30 May: Italian political woes hits stocks, Euro. More to come. German CPI, US GDP/PCE ahead.

By | May 30, 2018

 

Italy’s turmoil was again the focus in European trading with the impact spilling across asset classes, including stocks, which headed lower in Europe, where most of the damage was done. By the time the US got going, the markets generally consolidated. Given the rising tensions in Europe, the Euro dived, while the Chf and the Jpy were the main beneficiaries, as the move away from Italian bonds benefited US Treasuries, with 10-year yields having fallen heavily to 2.76% due to safe haven demand, dragging both US$Jpy and EurJpy lower, and looking sick at the end of the session. Commodity currencies also headed lower due to the risk-off mood, while Gold ended up by around 0.25%.  The Euro and Italian bonds were eventually given a mild lift after the Five Star leader, Luigi Di Maio, said the never sought to leave the Euro. EurUsd has since remained choppy, but towards the lower end of the day’s range.

As we head into June, the DXY is currently up by 5.5% – and looks to be headed higher.

Wednesday gets underway with the Japan Retail trade for April, the Consumer Confidence for May, and speeches from the BOJ’s Kuroda and the RBNZ’s Orr, while the Australian Building Permits will be the only other major in interest in Asia.  Europe will focus in the German CPI/HICP (CPI, exp 0.3%mm, 2.0%yy; HICP, exp 1.8%yy) and the April Import/Export Index. The German Unemployment and the Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate for May, will also be released. The US session will feature the Q1 Preliminary GDP (exp 2% qq, 2.3% annualised). Also from the US we get the ADP Jobs data (exp +189k), the Wholesale Inventories for April and the US Personal Consumption/Expenditure for Q1 (Prices exp 2.7%, Expenditure exp 2.5%). The SNB’s Jordan will be speaking late in the day. The API Weekly Crude Oil Stock Inventory will also be released

I am on a plane later today and there will be no further updates till next week. Have a good one.

CURRENCIES
EURUSD: 1.1538
Res  1.1550  1.1590  1.1640
Sup  1.1510  1.1480  1.1440
USDJPY: 108.69
Res  108.80  109.10  109.30
Sup  108.40  108.20  108.00
GBPUSD: 1.3253
Res  1.3275  1.3300  1.3325
Sup  1.3230  1.3205  1.3175
USDCHF: 0.9911
Res  0.9930  0.9950  0.9980
Sup  0.9900  0.9880  0.9850
AUDUSD: 0.7505
Res  0.7525  0.7550  0.7580
Sup  0.7495  0.7475  0.7445
NZDUSD: 0.6894
Res  0.6920  0.6950  0.6975
Sup  0.6875  0.6850  0.6825
INDICES / COMMODITIES
S&P: 2692.60
Res  2705  2720  2730
Sup  2675  2660  2650
DJ30: 24339.00
Res  24490  24620  24745
Sup  24230  24125.  24020
SPI200: 5966
Res  5990  6030  6065
Sup  5945  5905  5870
XAUUSD: 1299
Res  1305  1310  1315
Sup  1295  1290  1285
XAGUSD: 16.39
Res  16.50  16.60  16.70
Sup  16.30  16.20  16.05
WTI: 66.84
Res  67.30  68.00  69.00
Sup  66.40  65.75  65.15