The week started with Asia and early Europe both being in risk-on mode, with the Aud and Kiwi being notable beneficiaries in the currency markets, while the US$ has come under pressure on all fronts, despite Friday’s strong employment data. That turned around during the course of the session, with Sterling coming under heavy selling pressure – for no particular reason – and dragging the Euro off its highs in sympathy. Aud and Nzd have maintained their strength through the day and look capable of heading higher.
The US stock indices enjoyed a positive session by finishing +0.5%, while gold was unchanged and oil was lower again, ending down 1.6% and looking sick.
In terms of data, the US Factory Orders fell by -0.8% in April, v exp -0.5%, while the ISM NY Business Index came in at 66.9, beating the previous reading of 64.3.
The main event on Tuesday will be the RBA Meeting although no change to policy is expected and the focus will be on the statement. Ahead of the RBA, the Asian timezone will also see the Australian Current Account (exp -$9.95 bio), TD Inflation and the Caixin China Services PMI. Later, in Europe and then in the US, the Composite/Services PMIs will be the main event. Also coming up later, in Europe in the day, will be the Global Dairy Trade Index and in the US, the API weekly Crude Oil Stock Inventory.
Over and above the light data calendar this week, the rhetoric around the ongoing escalation of a ‘trade war’ between the US, China, Europe, Canada and Mexico will continue to dominate trade, as will the political woes in Italy and the EU , which although currently looking a little calmer, could re-emerge at any time.
|INDICES / COMMODITIES|
|OIL (WTI): 64.61|