Summary:
Wall Street stocks soared as risk sentiment
improved on improved earnings reports. The DOW gained 1.4% while the S&P
500 surged 1.8%. US Treasury Bond yields rose.
The benchmark 10-year US bond rate climbed
8 basis points to 3.52%. Other global yields rose. The Dollar finished mixed.
The Euro (EUR/USD) dipped to 1.1027 from 1.1043 yesterday.
Sterling (GBP/USD) though, edged higher to
1.2497 (1.2470). Risk leader, the Australian Dollar rallied to 0.6627 (0.6605).
New Zealand’s Kiwi (NZD/USD) was up 0.4% to 0.6145 (0.6117).
Ahead of today’s Bank of Japan meeting, the
first for incoming Governor Ueda, the USD/JPY pair rose to 133.92 from 133.50
yesterday. Rising US bond yields boosted the Greenback against the Yen.
The Dollar Index (USD/DXY), a popular
measure of the Greenback’s value against a basket of 6 major currencies
finished little changed, at 101.05 (101.03 yesterday).
Against the Asian and Emerging Market
currencies, the US Dollar was mixed. USD/CNH (Dollar-Offshore Chinese Yuan)
dipped to 6.93 from 6.94 yesterday. The USD/THB pair was flat at 34.10.
Economic data released yesterday saw
Australia’s Import Prices slide -4.2% q/q against expectations of +0.4%. In
Europe, Spain’s Unemployment Rate rose to 13.3%, up from a previous 12.9%.
The Advance Estimate of US GDP (q/q) fell
to 1.1%, lower than expectations at 2%. The previous quarter’s GDP was adjusted
down to 2.6% from 2.9%. The US Advance GDP Price Index though rose to 4% from a
previous upward adjusted 3.9%, and higher than estimates of 3.7%.
Claims for Unemployment benefits from US
workers fell to 230,000 from 246,000 previously. US Pending Home Sales slumped
5.2% in March, against expectations of a 0.6% gain.
·
USD/JPY – The Dollar rallied against the Japanese Yen to 133.92 following
two days of losses. The USD/JPY pair soared to an overnight high at 134.20. In
choppy trade, the overnight low recorded was 133.09. The Bank of Japan meets on
policy today, the first for incoming Governor Ueda.
·
EUR/USD – The shared currency eased modestly against the Greenback to 1.1027
from yesterday’s open at 1.1043. Overnight, the Euro slumped to a low at 1.0992
before rallying at the close. In choppy trade, the high recorded overnight was
1.1064.
·
AUD/USD – Risk-on lifted the Aussie Battler 0.3% against the Greenback to
0.6627 from yesterday’s 0.6605. The overnight high recorded was at 0.6635 as
risk appetite improved. The overnight low traded was at 0.6595.
·
GBP/USD – Sterling grinded higher to 1.2497 from 1.2470 yesterday. The
British Pound traded to an overnight high at 1.2499, just under the 1.2500
resistance level. In choppy trades of its own, the overnight low recorded was
at 1.2436.
On the Lookout:
Economic data picks up today as we close
the work week. Japan kicks off today’s reports with its April Tokyo Headline
and Core CPI (headline f/c 3.1% from 3.3%; core f/c 3.2% from 3.2% – ACY
Finlogix), Japanese March Unemployment Rate follows (f/c 2.5% from 2.6% – ACY
Finlogix), Japanese March Industrial Production (m/m f/c 0.5% from 4.5% – ACY
Finlogix); Japanese Retail Sales (y/y f/c 5.8% from 6.6% – ACY Finlogix.
Australia follows with its PPI (q/q f/c 0.8%
from 0.7%) and Private Sector Credit (m/m f/c 0.3% from 0.3%).
The Bank of Japan is expected to keep its
Policy Rate unchanged at -0.1% at the conclusion of it meeting today. Traders
will focus on the remarks of new Governor Ueda.
France starts off European data with its
Flash GDP (q/q f/c 0.2% from 0.1%; y/y f/c 0.3% from 0.5% – ACY Finlogix).
The UK follows with its April Nationwide
Housing Prices (m/m f/c 0.4% from -0.8%; y/y f/c -3.5% from -3.1% – ACY
Finlogix).
Switzerland releases its March Retail Sales
(y/y f/c 0.7% from 0.3%). France releases its April Inflation Rate (y/y f/c
5.7% from 5.7% – ACY Finlogix).
Germany follows with its April Unemployment
Rate (f/c 5.6% from 5.6% – ACY Finlogix), German Flash GDP (q/q f/c 0.2% from
-0.4%; y/y f/c 0.3% from 0.9% – ACY Finlogix).
The Eurozone releases its Flash GDP
Estimate (q/q f/c 0.2% from 0%; y/y f/c 1.4% from 1.8%), German April Inflation
Rate (m/m f/c 0.6% from 0.8%; y/y f/c 7.3% from 7.4% – ACY Finlogix).
Canada kicks off North America with its March
GDP estimate (m/m no f/c, previous was -0.2%).
Finally, the US releases its March Core PCE
Price Index (m/m f/c 0.3% from 0.3% – ACY Finlogix), March Personal Income (m/m
f/c 0.2% from 0.3% – ACY Finlogix) and March Personal Spending (m/m f/c -0.1%
from 0.2% – ACY Finlogix) and Chicago April PMI (f/c 43.5 from 43.8 – ACY
Finlogix).
Trading Perspective:
A huge day in terms of economic data releases
will keep markets choppy.
The US Dollar closed mixed against its
Rivals with the DXY (Dollar Index) sidelined.
All eyes will be focused today on the Bank
of Japan’s meeting with the debut of Governor Ueda.
The BOJ press conference following the
meeting will be closely scrutinized.
The volatility in the USD/JPY pair will
impact the other FX pairs.
Coming on a Friday, we can expect the
traditional end of week fireworks in FX land. Happy days!.
·
EUR/USD– The shared
currency eased against the US Dollar to 1.1027 following its close at 1.1045.
Traders lifted the shared currency to an overnight high at 1.1064. Look for
immediate resistance today at 1.1045 followed by 1.1065 and 1.1095. Immediate
support can be found at 1.0990 (overnight low traded was 1.0992). The next
support level is found at 1.0960. Likely range today 1.0980-1.1050. Topside
looks limited with further downside tests possible.
·
AUD/USD – Risk-on
lifted the Aussie Dollar to a 0.6627 finish, up from 0.6605 yesterday. The
Aussie Battler climbed to an overnight high at 0.6635 which is today’s
immediate resistance. The next resistance level can be found at 0.6665 and
0.6695. On the downside, look for immediate support at 0.6600 (overnight low
was 0.6595). The next support level lies at 0.6570. Look for further choppy
trade in a likely range today of 0.6575-0.6635. Sell rallies.
·
USD/JPY – We could
be in for a volatile session today. The BOJ is not expected to change its
discount rate at the conclusion of its monetary policy meeting. However,
markets will be looking for comments from new Governor Ueda as well as the
updated BOJ economic projections. The Dollar settled at 133.92 at the close of
trade. Immediate resistance lies at 134.20 (overnight high). The next
resistance level is found at 134.50. Immediate support can be found at 133.60,
133.30 and 133.00. Likely range 133.00-134.30. Trade the range.
(Source: Finlogix.com)
·
GBP/USD – The
British Pound edged 0.22% higher against the Greenback to 1.2497 against 1.2470
yesterday. Look for immediate resistance for Sterling at 1.2500 followed by
1.2540. On the downside, immediate support can be found at 1.2465 and 1.2435.
Sterling’s topside should be limited today unless the US Dollar weakens anew.
Expect another volatile session in the British currency with a likely range of
1.2420-1.2520. Look to sell rallies, tin helmets on.
Happy Friday and trading all. A top
weekend ahead.
This content may have been written by a
third party. ACY makes no representation or warranty and assumes no liability
as to the accuracy or completeness of the information provided, nor any loss
arising from any investment based on a recommendation, forecast or other
information supplied by any third-party. This content is information only, and
does not constitute financial, investment or other advice on which you can
rely.
This article was written by Michael Moran.