Market Roundup
•U.S. Fed set to release policy statement at 1800 GMT
• Greek May CPI (YoY) -1.1%,-1.4% previous
• Greek May HICP (YoY) -0.7%, -0.9% previous
• US MBA Purchase Index 311.7, 296.0 previous
• US Mortgage Refinance Index 3,529.0, 3,166.7 previous
• US MBA 30-Year Mortgage Rate3.38%, 3.37% previous
Looking Ahead – Economic Data (GMT)
• 12:30 US May Real Earnings (MoM) 5.8% previous
• 12:30 US May CPI Index, s.a 255.90 previous
• 12:30 US May CPI, n.s.a (MoM) -0.67% previous
• 12:30 US May Core CPI Index 265.60 previous
• 12:30 US May CPI (YoY) 0.2% forecast, 0.3% previous
• 12:30 US May Core CPI (MoM) -0.1% forecast, -0.4% previous
• 12:30 US May CPI Index, n.s.a. 256.84 forecast, 256.39 previous
• 12:30 US May CPI (MoM) -0.1% forecast,-0.8% previous
• 12:30 US May Core CPI (YoY) 1.3% forecast, 1.4% previous
•13:00 Brazil May CPI (MoM) -0.46% forecast, -0.31% previous
• 13:00 Brazil May CPI (YoY) 1.80% forecast, 2.40% previous
• 13:30 US Seevol Cushing Storage Report -1.765M previous
• 14:30 Cushing Crude Oil Inventories -1.739M previous
•18:00 US May Federal Budget Balance -625.0B forecast, -738.0B previous
•18:00 US Fed Interest Rate Decision 0.25% forecast, 0.25% previous
Looking Ahead - Events, Other Releases (GMT)
•13:30 ECB's De Guindos Speaks
•18:00 US FOMC Statement
•18:30 FOMC Press Conference
Fxbeat
EUR/USD: The euro strengthened against dollar on Wednesday as dollar stumbled ahead of a U.S. Federal Reserve next move. No action is expected from the Fed, but any hint of taking the foot off the pedal could hurt risk sentiment and lift the dollar. More dovishness could have the opposite effect. Focus is on the Fed’s economic outlook and whether a steepening of the U.S. yield curve during last week’s bond market selloff might prompt intervention to keep long-term borrowing costs down. Immediate resistance can be seen at 1.1391 (Daily high), an upside break can trigger rise towards 1.1420 (Higher BB).On the downside, immediate support is seen at 1.1324 (5 DMA), a break below could take the pair towards 1.1250 (9 DMA).
GBP/USD: Sterling rose against the weaker dollar and stayed flat versus the euro on Wednesday as Brexit uncertainty, the prospect of negative interest rates and Britain’s large coronavirus death toll still weighed on the currency. Infection rates from the virus have been falling and Britain said it will reopen shops on Monday together with zoos and drive-in cinemas. But the fact that more 50,000 people have died from COVID-19, the disease caused by the virus, left companies struggling and investor confidence weak. The pound was last changing hands at $1.2774, up 0.4% on the day against the greenback. But was flat versus the euro at 89.02 pence. Immediate resistance can be seen at 1.2778 (5 DMA), an upside break can trigger rise towards 1.2816 (Higher BB).On the downside, immediate support is seen at 1.2785 (5 DMA), a break below could take the pair towards 1.2605 (9 DMA).
USD/CHF: The dollar declined against the Swiss franc on Wednesday as caution set in ahead of a U.S. Federal Reserve policy decision that may see focus turn toward yield curve control. Investor sentiment has been buoyant as most countries have started the process of re-opening their economies and U.S. data supported views that an economic recovery is on the cards. But hopes for a full-fledged recovery still seem a distant possibility. The Fed statement is expected at 1800 GMT, followed by a news conference by Fed Chair Jerome Powell. Immediate resistance can be seen at 0.9535 (50% fib), an upside break can trigger rise towards 0.9570 (50% fib).On the downside, immediate support is seen at 0.9447 (38.2% fib), a break below could take the pair towards 0.9341 (23.6% fib).
USD/JPY: The dollar declined against the Japanese yen on Wednesday as the dollar weakened amid a cautious mood ahead of the U.S. Federal Reserve’s verdict on the health of the economy.Investors await to see if the U.S. Fed reinforces the upbeat tone set by the latest prospects of economic recovery. Amid speculation that it might take measures to curb a recent steepening of the U.S. yield curve, the greenback weakened broadly. Strong resistance can be seen at 108.08 (38.2 % fib), an upside break can trigger rise towards 108.29 (9 DMA).On the downside, immediate support is seen at 106.71 (50% fib), a break below could take the pair towards 106.50 (Lower BB).
Equities Recap
European shares rose on Wednesday, led by banks, with investors awaiting the U.S. Federal Reserve’s first economic projections since the COVID-19 pandemic set off a recession in February.
At (GMT 12:10),UK's benchmark FTSE 100 was last trading up at 0.19 percent, Germany's Dax was down by 0.05 percent, France’s CAC finished was up by 0.06 percent.
Commodities Recap
Gold rose for a third straight session on Wednesday, helped by a weaker dollar and on expectations the Federal Reserve will maintain its accommodative policy to support the U.S. economy through the coronavirus crisis.
Spot gold was up 0.2% to $1,717.97 per ounce at 0928 GMT, having jumped more than 1% in the last session. U.S. gold futures gained 0.2% to $1,725.30.
Oil fell more than 1% towards $40 a barrel on Wednesday after a report showed a rise in crude inventories in the United States, reviving concerns about oversupply and weak demand due to the coronavirus crisis.
Brent crude fell 70 cents, or 1.7%, to $40.48 a barrel by 0820 GMT. U.S. West Texas Intermediate (WTI) dropped 98 cents, or 2.5%, to $37.96.
Treasuries Recap
Demand for Euro zone government debt was little changed on Wednesday, after several governments launched syndicated bond sales on Tuesday and were met with strong demand.
The benchmark 10-year German Bund yield held near yesterday’s close, at -0.315%, with French and Dutch yields down less than 1 basis point (bps) .
Demand for riskier Italian debt fell slightly, with Italy’s 10-year government bond yield up around 1 basis point at 1.473% .
