Market Roundup
• Japan Industrial Production (MoM) (Apr) 0.5%, 0.8% forecast,-0.4% previous
• Japan Capacity Utilization (MoM) (Apr) -0.8% , forecast,-1.2% previous
• German CPI (MoM) (May)-0.2%, -0.2% forecast, 0.6% previous
• German CPI (YoY) (May) 2.6%, 2.6% forecast, 2.9% previous
• UK Manufacturing Production (MoM) (Apr) 0.4%, -0.2% forecast, 1.2% previous
• UK Monthly GDP 3M/3M Change (Apr) 0.7%, 0.7% forecast, 0.6% previous
• UK Trade Balance Non-EU (Apr) -13.05B, -15.20B previous
• UK Trade Balance (Apr) -26.05B, -22.50B forecast, -27.22B previous
• UK Industrial Production (MoM) (Apr) 0.0%, 0.1% forecast, -0.2% previous
• German HICP (MoM) (May) -0.1%, -0.1% forecast, 0.5% previous
• German HICP (YoY) (May) 2.7%, 2.7% forecast, 2.9% previous
• UK Construction Output (MoM) (Apr) 0.1%, -0.7% forecast, 1.5% previous
• UK Industrial Production (YoY) (Apr) -0.2%, -0.1% forecast, 0.0% previous
• UK Manufacturing Production (YoY) (Apr) 1.0%, 0.4% forecast, 1.2% previous
• U.K. Construction Output (YoY) (Apr) -1.0%, -1.7% forecast, -0.3% previous
• UK GDP (YoY) (Apr) 1.2%, 1.3% forecast, 1.2% previous
• UK Index of Services 0.8%, 0.8% forecast, 0.8% previous
Looking Ahead Economic Data (GMT)
• 12:00 UK NIESR Monthly GDP Tracker 0.8% previous
Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Summaries
EUR/USD : The euro dipped against dollar on Friday as investors awaited the European Central Bank's policy announcement on Thursday. The European Central Bank is all but certain to raise interest rates on Thursday in the hope of nipping higher inflation in the bud before a surge in energy costs triggered by the Iran war spreads more broadly across the euro zone economy.The well-telegraphed move would come as inflation in the 21-country currency bloc is already above 3%, well in excess of the ECB's 2% target, and economic growth is very weak - a backdrop that has economists split over the case for tighter policy.ECB policymakers, some of whom had already pushed for action in April, are nonetheless expected to press ahead, seeking to keep a lid on inflation expectations and to safeguard their credibility after being slow to react to a post-pandemic inflation spike in 2022. Immediate resistance can be seen at 1.1593(38.2%fib), an upside break can trigger rise towards 1.1612(SMA 20).On the downside, immediate support is seen at 1.1517(Lower BB), a break below could take the pair towards 1.1431(23.6%fib).
GBP/USD: The pound edged toward its strongest weekly performance in nearly a month on Friday, supported by a weaker U.S. dollar as optimism grew over a potential Middle East peace agreement. The move reflected improved risk sentiment in currency markets, with investors rotating away from safe-haven assets.Sterling showed limited reaction to domestic data indicating early signs of economic impact from the Iran conflict. The UK economy contracted by 0.1% in April, marking its first monthly decline since August, as disruptions linked to the conflict including the cancellation of Formula 1 Grand Prix races and other Gulf sporting events hit the entertainment and leisure sectors.Data released by the Office for National Statistics (ONS) highlighted broader weakness in output, with the services sector falling 0.2% in April. The decline was driven largely by weaknesses in administrative and support services, as well as the arts, recreation, and entertainment industries, suggesting that geopolitical tensions are beginning to weigh on parts of the UK economy.Immediate resistance can be seen at 1.3424(SMA 20), an upside break can trigger rise towards 1.3493(50%fib).On the downside, immediate support is seen at 1.3355(38.2%fib), a break below could take the pair towards1.3334(Lower BB).
AUD/USD: Australian dollar eased on Friday as investors assess U.S.–Iran peace developments, leading to a partial reversal of recent risk-on flows.Markets showed signs of fatigue as the initial relief rally lost momentum, with traders questioning whether diplomatic progress would translate into a firm, near-term agreement.Sentiment had initially been supported by comments from U.S. President Donald Trump, who signalled renewed optimism around a potential peace agreement after pausing planned military action against Iran.Attention now shifts to the Reserve Bank of Australia policy meeting due on Tuesday, where the central bank is widely expected to leave the Official Cash Rate unchanged at 4.35%. The decision will be closely monitored for any forward guidance on inflation and the timing of potential future policy adjustments. Immediate resistance can be seen at 0.7170(38.2%fib), an upside break can trigger rise towards 0.7189(SMA 20).On the downside, immediate support is seen at 0.7027(50%fib), a break below could take the pair towards 0.7000(50%fib).
USD/JPY: The dollar gained traction on Friday as yen weakened ahead of Bank of Japan's policy meeting next week.The Bank of Japan is expected to raise interest rates to a 31-year high next week and signal further tightening, remaining focused on inflation risks stemming from the Middle East conflict despite the governor's absence.The move would align the BOJ with other central banks tightening policy, including the European Central Bank, which delivered a widely expected rate hike on Thursday.The hike would be the first since December, marking a shift away from the BOJ’s cautious stance and the remaining legacy of its earlier radical stimulus, as it moves toward a more conventional focus on fighting inflation. Immediate resistance can be seen at 160.85(23.6%fib) an upside break can trigger rise towards 161.06(Higher BB) .On the downside, immediate support is seen at 159.68(SMA 20) a break below could take the pair towards 159.00(Psychological level).
Equities Recap
Asian stocks extended their global rally on Friday on hopes of a Middle East peace deal, while the dollar and bond yields fell and oil prices hit two-month lows, easing inflation concerns.
Japan’s Nikkei 225 was up by 2.87% , Hang Seng was up at 1.64%, China A50 was up at 1.50%
Commodities Recap
Gold prices fell on Friday and were set for a weekly loss, weighed down by inflation concerns and expectations of further U.S. Federal Reserve rate hikes.
Spot gold was down 0.8% at $4,182.47 per ounce, as of 0610 GMT, and was set for a weekly loss of 3.4%. U.S. gold futures for August delivery rose 2.2% to $4,203.60.
Oil prices fell more than 2% on Friday, extending the previous session’s losses after U.S. President Donald Trump scrapped plans to strike Iran, easing fears of a broader escalation following earlier tit-for-tat attacks.
Brent futures were down $2.11 or 2.3% at $88.27 a barrel by 0640 GMT, while U.S. West Texas Intermediate (WTI) crude dropped $1.90, or 2.2%, to $85.81.
