Market Roundup
•Italian Apr Industrial Production (YoY) -2.9%forecast, -3.5% previous
•Italian Apr Industrial Production (MoM) -1.0% ,0.3% forecast,-0.5% previous
•EU Jun Sentix Investor Confidence 0.3 ,-1.5 forecast,-3.6 previous
Looking Ahead Economic Data(GMT)
•13:00 French 12-Month BTF Auction 3.487% previous
•13:00 French 3-Month BTF Auction 3.686% previous
•13:00 French 6-Month BTF Auction 3.600% previous
•14:00 US May CB Employment Trends Index 111.25 previous
•15:30 US 3-Month Bill Auction 5.250% previous
•15:30 US 6-Month Bill Auction 5.155% previous
•17:00 US 3-Year Note Auction 4.605% previous
Currency Forecast
EUR/USD: The euro fell sharply on Monday, hit by political uncertainty after gains by the far right in voting for the European Parliament on Sunday prompted a bruised French President Emmanuel Macron to call a snap national election.The uncertainty in France adds one more element to what will be a busy week for markets with crucial U.S. inflation data due on Wednesday, the same day as a Federal Reserve policy meeting, and then a Bank of Japan meeting rounding off the week.The euro dropped 0.6% on the dollar to $1.0733 , its lowest since May 9. It also fell 0.4% on sterling to a near two-year low of 84.53 pence , and was last down 0.6% on the Swiss franc at a seven-week low of 0.9626 francs. Immediate resistance can be seen at 1.0781(Daily high), an upside break can trigger rise towards 1.0809(38.2% fib).On the downside, immediate support is seen at 1.0741 (50% fib), a break below could take the pair towards 1.0671(61.8% fib).
GBP/USD: The pound slipped against the dollar on Monday as investors awaited key domestic economic data this week.British wage data for April, due Tuesday, is the main data point of this week, heading into that BoE meeting. Markets have seen a change in policy at that meeting as very unlikely since April's sticky services inflation. Pound dropped 0.2% against the dollar on Monday, to $1.2698, continuing to fall after a 0.5% drop Friday as hotter than expected U.S. jobs data caused markets to push back bets on the first Federal Reserve interest rate cut late into 2024. Immediate resistance can be seen at 1.2790(23.6%fib), an upside break can trigger rise towards 1.2823(Higher BB).On the downside, immediate support is seen at 1.2704(38.2%fib), a break below could take the pair towards 1.2629(50% fib).
USD/CHF: The dollar declined against the Swiss franc on Monday as investors awaited key inflation data and a Federal Reserve meeting scheduled for this week, looking for hints on the central bank's policy-easing stance this year. The Federal Reserve will conclude its two-day policy meeting on Wednesday. U.S. consumer inflation data will be another factor in the Fed's decision making. Markets dialed back expectations for rate cuts by the Fed in September after Friday's data, with pricing now reflecting a less-than-50% chance of a reduction. Expectations had risen as high as 69% last week.Traders also trimmed their expectations for the amount of easing this year, with pricing implying just one cut versus two prior to the payrolls data. Immediate resistance can be seen at 0.8952 (61.8% fib), an upside break can trigger rise towards 0.9021(50% fib).On the downside, immediate support is seen at 0.8897 (38.2% fib), a break below could take the pair towards 0.8824 (23.6% fib).
USD/JPY: The U.S. dollar steadied against yen on Monday as investors Bank of Japan meetings this week. Japan will be in focus this week, as the Bank of Japan is due to hold its two-day monetary policy meeting on Thursday and Friday, with the central bank widely expected to maintain short-term interest rates in a 0-0.1% range.Reuters reported last week that BOJ policymakers are brainstorming ways to slow its bond buying and may offer fresh guidance. The dollar was last up 0.1% on the Japanese currency at 156.85 yen , having jumped 0.7% on Friday after the payrolls print. Strong resistance can be seen at 157.02(23.6%fib), an upside break can trigger rise towards 157.87(Higher BB).On the downside, immediate support is seen at 154.93(38.2% fib), a break below could take the pair towards 153.35 (50%fib).
Equities Recap
A selloff in Europe set the tone for global markets on Monday as French President Emmanuel Macron's decision to call a snap election weighed on everything from the euro to banking stocks and government bonds.
UK's benchmark FTSE 100 was last down by 0.28 percent, Germany's Dax was last down by 0.67 percent, France’s CAC was last down by 1.76 percent.
Commodities Recap
Gold prices held steady on Monday after a sharp sell-off in the previous session on stronger-than-expected U.S. jobs data, with investors awaiting the Federal Reserve policy meeting this week for further direction.
Spot gold was up 0.1% at $2,295.90 per ounce. U.S. gold futures fell 0.5% to $2,313.70.
Oil prices edged up on Monday, buoyed by hopes of rising fuel demand this summer, though gains were capped by a strengthening of the dollar on receding expectations of imminent cuts to U.S. interest rates.
Brent crude futures gained 16 cents, or 0.2%, to $79.78 a barrel by 0950 GMT. U.S. West Texas Intermediate crude futures were up 6 cents at $75.59.
