Forex today was driven by the risk-friendly market environment, as upbeat global macro data lifted the overall sentiment, with upbeat Australian dataflow adding to Friday’s solid US jobs report.
The Aussie led the G10 currencies higher, with the Kiwi following suit, climbing back above the 0.70 handle, despite holiday-thinned markets. The Yen, on the other hand, slipped amid increased appetite for risk/ higher-yielding assets such as Asian stocks. The Japanese benchmark, the Nikkei 225 index, rose to a one-week high on firmer exports-oriented stocks.
On the commodities’ front, both crude benchmarks traded on the defensive amid record US output and higher OPEC supplies while gold also inched lower near $ 1297.
Main topics in Asia
Canadian PM Trudeau calls Monday cabinet session, meeting with steel associations
Canadian Prime Minister Justin Trudeau has called a short-notice Cabinet meeting in Ottawa first thing Monday.
Iran calls on world to stand up to Trump - Reuters
As reported by Reuters, the Iranian Foreign Minister, Mohammad Javad Zarif, was quoted by state media as urging his counterparts in a letter to stand up against the US President's "bullying behavior" as Iran and other countries …
China Press: trade deal with US off if tariffs are imposed
China's state-run Xinhua news agency carried a weekend piece that warned that current agreements between the US and China would become void if the United States implements their tariffs or other trade measures targeting China.
Australia retail sales rise to 0.4 percent in April, beat estimates
Australia's consumption, as represented by retail sales, improved in the month of April, beating estimates, the Australian Bureau of Statistics (ABS) reported on Monday.
Australia Q1 wages up 0.8 percent to a record A$135.5 billion
Australian firms paid out a recordA$135.5 billion ($103 billion) in wages and salaries in the March quarter, representing a 0.8 percent rise quarter-on-quarter and 5 percent rise year-on-year, the data released by the Australian Bureau of Statistics showed.
Key Focus ahead
We have a quiet EUR macro calendar this week, with the UK construction PMI, the only first-tier economic release dropping at 0830 GMT. Markets are predicting the construction sector activity in the UK to return to contraction in May at 49.7 versus April’s 52.5. Meanwhile, the second-liner Sentix investor confidence and producers’ price index data from the Euroland will be also reported. The developments surrounding the Italian politics will also continue to have a bearing on the EUR markets.
Looking ahead, the US factory orders data and the British Retail Consortium (BRC) like-for-like retail sales will fill in an otherwise light NA calendar. Besides, the Bank of England (BOE) MPC member Tenreyro’s speech will be also closely eyed ahead of Tuesday’s UK services PMI report.
EUR/USD: Signs of bearish exhaustion, trade tensions and political uncertainty lingers
The odds are stacked against the EUR bulls. That said, the pay may find acceptance above 1.1723 (23.6% Fib R of 1.2414-1.1510) today if the Eurozone Sentix investor confidence and producer price index better estimates.
GBP/USD seeking 1.34 ahead of UK's PMI figures for Monday
The GBP/USD is lifting in risk-on markets to kick off the new trading week. Monday sees the UK Construction PMI for the month of May at 08:30 GMT, which is expected to contract to 49.7, from the previous reading of 52.5.
The week ahead: scheduled data to keep an eye on - Nomura
Analysts at Nomura highlighted the scheduled events for the major FX space.
All eyes on China this week - Nomura
Analysts at Nomura explained that they expect export growth to moderate in May on RMB appreciation over the past year and the slowdown in Europe and Japan, China’s second- and third-largest markets.
Gold will start to rebound in Q4 2018 - TDS
In its latest outlook on both the US dollar and gold, Bart Melek, Global Head of commodity strategy at TD Securities in Toronto, highlighted the following key points:
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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