Market Roundup
•Greek Feb Credit Expansion (YoY) 3.0%,1.9% previous
•UK May Rightmove House Price Index (YoY) 0.6%,1.7% previous
•Spanish Consumer Confidence 84.5,82.5 previous
Looking Ahead Economic Data(GMT)
•12:45 French 12-Month BTF Auction 3.481% previous
•12:45 French 3-Month BTF Auction 3.781% previous
•12:45 French 6-Month BTF Auction 3.670% previous
•15:30 US 3-Month Bill Auction 5.250% previous
•15:30 US 6-Month Bill Auction 5.165% previous
Looking Ahead Events And Other Releases(GMT)
•13:30 US Fed Vice Chair for Supervision Barr Speaks
•13:30 US Fed Waller Speaks
•14:30 US Fed Governor Jefferson Speaks
•18:00 US FOMC Member Mester Speaks
Currency Forecast
EUR/USD: The euro eased against dollar on Monday as investors assed comments from officials from the European Central Bank (ECB) and the Federal Reserve after they warned that the monetary easing path remained uncertain. ECB board member Isabel Schnabel said in an interview last week with Nikkei the central bank may slash interest rates in June, but should be cautious about further cuts in borrowing costs given uncertainty over the outlook. Markets are pricing in around 65 bps (basis points) of ECB rate cuts in 2024, as per LSEG's rate probabilities app, compared with 67 bps on Friday. The euro eased to $1.0858, not far from the nearly two-month high of $1.0895 it touched last week.Immediate resistance can be seen at 1.0894(23.6%fib), an upside break can trigger rise towards 1.0914(Higher BB).On the downside, immediate support is seen at 1.0825 (38.2% fib), a break below could take the pair towards 1.0756(50% fib).
GBP/USD: The pound held steady on Monday as markets waited for April inflation data later in the week which is expected to show the rate of UK price rises falling back to the Bank of England's target.Sterling was unchanged from Friday's closing price at $1.2704. The pound has risen around 2% so far this month as the U.S. dollar has fallen on the back of weak growth and inflation figures, while British data has been stronger than expected.Data on Wednesday is expected to show that the UK's headline rate of inflation fell to 2.1% in April, down sharply from 3.2% in March, thanks mostly to a fall in the cap on household energy bills. Immediate resistance can be seen at 1.2717(23.6%fib), an upside break can trigger rise towards 1.2746(Higher BB).On the downside, immediate support is seen at 1.2683Daily low), a break below could take the pair towards 1.2636(38.2% fib).
USD/CHF: The dollar edged higher against the Swiss franc on Monday as investors awaited further clues to help chart the path of U.S. interest rates in the wake of cautious comments from Federal Reserve officials, even as inflation showed signs of cooling. Data last week showed U.S. consumer prices rose less-than-expected in April, leading to markets pricing in 50 basis points of Fed rate cuts this year.Yet various Fed officials subsequently sounded words of caution about when rates may fall, prompting market pricing to fall just below the 50 bp mark.The dollar index, which tracks the currency against six major peers, was last slightly higher at 104.51. It has fallen around 2% since hitting a more than five-month high in April. Immediate resistance can be seen at 0.9103 (Daily high), an upside break can trigger rise towards 0.9150 (23.6% fib).On the downside, immediate support is seen at 0.9039 (38.2% fib), a break below could take the pair towards 0.9017(Lower BB).
USD/JPY: The U.S. dollar initially dipped against yen on Monday as investors were on alert for signs of government intervention. The currency has moved in tight ranges in the past couple of trading days after a tumultuous start to May in the wake of suspected rounds of currency interventions by Tokyo to prop up the yen. The yen has depreciated by roughly 10% against the dollar so far this year despite the BOJ's decision in March to end eight years of negative rates, as markets focused on the still-huge divergence between U.S. and Japanese interest rates.BOJ has ruled out using monetary policy to affect currency moves, rising concern over the demerits of a weak yen has led some government and business executives to call on the central bank to hike interest rates from near-zero levels..Strong resistance can be seen at 156.58 (23.6%fib), an upside break can trigger rise towards 157.87(Higher BB).On the downside, immediate support is seen at 154.75(38.2% fib), a break below could take the pair towards 153.05(50% fib).
Equities Recap
European shares inched up on Monday but gains remained in check as a rise in commodity-linked stocks was offset by uncertainty around the outlook for interest rates.
UK's benchmark FTSE 100 was last up by 0.10 percent, Germany's Dax was last down up by 0.41 percent, France’s CAC was last up by 0.56 percent.
Commodities Recap
Gold prices touched a record high on Monday as recent economic data boosted bets for interest rate cuts by the U.S. Federal Reserve, while silver followed suit and surged to a more than 11-year high.
Spot gold rose 0.5% to $2,427.21 per ounce as of 1204 GMT after hitting a record high of $2,449.89 earlier in the session. U.S. gold futures gained 0.6% to $2,431.10.
Oil prices held steady on Monday amid political uncertainty in major producing countries after Iran's president died in a helicopter crash and Saudi Arabia's crown prince deferred a trip to Japan on account of his father, the king's, health.
Brent crude was down 35 cents at $83.63 a barrel by 1205 GMT. The U.S. West Texas Intermediate (WTI) June contract , set to expire on Tuesday, edged 43 cents lower to $79.63 a barrel. The more-active July contract was down 38 cents at $79.2.
