The US$ ended the week on a firm note, underpinned by weakness in Sterling, which dragged the Euro lower, and also in the Australian and NZ dollars, which both finished on a soft note and look very heavy given the economic issues facing both countries. Cable saw heavy selling on Friday because the Brexit negotiations between the UK government and opposition collapsed and, adding to the confusion, further uncertainty lies ahead for the Conservative Party, who will be looking for a new leader after the PM, Theresa May, announced that she will stand down in June, whether her Brexit deal is approved by the House of Commons, or not. Elsewhere the currencies were choppy and the main action was seen in the metals, where Gold/Silver were under pressure from the stronger dollar. tocks were around 0.5% lower, while WTI was choppy, but finished towards session lows as renewed trade-war concerns took precedence over the increasing tensions between Saudi/Iran.
The coming week will start off with a rather thin calendar, with little to provide inspiration on Monday aside from the Japan Q1 GDP and then later, the Chicago Fed National Activity Index. Tuesday may see some action, with the RBA Governor Lowe due to speak, who will either stand his ground despite the recent downturn in Australian economic data, or who may shift towards an early hint of an easing bias at the next RBA meeting. We also get to see the minutes of the last meeting, so the Aud$ could have an interesting session. Wednesday will have the UK inflation data and then later, from the US, we get the FOMC Minutes which are likely to have a “steady as she goes” theme, while reminding us that the Fed remain “data-dependent” as to their outlook. Thursday’s focus will be on the flash, global PMIs for May, while Friday will wind the week up with the Japan National CPI, UK Retail Sales and the US Durable Goods Orders. Have a good week.
Note that the Aud$ has popped higher in early Monday trade following the surprise election result, pulling the Nzd$ along for the ride. The bigger picture remains unchanged and lower levels still lie ahead, I suspect.
Market moves, in brief:
FX: DXY 98.00 (+0.18%)
Bonds: US10Y; 2.395% (+0.02%), German 10Y; -0.103% (-8.5%), UK 10Y; 1.039% (-3.26%), Australian 10Y; 1.652% (+0.09%), NZ 10Y; 1.80% (+0.28 %), China 10Y; 3.281% (-0.46%)
Stock Indices: DJI; -0.38%, S+P; -0.59%, NASDAQ; -1.04%, EUStoxx50; -0.38%, FTSE100; -0.07%, Shanghai Composite; -2.48%,
Metals: Gold $1278 oz (-0.69%), Silver $14.43 oz (-0.93%), Copper $2.733 lb (-0.55%), Iron Ore $96.34 per tonne (NYMEX) (+0.22%),
Oil: WTI $ 62.68pb (-0.68%)
Economic data highlights will include:
Mon: Japan Preliminary Q1 GDP, Industrial Production, Capacity Utilisation, German PPI, EU Current Account, Chicago Fed National Activity Index
Tue: RBA Minutes, RBA Governor Lowe Speech, NZ Credit card Spending, UK Inflation Report Hearing, CBI Distributive Trade Survey – Orders, EU Consumer Confidence, US Existing Home Sales, Fed Speakers; Evans/Rosengren, Global Dairy Trade Index, API Weekly Crude Oil Stock Inventory
Wed: Australian WBC Leading Index, Q1 Construction Work Done, UK CPI, PPI, RPI, US Mortgage Approvals, FOMC Minutes, EIA Crude Oil Stocks Weekly Change
Thur: Japan Flash May Nikkei Mfg PMI, German Q1 GDP, EU Flash Manufacturing/Services/Composite PMIs, German IFO Business Climate/Expectations, US Flash PMIs, Jobless Claims, New Home Sales, Kansas Fed Mfg Activity,
Fri: NZ Trade Balance, Japan National CPI, UK Retail Sales, US Durable Goods Orders,
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