FX News Today
European Fixed Income Outlook: Markets are likely to begin the session on a stable footing given the steadying in stock markets in Asia, and lift in European and U.S. equity futures, which follows a paring of losses on Wall Street yesterday. Sino-U.S. trade tensions are still likely to remain a worry for investors given how entrench both the Trump administration and Beijing appear to be. In Europe today, the data calendar perks up a with the UK CBI industrial trends survey after German PPI data due. The central bankers conference in Sintra continues, and Brexit issues also remain in focus ahead of the next crucial EU summit. Germany auctions 30-year Bunds.
FX and Asia Markets Update: A pause in risk-off sentiment has seen stock markets recover some lost ground in Asia and the yen weaken as markets unwound some of the Japanese currency’s safe haven premium. Dollar bloc currencies have rebounded, with AUDJPY, a cross that often correlates inversely with pronounced directional swings in global stock markets, has rallied by 0.5%. Emerging market currencies have also lifted after many posted new year lows yesterday. USDJPY lifted to a two-day high of 110.25, putting a little distance in from yesterday’s 10-day low at 109.55 and returning the pairing to about the midway point of the range that’s been seen since the beginning of last week. EURUSD has been trading in a narrow range in the upper 1.1500s, capped below 1.1600 level. In stock markets, Wall Street pare the worst of intra-day losses yesterday, while Asian bourses gained, with the main Chinese indexes more than recovering intra-day losses. Despite the lift in stock markets, the Sino-U.S. trade spat is likely to remain a concern for investors, with both the Trump administration and Beijing looking entrenched in opposing positions.
Charts of the Day
Main Macro Events Today
- Speeches: ECB President Draghi, RBA Gov. Lowe, BOJ Gov. Kuroda and Fed’s Chair Powell.
- US Existing Home Sales and Current Account – Expectations –The current account deficit is expected to widen to -$129.0 bln in Q1, from -$128.2 bln in Q4. Existing home sales are projected to rebound 2.6% to 5.540 mln unit rate, following a weak start to Q2 with a 2.5% tumble in April to 5.460 mln.
- US Crude Oil Inventories
Support and Resistance Levels
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Andria Pichidi
Market Analyst
HotForex
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