Market Roundup
• Australia Private New Capital Expenditure (QoQ) (Q1): 6.5%, 1.2% forecast, 0.7% previous
• Australia Plant/Machinery Capital Expenditure (QoQ) (Q1): 18.1%, -1.3% previous
• Australia Building Capital Expenditure (QoQ) (Q1): -3.8%, 2.5% previous
• New Zealand Economic Forecast (Jan): -15.060B, -16.934B previous
• New Zealand Net Debt Forecast (Jan): 42.40%, 43.30% previous
• New Zealand Budget Balance (Jan): -9.310B, -14.800B previous
Looking Ahead Economic Data (GMT)
• 10:00 EU Selling Price Expectations (May): 31.1 previous
• 10:00 EU Business Climate (May): -0.28 previous
• 10:00 EU Business and Consumer Survey (May): 92.8 forecast, 93.0 previous
• 10:00 EU Industrial Sentiment (May): -8.0 forecast, -7.7 previous
• 10:00 EU Services Sentiment (May): 0.2 forecast, 0.9 previous
• 10:00 EU Consumer Confidence (May): -19.0 forecast, -20.6 previous
Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro edged lower against the dollar on Thursday as escalating tensions in the Middle East clouded the outlook for an imminent deal to open the Strait of Hormuz and added to concerns about the health of the global economy.Prices of crude oil, a key resource for Energy-deficient Europe, shot up over 2.5% to $97 a barrel as hostilities escalated between Iran and the U.S., while Kuwait said that its air defences were intercepting hostile missile and drone threats, similar to the attacks seen during the heat of the conflict in March. Markets will now look ahead to today's release of the Fed's preferred inflation gauge, the core PCE deflator, which will help shape the broader interest rate outlook. Immediate resistance can be seen at 1.1648(May 25th high), an upside break can trigger rise towards 1.1693(SMA 20).On the downside, immediate support is seen at 1.1577(23.6%fib), a break below could take the pair towards 1.1561(Lower BB).
GBP/USD: Sterling dipped against the dollar on Thursday as a fresh exchange of airstrikes between Iran and the U.S. dented hopes for a peace deal.Iran's Revolutionary Guards said on Thursday it targeted a U.S. airbase after the U.S. military carried out what a Washington official said were strikes aimed at an Iranian drone operation near the Strait of Hormuz, hours after President Donald Trump rejected a report he was close to a compromise deal with Tehran. The oil supply disruption due to the closure of the Strait of Hormuz has ignited inflation fears in countries dependent on oil imports, straining their current accounts and forcing a hawkish tilt in central banks across developing economies to stabilise their currencies. Immediate resistance can be seen at 1.3427(Daily high), an upside break can trigger rise towards 1.3489(50%fib).On the downside, immediate support is seen at 1.3353(38.2%fib), a break below could take the pair towards 1.3278(Lower BB).
AUD/USD: Australian dipped on Thursday as soft consumer spending data added to the case against a further rise in domestic interest rates.Australian data showed household spending fell 1.1% in April as consumers cut back on travel, clothing, and food amid weaker confidence from Middle East conflict concerns.Wednesday’s weaker-than-expected CPI data strengthened expectations that the Reserve Bank of Australia can keep rates unchanged for now.The report outweighed data showing business investment jumped 6.5% in Q1 due to strong demand for data equipment, much of which was imported. Markets now imply almost no chance of a June move, while the probability of an August hike has more than halved to 40%. Immediate resistance can be seen at 0.7178(38.2%fib), an upside break can trigger rise towards 0.7189(SMA 20).On the downside, immediate support is seen at 0.7104(Lower BB), a break below could take the pair towards 0.7088(50%fib).
USD/JPY: The U.S. dollar edged higher on Thursday as yen slumped toward levels that risked fresh intervention as a flare-up of tensions in the Middle East renewed concerns about imported energy inflation.Oil prices surged on Thursday after Tehran said it targeted a U.S. airbase following reported strikes by Washington on an Iranian drone operation near the Strait of Hormuz.Japan's dependence on imported energy has made its economy, bond market, and currency vulnerable to the sharply higher petroleum prices caused by the three-month conflict. Inflation erodes the value of the fixed payments from debt. Immediate resistance can be seen at 159.49(38.2%fib) an upside break can trigger rise towards 160.00(Psychological level) .On the downside, immediate support is seen at 158.67(50%fib) a break below could take the pair towards 158.27(April 16th low ).
Equities Recap
Asian shares came off their record highs on Thursday as new air strikes by the U.S. and Iran stoked fears of an escalation in their conflict and a prolonged disruption to oil flows through the Strait of Hormuz.
Japan’s Nikkei 225 was up by 0.53% , South Korea’ KOSPI was down at 0.53%, Hang Sang was down at 1.45%
Commodities Recap
Gold prices dropped to a two-month low on Thursday as fresh U.S. strikes on Iran strengthened the dollar and lifted oil prices, raising inflation concerns and clouding the interest rate outlook.
Spot gold was down 1.8% at $4,375.78 per ounce, as of 0611 GMT, earlier falling to its lowest level since March 26. U.S. gold futures for June delivery fell 1.6% to $4,373.90.
Oil prices jumped more than 2% on Thursday after Iran's Revolutionary Guards said they targeted a U.S. airbase in response to a U.S. attack in the port city of Bandar Abbas.
Brent crude futures rose $2.34, or 2.48%, to $96.63 a barrel by 0701 GMT, while the more active August contract gained $2.24 or 2.43%, to $94.49.
The July contract is set to expire on Friday.U.S. West Texas Intermediate futures were up $2.26, or 2.55%, at $90.94.
