It was mostly a fairly quiet session although the ECB’s Praet provided clearer outlook on the ECB’s view towards inflation which was then backed up by Hansson and BuBa’s Weidmann who reiterated the same mantra, which had the effect of pushing the Euro higher. At around the same time stories began to emerge of further Brexit strains, which pushed Cable back towards session lows in the Ny session. The commodity bloc were also firmer on the day. Stocks and the metals did not do much, but WTI is trading heavily towards the end of the US session and looks as though further downside may be in store.
In terms of data, the U.S. trade deficit fell to a seven-month low in April as exports rose to a record high, lifted by an increase in shipments of industrial materials and soybeans. The trade gap narrowed 2.1% to $46.2 billion, the smallest since September. Data for March was revised to show the trade deficit falling to $47.2 billion, instead of the previously reported $49.0 billion.
Thursday will be another thin one n terms of economic data and it will be political headlines that cause any potential volatility. The Aud, having had a decent run higher after yesterday’s GDP, will have another chance to shine, with today’s focus being on the AIG Performance of Construction Index, New Home Sales and Trade Balance, all for May (TB; exp +$1,000 mio). The China Foreign Exchange Reserves are also due and may create some waves for the Aud$, while the Yen will look to the Japan Coincident Index and Leading Economic Index for guidance. Europe’s focus will be on the Q1 GDP (exp 0.4%qq, 2.5%yy) and the German Factory Orders, while the US will be thin, with just the weekly Jobless Claims and the April Consumer Credit Change to go on. There will be assorted CB speakers too, including Ramsden (BOE) and Poloz (BOC). Have a good day.
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