28 May: US$ mixed/higher. Yields lower. WTI -4.5%. US/UK holiday today may mean a quiet session.

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.

Over the weekend, further developments in the Korean situation means that the Trump/Kim meeting may now be back on, while Italy has been plunged into fresh political turmoil after prime minister-designate Giuseppe Conte formally rejected a mandate to form a new populist government. In early trade, the Euro has gapped a little higher, although that may not last long if the Italian political woes continue, while US$Jpy and the AUD$ are also a little firmer.

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.

CURRENCIES
EURUSD: 1.1680
Res  1.1700  1.1735  1.1750
Sup  1.1645  1.1620  1.1600
USDJPY: 109.70
Res  109.75  110.05  110.40
Sup  109.20  109.05  108.85
GBPUSD: 1.3315
Res  1.3325  1.3350  1.3385
Sup  1.3290  1.3270  1.3250
USDCHF: 0.9910
Res  0.9935  0.9960  0.9980
Sup  0.9885  0.9850  0.9825
AUDUSD: 0.7560
Res  0.7585  0.7605  0.7620
Sup  0.7540  0.7520  0.7500
NZDUSD: 0.6920
Res  0.6940  0.6975  0.7000
Sup  0.6905  0.6870  0.6850
INDICES / COMMODITIES
S&P: 2720
Res  2735  2745  2755
Sup  2715  2705  2690
DJ30: 24746
Res  24880  24975  25080
Sup  24680  24580  24475
SPI200: 6005
Res  6020  6045  6065
Sup  5995  5975  5945
XAUUSD: 1301
Res  1305  1310  1315
Sup  1300  1295  1290
XAGUSD: 16.49
Res  16.60  16.70  16.85
Sup  16.40  16.30  16.20
WTI: 67.44
Res  68.55  69.45  70.50
Sup  66.75  65.55  64.25