.6 percent to 2,471.47 points.
Shanghai composite index rose 0.1 percent to 3,103.19 points, while CSI300 index was trading 0.1 percent up at 3,793.27 points.
Hong Kong’s Hang Seng was trading 0.5 percent lower at 30,158.01 points. Taiwan shares added 0.2 percent to 10,529.37 points.
Commodities Recap
Crude oil prices declined, reversing some of its previous session gains, amid concerns over the prospect of geopolitical risks from possible new U.S. sanctions against Iran. International benchmark Brent crude was trading 0.2 percent down at $73.57 per barrel by 0430 GMT, having hit a high of $75.58 on Monday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.2 percent down at $68.36 a barrel, after rising as high as $69.53 in mid-April, its highest since Nov. 2014.
Gold prices edged up, extending gains for the third straight session, as investors awaited key U.S. jobs data due later in the day. Spot gold rose 0.1 percent at $1,313.25 per ounce at 0433 GMT, having eased to $1,301.70 on Tuesday, their lowest level since Dec 29. U.S. gold futures for June delivery were flat at $1,312.50 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.947 percent higher by 0.002 bps, while 5-year yield was 0.001 bps up at 2.783 percent.
The Australian government bonds gained after the Reserve Bank of Australia (RBA) provided no hint of near-term interest rate hike, also, hinting that inflation is about to remain low for some time. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 4 basis points to 2.770 percent, the yield on the long-term 30-year Note dipped 4-1/2 basis points to 3.296 percent and the yield on short-term 2-year slumped nearly 2 basis points to 2.046 percent.
The Canadian government bond prices were higher across a flatter yield curve, with the 10-year rising 34 Canadian cents to yield 2.325 percent. The gap between Canada's 10-year yield and its U.S. counterpart widened by 2.2 bps to a spread of -62.3 basis points.
