21 May: Increased trade tensions send stocks lower. RBA in focus on Tuesday, along with US/China developments.

By | May 21, 2019

 

Monday has been a rather non-descript session as far as FX/commodities are concerned, with the main focus being on the stock markets,. The US indices are down by around 0.5%/1.5%, not liking the developments in the trade issues between the US/China, where neither side shows any sign of backing down on their existing stance, and with the tech sector leading the way lower. Things have taken a turn for the worse beacause the US administration appears to be increasing efforts to halt supplies to the Chinese telecom company, Huawei, with Google now halting co-operation on its Android platform, and joining Intel, Qualcomm,  Lumentum and Broadcom in doing so.

Elsewhere, it has been very quiet, with the metals and oil doing very little, while currencies have been equally uninspiring. Apart from the gap/bounce in the Australian dollar at the open on Monday, there has been very little going on, and with a thin calendar for the major EU/US currencies today, Tuesday may be a similar type of session.

Ahead of that, we may see some action in Asia as Tuesday with potential for further volatility in the Aud$, following on from the post-election bounce seen yesterday. The RBA Governor Lowe is due to speak at around Asian lunch time, and who will either stand his ground in wanting more time to assess the economic conditions, despite the recent downturn in Australian economic data, or who may shift towards an early hint of an easing bias at the next RBA meeting. Before then, we also get to see the minutes of the last meeting, so the Aud$ could have an interesting session. Later on, Europe will look to the UK Inflation Report Hearing, CBI Distributive Trade Survey – Orders and to the EU Consumer Confidence for guidance ahead of the US session, when the focus will be on the Existing Home Sales. Of other note, the Fed Speakers will be Evans/Rosengren, while the Global Dairy Trade Index and the API Weekly Crude Oil Stock Inventory will also be released.

Market moves, in brief:          

FX: DXY 97.95 (-0.06%)

Bonds: US10Y; 2.42% (+0.91%), German 10Y; -0.087% (+15.7%), UK 10Y; 1.063% (+2.35%), Australian 10Y; 1.69% (+2.03%), NZ 10Y; 1.82% (+1.11 %), China 10Y; 3.28% (+0.02%)

Stock Indices: DJI; -0.33%, S+P; -0.67%, NASDAQ; -1.46%, EUStoxx50; -1.63%, FTSE100; -0.51%, Shanghai Composite; -0.40%,

Metals: Gold $1278 oz (+0.02%), Silver $14.46 oz (+0.44%), Copper $2.73 lb (-0.27%), Iron Ore $96.38 per tonne (NYMEX) (0.04%),

Oil: WTI $ 63.17 pb (+0.5%)

Economic data highlights will include:

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

CURRENCIES
EURUSD: 1.1166
Res  1.1175  1.1190  1.1205
Sup  1.1150  1.1130  1.1110
USDJPY: 110.08
Res  110.25  110.50  110.70
Sup  109.80  109.60  109.40
GBPUSD: 1.2722
Res  1.2750  1.2775  1.2810
Sup  1.2700  1.2675  1.2650
USDCHF: 1.0082
Res  1.0100  1.0120  1.0140
Sup  1.0070  1.0055  1.0035
AUDUSD: 0.6909
Res  0.6920  0.6935  0.6950
Sup  0.6890  0.6865  0.6845
NZDUSD: 0.6532
Res  0.6545  0.6555  0.6570
Sup  0.6515  0.6500  0.6485
INDICES / COMMODITIES
S&P.fs: 2846.78
Res  2855.00  2870.00  2885.00
Sup  2830.00  2815.00  2800.00
DJ30.fs: 25716.00
Res  25765.00  25845.00  25925.00
Sup  25635.00  25565.00  25485.00
SPI200.fs: 6445
Res  6455  6470  6485
Sup  6425  6410  6395
XAUUSD: 1277.70
Res  1285.00  1290.00  1295.00
Sup  1275.00  1270.00  1265.00
XAGUSD: 14.46
Res  14.50  14.60  14.70
Sup  14.35  14.25  14.15
WTI.fs: 63.28
Res  63.45  63.90  64.40
Sup  62.80  62.25  61.60