Market Roundup
• German Retail Sales (MoM) (Apr): -0.3%, -0.4% forecast, -0.3% previous.
• German Retail Sales (MoM) (Apr): -0.3%, -0.4% forecast, -0.3% previous.
• UK Nationwide HPI (MoM) (May): -0.6%, -0.1% forecast, 0.4% previous.
• UK Nationwide HPI (YoY) (May): 1.7%, 3.0% previous.
• Germany Retail Sales (YoY) (Apr): -0.3%, 2.7% previous.
• Australia Commodity Prices (YoY) (May): 16.8%, 15.1% previous.
• Switzerland GDP (QoQ) (Q1): 0.7%, 0.5% forecast, 0.2% previous.
• Switzerland GDP (YoY) (Q1): 0.5%, 1.0% previous.
• Italy HCOB Manufacturing PMI (May): 52.9, 52.0 forecast, 52.1 previous.
• France HCOB Manufacturing PMI (May): 49.7, 48.9 forecast, 52.8 previous.
• Germany HCOB Manufacturing PMI (May): 50.1, 49.9 forecast, 51.4 previous.
• Eurozone HCOB Manufacturing PMI (May): 51.6, 51.4 forecast, 52.2 previous.
• Eurozone M3 Money Supply (Apr): 17,433.9B, 17,446.5B previous.
• Eurozone M3 Money Supply (YoY) (Apr): 2.7%, 3.3% forecast, 3.2% previous.
•Eurozone Loans to Non-Financial Corporations (Apr): 3.4%, 3.1% forecast, 3.2% previous.
•Eurozone Private Sector Loans (YoY): 3.0%, 3.0% forecast, 3.0% previous.
•UK S&P Global Manufacturing PMI (May): 53.9, 53.7 forecast, 53.7 previous.
•France 12-Month BTF Auction: 2.588%, 2.577% previous.
•France 3-Month BTF Auction: 2.289%, 2.277% previous.
•France 6-Month BTF Auction: 2.440%, 2.385% previous.
•Canada S&P Global Manufacturing PMI (May): 52.9, 53.3 previous.
•US S&P Global Manufacturing PMI (May): 55.1, 55.3 forecast, 54.5 previous.
•US ISM Manufacturing PMI (May): 54.0, 53.3 forecast, 52.7 previous.
•US Construction Spending (MoM) (Apr): 0.4%, 0.3% forecast, 0.2% previous.
•US ISM Manufacturing Employment (May): 48.6, 46.4 previous.
•US ISM Manufacturing Prices (May): 82.1, 85.3 forecast, 84.6 previous.
•US ISM Manufacturing New Orders Index (May): 56.8, 54.1 previous.
Looking Ahead Economic Data (GMT)
•16:00 US Atlanta Fed GDPNow (Q2): 3.8% forecast, 3.8% previous.
•16:00 US 3-Month Bill Auction: 3.595% previous.
•16:00 US 6-Month Bill Auction: 3.650% previous.
Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro dipped against the dollar on Monday as investors stayed wary of a potential U.S.–Iran deal to reopen the Strait of Hormuz, a development that could ease inflation pressures and reduce expectations for European Central Bank tightening.The U.S. said it struck Iranian military sites at the weekend and Iran's Revolutionary Guards said on Monday it had targeted a U.S. base in response, but President Donald Trump reiterated that Iran really wanted to make a deal.Germany’s 2-year yields , more sensitive to expectations for policy rates, rose 3 basis points (bps) to 2.56%. They reached 2.771% in late March, the highest since July 2024.Money markets are pricing the ECB deposit facility rate at 2.58% by December , up from the current 2% but slightly down from the 2.53% level seen last Friday. Immediate resistance can be seen at 1.1658(Daily 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: The British pound dipped against the dollar on Monday as investors awaited progress on peace talks between the U.S. and Iran.Negotiators from the U.S. and Iran are still working on a deal, but fresh attacks in the Gulf have challenged optimism about the reopening of the Strait of Hormuz, the key oil and gas artery that has been closed to most maritime traffic since the start of the war in February. The Bank of England had been expected to lower interest rates twice this year but markets quickly moved to price in rate hikes as investors believed that the BoE would need to take action to combat energy-driven inflation.Markets are now pricing in about 35 basis points of monetary policy tightening this year, implying one quarter-point hike and around a 40% chance of a second.Immediate resistance can be seen at 1.3461(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 steadied against dollar on Monday as markets looked ahead to Middle East peace talks, RBA remarks, and key domestic data releases.Trump said he would soon decide on a proposal to extend the ceasefire with Iran, but major disagreements between the two sides remain unresolved.Australia's Q1 GDP data is due Wednesday, with growth expected to slow to 0.5% q/q from 0.8% in Q4, reflecting the impact of the war and higher interest rates.RBA Governor Michele Bullock will testify before lawmakers on Thursday, while Deputy Governor Andrew Hauser speaks on Friday, with both likely to maintain a hawkish tone as inflation remains above target.Weak employment and inflation data have reduced the probability of a June rate hike to 5%, with markets also seeing a small chance that the RBA's tightening cycle has already ended. Immediate resistance can be seen at 0.7198(38.2%fib), an upside break can trigger rise towards 0.7203 (May 29th high).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 but as gains were capped by the ongoing threat of Japanese FX intervention.Meanwhile, wide short-end yield differentials between Japanese and U.S. bonds favored the dollar, though narrower long-end spreads limited upside momentum.On the policy front, investors remain divided over whether the Bank of Japan will deliver another interest rate hike this month, as policymakers weigh growing uncertainties linked to tensions in the Middle East.Former BoJ Deputy Governor Masazumi Wakatabe said it is important to assess whether Japan’s economy can withstand tighter monetary policy.The BoJ’s April Summary of Opinions showed most policymakers favored a near-term rate hike while highlighting inflation risks. 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
European shares edged lower on Monday as rising Middle East tensions dampened hopes for a swift end to the conflict, while investors also assessed corporate dealmaking involving easyJet and Universal Music Group.
At GMT (13:40) UK's benchmark FTSE 100 was last trading down at 1.02 percent, Germany's Dax was down by 0.67 percent, France’s CAC was down by 0.96 percent.
Commodities Recap
Gold prices fell nearly 2% on Monday as escalating tensions in the Middle East heightened inflation concerns and reinforced expectations that central banks may keep monetary policy tighter for longer.
Spot gold was down 1.9% at $4,451.65 per ounce as of 10:01 a.m. EDT (1401 GMT) after hitting a two-week high on Friday.U.S. gold futures fell 2.5% to $4,479.20.
Oil prices surged more than $3 a barrel on Monday after fresh military strikes between the U.S. and Iran heightened geopolitical tensions, while Israel ordered troops deeper into Lebanon as fighting intensified against the Iran-backed Hezbollah group.
Brent futures were up $3.43 or 3.8% at $94.55 a barrel at 1314 GMT. U.S. crude futures rose $3.87 or 4.4% to $91.23 a barrel. Over May, Brent and WTI lost around 19% and 17%, respectively. It was both contracts' biggest monthly fall in absolute terms since March 2020 when the COVID-19 pandemic slashed energy demand.
