28 May: Trend table outlook for FX, Commodities, Indices

By | May 28, 2018

The US$ was mixed on Friday, generally firm against Euro, where Italian and also Spanish politics continue to weigh it down, causing another move into safe-haven assets, sending EurJpy and EurChf sharply lower. Sterling, was also weighed down by politics, particularly after BOE Governor, Mark Carney said that additional stimulus may be needed in the event of a bad Brexit deal.

Stocks were a little lower (-0.25%) too, not helped by the sharp selloff in the WTI price (-4.5%), which hurt the energy sector. The selloff came about on signs of increasing US oil expansion and reports that OPEC and its allies could lift output in order to counter a supply shortage from Iran and Venezuela. Gold and Silver were slight lower but generally sidelined. US yields took another hit and closed the week at levels seen in mid December – at 94.25.

In terms of data, the US Durable Goods Orders Order fell by 1.7% April, although the poor reading stemmed almost entirely from a decline in contracts for Boeing planes. Most businesses took in more orders and increased investment last month, so overall it looks to be fairly mixed reading.

It is going to be a busy week ahead with most of the focus being on the latter half of the week, when the April US Personal Consumption/Expenditure (Thur) and the May Jobs/NFP/Average Hourly Earnings (May) data will be released. Before then today should be quiet, with both the UK and the US on holiday, and no data on the calendar, either. Tuesday will also see a thin calendar, while Wednesday will be busier with the release of the German CPI/HICP for May, as well as the US Q1 Preliminary GDP. Thursday will feature the EU CPI, while Friday, aside from the NFP will also see both the Markit and ISM Mfg PMIs. Have a good week.

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Trending Table

There are some interesting developments from Friday’s trade, with the Euro looking increasingly heavy on several fronts, both against the US$ and on the crosses, so trading it from the short side seems to be the plan. EurJpy looks particularly heavy. The US$ looks a bit scrappy, and for the time being the Yen and Chf remain in demand, while Sterling seems set to remain under pressure. The Aud and the Kiwi look mixed, although both seem firmer on the crosses, while a little heavy on Friday as lower oil/commodity prices weighed on the commodity bloc currencies..Note that AudNzd, while looking firm on the longer term charts, did actually make a key-day reversal on Friday and may be rather toppish here, so selling near the trend high of 1.0960, with a SL above 1.1000 may be a plan.

Talking of key reversals, WTI made one on the weekly charts and may have now run its course on the topside, at least for a while. Selling rallies is therefore preferred this week