Tag: XAU

  • Markets Calm, Geopolitics Linger as Fed, BoJ, BoE, and SNB Loom

    Markets Calm, Geopolitics Linger as Fed, BoJ, BoE, and SNB Loom



    Global markets were broadly steady on Monday, despite ongoing conflicts in the Middle East. The Nikkei led Asian bourses with a 1.26% while European indexes also opened higher. Even with Israel and Iran continuing to exchange military strikes, investor sentiment remained resilient. US equity futures are also treading water, suggesting cautiousness rather than panic ahead of a high-stakes week for global monetary policy.

    Oil prices ticked higher on geopolitical concerns but quickly settled back into Friday’s range, indicating that markets are becoming more conditioned to the risk headlines unless there is a major disruption to oil flows. Meanwhile, Gold gave back early gains after briefly spiking near a two-month high. The pullback reflects a modest unwinding of haven flows as traders turn their focus to upcoming central bank decisions and data rather than reacting solely to geopolitical developments.

    This week will be busy, with four major central banks—Fed, BoJ, BoE, and SNB—set to announce policy decisions. The backdrop is particularly complex: markets are navigating geopolitical flare-ups, looming tariff deadlines, and a busy calendar of economic data including retail sales, inflation, and employment reports. Investors will be looking for clues not only on rate direction but also on how policymakers assess the broader risk outlook.

    Technically, further rise is expected in Gold as long as 3376.70 minor support holds, for retesting 3499.79 high. Decisive break there will resume larger up trend. Nevertheless, break of 3376.70 will turn focus back to 3293.35 support. Firm break there will argue that corrective pattern from 3499.79 is extending with another falling leg.

    In Asia, Nikkei rose 1.26%. Hong Kong HSI is up 0.84%. China Shanghai SSE is up 0.35%. Singapore Strait Times is up 0.02%. Japan 10-year JGB yield rose 0.06 to 1.462.

    ECB’s Nagel warns against premature policy commitment

    German ECB Governing Council member Joachim Nagel struck a cautious tone at a conference today, warning against locking in any specific policy path amid persistent global uncertainty.

    Markets currently price in only one more rate cut by year-end. But Nagel resisted endorsing that outlook, stressing that rapidly evolving conditions make it unwise to pre-commit.

    “We must keep our eyes and ears open for the risks to price stability,” he said, pointing specifically to current developments in the Middle East as a source of heightened uncertainty.

    Nagel also offered a downbeat assessment of Germany’s near-term prospects, forecasting stagnation in Q2 and flagging the global trade war as a significant drag. He estimated that escalating trade tensions could shave as much as 0.75 percentage points off German growth over the medium term.

    ECB’s de Guindos sees inflation risks balanced, Euro strength not a concern

    In a Reuters interview, ECB Vice President Luis de Guindos downplayed concerns over a return to the ultra-low inflation era of the 2010s, despite the recent strengthening of Euro. De Guindos acknowledged that these developments could weigh on headline inflation but emphasized that “the risk of undershooting is very limited.” He maintained that inflation risks are now “balanced”. Euro’s recent appreciation was neither rapid nor volatile, and therefore “not going to be a big obstacle” at 1.15 level.

    De Guindos expressed confidence that inflation will rebound after dipping to 1.4% in Q1 2026, citing a still-tight labor market and sustained wage pressures. Compensation growth, supported by union demands, is expected to remain near 3%. This aligns with ECB’s medium-term outlook of returning inflation to its 2% target.

    While stopping short of explicitly endorsing a pause, de Guindos indicated that market pricing for just one more rate cut, potentially later this year, was consistent with ECB President Christine Lagarde’s latest messaging.

    “Markets have understood perfectly well what the President said about being in a good position,” he noted, adding that investors now correctly anticipate that the ECB is nearing the end of its easing cycle.

    NZ BNZ services slumps to 44.0, economy returning to recession

    New Zealand’s services sector took a steep turn downward in May, with the BusinessNZ Performance of Services Index plunging from 48.1 to 44.0, the lowest reading since June 2024. Activity and new orders led the decline, falling from 46.7 and 50.2 to 40.1 and 43.2 respectively, as businesses reported broad-based weakness in demand. Employment also edged down from 47.9 to 47.2.

    Sentiment on the ground paints an equally grim picture. Negative commentary from survey respondents rose to 65.6%, up from 61.8% in April. Businesses cited reduced consumer spending, revenue declines, and heightened uncertainty over inflation, interest rates, and the economic outlook. Many reported that customers are delaying decisions and becoming more cautious in their spending—mirroring trends typically seen during periods of economic stress.

    BNZ Senior Economist Doug Steel noted that the PSI collapse closely follows the earlier fall in the Performance of Manufacturing Index, reinforcing signs of widespread economic fragility. With both key sectors now contracting, concerns are rising that New Zealand may be “returning to recession”.

    China’s retail sales shine with 6.4% yoy growth, but production and investment drag continues

    China’s latest economic data for May paints a mixed picture. Industrial production rose 5.8% yoy, falling short of the expected 6.0% and reflecting lingering weakness in external demand. This comes on the heels of a sharp -34.5% yoy drop in exports to the US, despite the mid-May rollback of some tariffs. The full impact of reduced tariffs is expected to emerge more clearly in June though.

    In contrast, retail sales provided a bright spot, jumping 6.4% yoy and beating forecasts of 5.0% yoy. The rebound was supported by the government’s aggressive push to boost consumer spending through its appliance and vehicle trade-in program. The Ministry of Commerce reported that the campaign has already generated over CNY 1.1m in sales this year.

    However, fixed asset investment remains a drag, growing only 3.7% ytd yoy versus expectations of 3.9%. The persistent weakness in property investment, down 10.7% in the first five months of the year, highlights ongoing strain in the real estate sector.

    Four central banks, one volatile week

    Markets are heading into a packed week, with four major central banks—Fed, BoJ, BoE, and SNB—set to announce policy decisions, all against the backdrop of heightened geopolitical risk, trade policy uncertainty, and a flurry of critical economic data. Alongside the rate decisions, key data including retail sales, inflation, and job report will further shape expectations.

    Fed is widely expected to hold rates steady at 4.25–4.50%, with near-universal pricing in the futures market reflecting that consensus. There is little urgency for Fed to act, given the still-resilient labor market and the fiscal support flowing from new tax and spending legislation. However, the path ahead is anything but straightforward. While recent CPI and PPI data showed no clear sign of tariffs filtering through, the risk of a renewed trade war is growing. Whether tariffs are rolled back or re-escalated after the 90-day truce expires will heavily influence Fed’s next move. A Reuters poll shows economists split—55% expect rate cuts to resume in Q3, while 42% forecast cuts only in Q4 or later.

    Meanwhile, oil prices are emerging as a new threat to the disinflation trend. If the Middle East conflict worsens, a sustained energy rally could delay the Fed’s easing cycle further. That’s a major variable markets will be watching, especially if headline inflation picks up again. Fed Chair Powell will likely emphasize data dependency while avoiding strong forward guidance, leaving markets to interpret incoming economic and geopolitical developments on their own.

    BoJ is also expected to keep its policy rate unchanged at 0.50%. With trade tensions high, the odds of another hike this year have dropped sharply. A Reuters poll found 52% of economists now expect no further move in 2025, while over three-quarters foresee one 25bps hike by March 2026. If trade talks stabilize and global demand revives, the BoJ could reconsider tightening, but for now, the path of least resistance is to wait and observe.

    BoE meets amid growing evidence of domestic weakness, including softer-than-expected GDP and labor market data. Still, policymakers are expected to hold the Bank Rate at 4.25% this week. The BoE has been moving cautiously and gradually, citing lingering inflation and wage pressures. The Monetary Policy Committee remains divided: two members pushed for a 50bps cut at the last meeting, while others voted to hold. A Reuters poll shows most economists expect 25bps cuts in both Q3 and Q4, bringing the rate down to 3.75% by year-end. However, that easing path will also hinge on upcoming inflation data, due this week.

    Among the four, SNB stands out as the only one likely to ease. A 25bps cut to 0.00% is widely anticipated as SNB confronts rising deflationary pressure. May’s consumer price index fell -0.1% yoy, the first negative print in over four years. Coupled with the strong Swiss Franc, which has appreciated significantly amid geopolitical risk flows, deflation risks are intensifying. Markets are even speculating that the SNB could pre-emptively cut by 50bps or signal readiness to re-enter negative territory if warranted.

    Beyond the rate decisions, other important central bank communications are scheduled too. BoC will release its summary of deliberations, and the BoJ will publish minutes of its recent meeting—both likely to offer insight into policy calibration ahead. Meanwhile, key economic data including retail sales from the US, UK, and Canada, UK CPI, and Australian employment figures.

    USD/CAD Daily Outlook

    Daily Pivots: (S1) 1.3550; (P) 1.3601; (R1) 1.3635; More…

    USD/CAD’s decline continues today and intraday bias stays on the downside. Current fall from 1.4791 should target 100% projection of 1.4414 to 1.3749 from 1.4014 at 1.3349. On the upside, through, break of 1.3650 minor resistance will turn intraday bias neutral first.

    In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 resistance holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:30 NZD Business NZ PSI May 48.5
    23:01 GBP Rightmove House Price Index M/M Jun 0.60%
    02:00 CNY Industrial Production Y/Y May 6.00% 6.10%
    02:00 CNY Retail Sales Y/Y May 5.00% 5.10%
    02:00 CNY Fixed Asset Investment YTD Y/Y May 3.90% 4.00%
    06:30 CHF PPI M/M May 0.10% 0.10%
    06:30 CHF PPI Y/Y May -0.50%
    07:00 CHF SECO Economic Forecasts
    12:30 USD Empire State Manufacturing Jun -6.7 -9.2

     



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  • Dollar Crushed as Dovish Inflation Data and Trade Tensions Weigh; Euro Surges to Multi-Year High

    Dollar Crushed as Dovish Inflation Data and Trade Tensions Weigh; Euro Surges to Multi-Year High


    Dollar accelerated its broad-based selloff in early US trading, plunging to its lowest level against Euro since 2021. The latest catalyst came from softer-than-expected May PPI data, which followed Wednesday’s downside surprise in CPI. The tandem inflation prints have further calmed fears of immediate tariff-driven price pass-through, at least for now, and are reinforcing expectations that Fed is moving closer to resume policy easing.

    As a result, market expectations for Fed easing have firmed up. Fed funds futures are now pricing in an 80% chance of a rate cut in September, up from around 75% just a week ago before the two inflation releases. The tone of both upstream and downstream price measures—despite the tariff backdrop—has strengthened the market’s conviction that Fed will deliver a cut before the fourth quarter, particularly as labor market data has also started to show signs of softening.

    Adding to Dollar’s woes is renewed uncertainty over US trade policy. While Treasury Secretary Scott Bessent floated the possibility of extending the current 90-day tariff truce with “good faith” trading partners, President Donald Trump struck a starkly different tone. Trump dismissed the need for any extension and hinted that countries would be unilaterally informed of their new tariff terms in the coming weeks. This reinforces fears that the US may revert to aggressive, one-sided trade actions just as the 90-day tariff truce nears expiration.

    In the currency markets, Dollar is clearly the weakest performer of the day, followed by Loonie and Aussie. In contrast, safe-haven demand has lifted Swiss Franc to the top of the board, with Euro and Yen close behind. Euro in particular continues to draw support from a series of ECB officials signaling that the rate-cut cycle is nearing completion. That divergence—between a Fed leaning dovish and an ECB shifting toward a pause—is now starkly reflected in EUR/USD price action.

    Sterling and Kiwi are trading in the middle of the pack, with the Pound underperforming its European peers. UK GDP contracted more than expected in April, reinforcing expectations for a BoE rate cut in August. Despite some signs of resilience in the broader three-month growth trend, momentum has clearly slowed, leaving BoE less justification to hold rates elevated for much longer.

    Technically, Gold is also bouncing on Dollar weakness, and focus is back on 3403.49 resistance. Firm break there will resume the rally from 3120.34, and revive the case that correction from 3499.79 high has completed. Further rally should then be seen to retest 3499.79.

    In Europe, at the time of writing, FTSE is up 0.18%. DAX is down -0.87%. CAC is down -0.43%. UK 10-year yield is down -0.063 at 4.488. Germany 10-year yield is down -0.059 at 2.478. Earlier in Asia, Nikkei fell -0.65%. Hong Kong HSI fell -1.36%. China Shanghai SSE rose 0.01%. Singapore Strait Times rose 0.08%. Japan 10-year JGB yield fell -0.001 to 1.460.

    US initial jobless claims unchanged at 248k, match expectations

    US initial jobless claims were unchanged at 248k in the week ended June 7, slightly below expectation of 251k. Four-week moving average of initial claims rose 5k to 240k, highest since August 26, 2023.

    Continuing claims rose 54k to 1956k in the week ending May 31, highest sine November 13, 2021. Four-week moving average of continuing claims rose 20k to 1915k, highest since November 27, 2021.

    US PPI up 0.1% mom, 2.6% yoy in May

    US PPI rose 0.1% mom in May, below expectation of 0.2% mom. PPI services rose 0.1% mom, while PPI goods rose 0.2% mom. PPI less food, energy and trade services rose 0.1% mom.

    For the 12 months period, PPI rose from 2.5% yoy to 2.6% yoy, matched expectations. PPI less food, energy and trade services rose 2.7% yoy.

    ECB Schnabel: Monetary easing nears end as Europe embraces stronger Euro and fiscal support

    ECB Executive Board Member Isabel Schnabel signaled today that the central bank’s monetary easing cycle is “coming to an end,” citing stable medium-term inflation forecasts and improving macroeconomic conditions.

    Speaking with notable confidence, Schnabel downplayed the expected dip in inflation—projected at just 1.6% in 2026—as a “temporary deviation” caused by energy base effects and a stronger euro.

    Schnabel painted a relatively constructive picture of the Eurozone economy, stating that growth remains “broadly stable” even as global trade tensions intensify. Private consumption continues to provide a key pillar of support, while both manufacturing and construction sectors are showing signs of recovery. She also highlighted that “Additional defense and infrastructure spending counteract tariff shock on growth”.

    In her view, these structural shifts, combined with a resilient Euro and outperforming equity markets, reflect a “new European growth narrative” that could elevate the region’s economic standing.

    Still, Schnabel acknowledged the risks posed by escalating trade tensions, particularly in the form of inflation volatility and financial market uncertainty. She warned that tariffs can be amplified through global value chains, posing upside risks to inflation. At the same time weaponisation of raw materials threatens to further strain supply chains.

    ECB Villeroy and Šimkus emphasize flexibility as policy hits neutral zone

    Comments from two ECB Governing Council members today reinforced a cautious stance as the easing cycle appears to have reached a natural pause, following eight consecutive rate cuts.

    French member Francois Villeroy de Galhau emphasized flexibility, telling Franceinfo radio that future policy will depend on how inflation evolves, stressing a preference for “pragmatism and agility.”

    Lithuanian member Gediminas Šimkus echoed a similar tone, stating that policy has now reached a “neutral level”. It is critical for ECB to maintain the freedom, “not to commit to one direction or another”. He warned of growing uncertainty, particularly around upcoming US trade decisions as the 90-day tariff truce nears expiry on July 9.

    UK GDP contracts -0.3% mom in April, as services drag

    The UK economy contracted -0.3% mom in April, a sharper decline than the expected -0.1%. The main drag came from the services sector, which fell -0.4% mom and contributed most to the monthly GDP drop. Production also shrank -0.6% mom. In contrast, construction provided a rare bright spot, rising 0.9% mom, though not enough to offset broader weakness.

    Despite the poor April print, the broader picture remains more constructive. GDP expanded 0.7% in the three months to April compared to the prior three-month period, with services up 0.6%, production up 1.1%, and construction up 0.5%.

    Japanese business confidence sours amid tariff fears and profit warnings

    Business sentiment in Japan deteriorated sharply in Q2, with the Ministry of Finance’s survey revealing a broad-based loss of confidence across industries.

    The overall index for large firms slipped into negative territory at -1.09, down from Q1’s modest 2.0. Large manufacturers saw sentiment weaken further from -2.4 to -4.8, while large non-manufacturers experienced a steep drop from 5.2 to -5.7, suggesting that economic uncertainty is spreading beyond export-heavy sectors.

    The survey also highlighted a growing sense of earnings pessimism. Large manufacturers now expect recurring profits to decline -1.2% in the fiscal year ending March 2026, a downgrade from the -0.6% fall seen in the previous survey. Particularly alarming is the auto sector’s outlook, with automakers and parts suppliers projecting a severe -19.8% drop in profits.

    This highlights the mounting concern over the impact of steep US tariffs, which threaten to hit Japan’s flagship export industry hard and weigh on broader economic momentum.

    EUR/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.1429; (P) 1.1465; (R1) 1.1524; More…

    EUR/USD’s rally from 1.0176 resumed by accelerating through 1.1572 resistance. Intraday bias stays on the upside at this point. Next target is 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927. On the downside, below 1.1504 minor support will turn intraday bias neutral and bring consolidations first, before staging another rise.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 1.1604 support holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:01 GBP RICS Housing Price Balance May -8% -3% -3%
    23:50 JPY BSI Large Manufacturing Index Q2 -4.8 0.8 -2.4
    01:00 AUD Consumer Inflation Expectations Jun 5.00% 4.10%
    06:00 GBP GDP M/M Apr -0.30% -0.10% 0.20%
    06:00 GBP Industrial Production M/M Apr -0.60% -0.40% -0.70%
    06:00 GBP Industrial Production Y/Y Apr -0.30% -0.20% -0.70%
    06:00 GBP Manufacturing Production M/M Apr -0.90% -0.80% -0.80%
    06:00 GBP Manufacturing Production Y/Y Apr 0.40% 0.40% -0.80%
    06:00 GBP Goods Trade Balance (GBP) Apr -23.2B -20.8B -19.9B
    12:30 USD PPI M/M May 0.10% 0.20% -0.50% -0.20%
    12:30 USD PPI Y/Y May 2.60% 2.60% 2.40% 2.50%
    12:30 USD PPI Core M/M May 0.10% 0.30% -0.40% -0.20%
    12:30 USD PPI Core Y/Y May 3.00% 3.00% 3.10% 3.20%
    12:30 USD Initial Jobless Claims (Jun 6) 248K 251K 247K 248K
    14:30 USD Natural Gas Storage 108B 122B

     



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  • Markets Eye US-China Trade Talks for Fresh Catalyst

    Markets Eye US-China Trade Talks for Fresh Catalyst


    Asian equity markets opened the week on a positive note, supported by cautious optimism surrounding the high-stakes US-China trade negotiations in London. US Treasury Secretary Scott Bessent, along with Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer, are meeting Chinese counterparts as efforts to revive dialogue intensify. The outcome of these talks could set the tone for broader risk sentiment in the coming sessions.

    Despite the upbeat market tone, traders appear restrained in their positioning. While recent developments — such as China’s approval of rare earth export licenses — hint at a willingness to de-escalate, there’s little in the way of concrete breakthrough yet. White House economic adviser Kevin Hassett tempered enthusiasm by pointing out that China’s release of critical minerals remains below what the US believes was agreed to previously in Geneva. As such, expectations for a definitive deal remain muted, limiting any aggressive risk-on trades for now.

    Currency markets reflect this tempered tone. Aussie and Kiwi are modestly firmer, benefiting from the underlying improvement in sentiment, Dollar and Loonie are trading on the softer side. European majors and Yen are relatively steady in the middle. With most major pairs holding inside Friday’s ranges, the currency space is clearly in wait-and-see mode.

    Beyond trade, inflation will be the other key macro theme this week. The US will release its May CPI and PPI data, alongside the University of Michigan’s consumer sentiment and inflation expectations. Markets are keen to assess whether signs of tariff-driven are beginning to firm. A surprise to the upside could challenge the current market view that the Fed’s next move will be no earlier than Q4, particularly if inflation expectations also pick up.

    Technically, Gold’s extended decline argues that rebound from 3120.34 might have completed at 3403.39 already, with break of near term channel support and bearish divergence condition in 4H MACD. Further fall is now in favor to 3245.23 support first. Firm break there will the solidify the case that corrective pattern from 3499.79 is already in its third leg, and target 3120.34 support and possibly below.

    In Asia, at the time of writing, Nikkei is up 0.89%. Hong Kong HSI is up 0.88%. China Shanghai SSE is up 0.26%. Singapore Strait Times is up 0.15%. Japan 10-year JGB yield is up 0.011 at 1.470.

    China’s CPI falls -0.1% yoy in May, negative for fourth month

    China’s headline CPI stayed in negative territory for the fourth consecutive month in May, coming in at -0.1% yoy, slightly better than the expected -0.2% yoy.

    The persistent softness in overall inflation was largely driven by a sharp -6.1% yoy decline in energy prices, which alone shaved off nearly half a percentage point from the annual CPI reading.

    On a monthly basis, CPI fell -0.2% mom, with energy again dragging down the figure through a -1.7% mom decline.

    In contrast, core inflation, which strips out food and energy prices, rose to 0.6% yoy, the highest level since January.

    Producer price pressures continue to weaken further, with PPI dropping to -3.3% yoy from -2.7% yoy previously, marking the deepest contraction in nearly two years. Wholesale prices have now been stuck in deflation since October 2022.

    China’s trade surplus widens to USD 103.2B in May, US exports slump -34.5% yoy

    China’s trade surplus widened to USD 103.2B in May, exceeding expectations of USD 101.3, even as headline export and import figures undershot forecasts. Exports rose 4.8% yoy, just shy of the 5.0% yoy consensus. Imports fell -3.4% yoy, a sharper drop than the anticipated -0.9% yoy.

    Exports to the US plunged -34.5% yoy, highlighting the entrenched trade tensions despite Washington’s partial tariff rollback in April. However, the impact was cushioned by robust growth in exports to ASEAN (15% yoy), the European Union (12% yoy), and Africa (33% yoy).

    ECB’s Nagel signals Pause, cites maximum flexibility at current rates

    German ECB Governing Council member Joachim Nagel indicated over the weekend that the central bank is likely entering a pause phase after last week’s eighth rate cut in the current easing cycle, which brought the deposit rate to 2.00%.

    Speaking on Deutschlandfunk radio, Nagel also noted that the current level of interest rates offers “maximum flexibility.” And, “We can now take the time to look at the situation first.”

    BoE’s Greene warns on inflation sensitivity, risk of wage-price spiral

    BoE Monetary Policy Committee member Megan Greene acknowledged at a Saturday conference that while UK inflation is moving “in the right direction,” the pace of decline is slower than she would prefer.

    Speaking candidly about April’s upside inflation surprise, Greene stated that while the MPC believes it can “look through” the jump, there remains a “pretty big risk” that price pressures could become more entrenched, especially if second-round effects materialize.

    Greene also highlighted the behavioral shift triggered by the recent cost-of-living crisis, warning that past inflation shocks may have left households and businesses more reactive to even small price increases. That, in turn, could “feed through the wage-price behavior.” S

    He noted that private-sector wage growth remains “way above” the level consistent with the BoE’s 2% inflation target.

    Tariff effects under scrutiny as US CPI, PPI and inflation expectations take center stage

    A relatively quiet week for global economic releases will nevertheless carry key signals for monetary policy in both the US and UK.

    US May CPI report will be front and center, offering insight into whether there is an emerging inflation pickup from tariffs. Headline CPI is expected to accelerate from 2.3% yoy to 2.5% yoy. Core CPI is seen rising to 2.9% after troughing at 2.8% for two months. A rise in both measures would raise concerns that 2025’s slow disinflation trend is reversing just as tariffs begin to seep into consumer prices.

    Additional confirmation may come from upstream price pressures in PPI data, alongside consumer inflation expectations in the University of Michigan’s sentiment survey. If all three elements—CPI, PPI, and expectations—firm, the Fed’s cautious stance would harden further. While markets currently lean toward a September cut, such an inflation environment could shift expectations toward Q4.

    In the UK, attention will turn to April GDP and labor market data. GDP is expected to show a mild contraction of -0.1% mom. But that may be less concerning given signs that post-trade deal clarity with the US could support stronger growth later in Q2. The more pivotal element will be wage growth, which has remained stubbornly high and continues to feed into sticky services inflation—a key concern for BoE.

    Diverging views within the Monetary Policy Committee remain apparent. While some members are inclined to ease, Chief Economist Huw Pill has warned last month that the UK’s weak productivity growth and embedded wage pressures could mirror past inflationary episodes. His remarks highlight that underlying structural risks—especially in the labor market—may prevent BoE from loosening policy too quickly, even if growth remains uneven.

    Here are some highlights of the week:

    • Monday: New Zealand manufacturing sales; Japan GDP final; China CPI, PPI, trade balance.
    • Tuesday: Australia Westpac consumer sentiment, NAB business confidence; UK employment; Swiss SECO consumer climate; Eurozone Sentix investor confidence.
    • Wednesday: Japan PPI; Canada building permit; US CPI.
    • Thursday: Japan BSI manufacturing; UK GDP, industrial and manufacturing production, goods trade balance; US PPI, jobless claims.
    • Friday: New Zealand BNZ manufacturing; Japan tertiary industry index; Germany CPI final; Eurozone industrial production, trade balance; Canada wholesale sales, manufacturing sales; US U of Michigan consumer sentiment.

    AUD/USD Daily Report

    Daily Pivots: (S1) 0.6476; (P) 0.6497; (R1) 0.6513; More…

    AUD/USD recovers mildly today but stays below 0.6536 resistance. Intraday bias remains neutral for the moment. Further rise is in favor as long as 0.6406 support holds. On the upside, decisive break of 0.6536 will resume the rally from 0.5913 to 61.8% retracement of 0.6941 to 0.5913 at 0.6548. However, firm break of 0.6406 will turn bias to the downside for 38.2% retracement of 0.5913 to 0.6536 at 0.6298.

    In the bigger picture, AUD/USD is still struggling to sustain above 55 W EMA (now at 0.6443) cleanly, and outlook is mixed. Sustained trading above 55 W EMA will indicate that rise from 0.5913 is at least correcting the down trend from 0.8006 (2021 high), with risk of trend reversal. Further rise should be seen to 38.2% retracement of 0.8006 to 0.5913 at 0.6713. However, rejection by 55 W EMA will revive medium term bearishness for another fall through 0.5913 at a later stage.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Manufacturing Sales Q1 5.10% 1.10% 3.00%
    23:50 JPY Bank Lending Y/Y May 2.40% 2.40% 2.40% 2.30%
    23:50 JPY Current Account (JPY) Apr 2.31T 2.59T 2.72T
    23:50 JPY GDP Q/Q Q1 F 0.00% -0.20% -0.20%
    23:50 JPY GDP Deflator Y/Y Q1 F 3.30% 3.30% 3.30%
    01:30 CNY CPI Y/Y May -0.10% -0.20% -0.10%
    01:30 CNY PPI Y/Y May -3.30% -3.00% -2.70%
    03:00 CNY Trade Balance (USD) May 103.2B 101.1B 96.2B
    05:00 JPY Eco Watchers Survey: Current May 44.4 43.9 42.6
    14:00 USD Wholesale Inventories M/M Apr F 0% 0%

     



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  • Dollar Struggles, Gold Rally Stalls, Trade Uncertainty Caps Conviction

    Dollar Struggles, Gold Rally Stalls, Trade Uncertainty Caps Conviction


    Global markets remain mixed, reflecting a cautious investor mood amid heightened trade uncertainty and a lack of clear directional drivers. US stocks closed modestly higher overnight, reversing losses from earlier in the session. Asian equities broadly followed the rebound, seemingly brushing off disappointing Chinese manufacturing data. The overall tone, however, remains indecisive, with no strong commitment to risk assets or safe havens.

    In the currency markets, Dollar is recovering slightly after a brief selloff, but still stands as the week’s worst performer. Loonie and Aussie follow behind. Yen continues to lead on safe-haven demand. Kiwi and Euro are also holding firmer, with Sterling and Swiss Franc sitting mid-pack. The lack of clear directional bias reflects the broader market indecision, as traders await clarity on the outcome of key trade negotiations.

    Underlying this market hesitation is persistent uncertainty surrounding global trade. According to a Reuters report, the Trump administration is pressing trading partners to submit their “best offers” by Wednesday, as it pushes to fast-track negotiations ahead of the July 9 expiry of the current 90-day reciprocal tariff truce. The US is requesting commitments on tariff and quota concessions, along with action plans on non-tariff barriers.

    The draft communication from the US Trade Representative warns countries not to assume tariffs will be halted, even if court rulings go against the administration. The letter asserts that the White House intends to continue the tariff program under “other robust legal authorities” if necessary, signaling that tariffs remain a core policy tool in negotiations.

    With legal and diplomatic fronts both in flux, traders are taking a wait-and-see approach. Until there is clarity on the direction of US trade policy—particularly with key partners like China and the EU—market participants are likely to stay sidelined. For now, short-term positioning continues to be dictated more by event risk management than conviction.

    Technically, Gold’s rise from 3120.34 resumed by breaking through 3365.92 resistance. Further rally should be seen to retest 3499.79 high. but strong resistance could be seen there to limit upside on first attempt, to bring more sideway trading in the near term. Nevertheless, decisive break of 3499.79 will confirm larger up trend resumption.

    In Asia, at the time of writing, Nikkei is up 0.07%. Hong Kong HSI is up 1.10%. China Shanghai SSE is up 0.36%. Singapore Strait Times is down -0.26%. Japan 10-year JGB yield is down -0.025 at 1.484. Overnight, DOW rose 0.08%. S&P 500 rose 0.41%. NASDAQ rose 0.67%. 10-year yield rose 0.046 to 4.462.

    Looking ahead, Swiss CPI and Eurozone CPI flash are the main focuses in European session. US will release factory orders later in the day.

    BoJ’s Ueda: Ready to hike if wage growth recovers from tariff drag

    BoJ Governor Kazuo Ueda told parliament today that recently imposed U.S. tariffs could weigh on Japanese corporate sentiment, potentially impacting winter bonus payments and next year’s wage negotiations.

    He acknowledged that wage growth may “slow somewhat” in the near term due to these external pressures. However, Ueda expressed confidence that wage momentum would eventually “re-accelerate”, helping to sustain a moderate growth in household consumption.

    Looking ahead, Ueda reiterated the BoJ’s readiness to adjust its ultra-loose policy if the economy evolves in line with its projections. “If we’re convinced our forecast will materialize, we will adjust the degree of monetary support by raising interest rates,” he said.

    However, he cautioned that uncertainty surrounding the economic outlook remains “extremely high.”

    RBA’s Hunter: AUD’s recent resilience linked to global shift away from USD exposure

    RBA Chief Economist Sarah Hunter addressed the unusual behavior of the Australian Dollar in recent months in a speech today. She highlighted that while initial moves were consistent with past risk-off episodes, the currency’s subsequent rebound against the US Dollar stood out as “more unusual”.

    On a “trade-weighted” basis, AUD has remained broadly stable, even though it has appreciated against the greenback and the Chinese renminbi, while weakening against most other major currencies.

    This divergence, Hunter explained, stems from “offsetting factors”. Global growth concerns have pressured the AUD against safe-haven and cyclical peers, while simultaneous outflows from US assets have weakened the US Dollar.

    Hunter cautioned that it’s too soon to tell whether this trend will persist, but acknowledged that recent market behavior reflects shifting investor sentiment, particularly toward capital reallocation away from US assets. As a result, Australian Dollar’s relative resilience against USD may be underpinned by portfolio rebalancing and perceived relative economic stability.

    Hunter noted that the trade-weighted index has reverted to “pre-shock values”, suggesting minimal net change in the foreign-currency value of Australian exports. However, the “relative move of capital” into Australia, at a time when the US is facing policy and tariff-related volatility, could offer some support to “domestic investment activity”, providing a cushion to the broader economy amid global uncertainties.

    RBA Minutes: 25bps cut chosen for caution and predictability after debating hold and 50bps options

    RBA’s May 20 meeting minutes revealed that policymakers weighed three policy options—holding rates, a 25bps cut, or a larger 50bps reduction—before ultimately opting for a modest 25bps cut to 3.85%.

    The case for easing hinged on three key factors: sustained progress in bringing inflation back toward target without upside surprises, weakening global conditions and household consumption, and the view that a cut would be the “path of least regret” given the risk distribution.

    While members discussed a 50bps reduction after deciding to ease, they found the case for a larger move unconvincing. Australian data at the time showed little evidence that trade-related global uncertainty was materially harming domestic activity. Furthermore, some scenarios might even result in upward pressure on inflation, prompting caution. The Board also assessed that it was “not yet time to move monetary policy to an expansionary stance”.

    Ultimately, the Board judged that to move “cautiously and predictably” was more appropriate.

    Caixin PMI manufacturing drops to 48.3, as China faces marked weakening at start of Q2

    China’s manufacturing sector unexpectedly shrank in May, with Caixin PMI falling to 48.3 from 50.4, well below market expectations of 50.6. This marked the first contraction in eight months and the lowest reading since September 2022.

    According to Caixin Insight’s Wang Zhe, both supply and demand weakened, with a particularly notable drag from overseas demand. Employment continued to contract, pricing pressures remained subdued, and logistics saw moderate delays. Although business optimism saw a marginal recovery, the broader picture points to intensifying headwinds.

    The report highlights the fragile start to Q2, with Wang pointing to a “marked weakening” in key economic indicators and a “significantly intensified” level of downward pressure.

    Fed’s Goolsbee warns against repeating ‘transitory’ mistake on tariff inflation

    Chicago Fed President Austan Goolsbee said in a webcast overnight that tariffs typically lead to a one-time price increase rather than sustained inflation.

    Drawing on textbook theory, he said a 10% tariff would create a 10% rise in prices for imported goods for “one year”, after which the inflationary effect dissipates. Such shocks are usually seen as “transitory” by central banks, Goolsbee explained.

    However, he warned against underestimating potential risks, citing lessons from the pandemic-era supply chain disruptions. “We learned the last time around” not to dismiss inflation too quickly, Goolsbee said, referencing how persistent inflation caught the Fed off guard.

    He added that scenarios combining rising prices and weakening labor markets, a stagflationary mix, present the most difficult challenge for monetary policy, as “there’s not an obvious playbook”.

    USD/CHF Daily Outlook

    Daily Pivots: (S1) 0.8139; (P) 0.8189; (R1) 0.8222; More….

    Intraday bias in USD/CHF stays on the downside as fall from 0.8475 is in progress for 0.8038 low. Strong support could be seen from there to bring rebound, on first attempt. On the upside, above 0.8248 minor resistance will turn intraday bias neutral first. However, decisive break of 0.8038 will confirm larger down trend resumption.

    In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8732) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Terms of Trade Index Q1 1.90% 3.60% 3.10% 3.20%
    23:50 JPY Monetary Base Y/Y May -3.40% -4.20% -4.80%
    01:30 AUD RBA Meeting Minutes
    01:30 AUD Current Account (AUD) Q1 -14.7B -12.0B -12.5B -16.3B
    01:45 CNY Caixin Manufacturing PMI May 48.3 50.6 50.4
    06:30 CHF CPI M/M May 0.10% 0.00%
    06:30 CHF CPI Y/Y May -0.10% 0%
    09:00 EUR Eurozone Unemployment Rate Apr 6.20% 6.20%
    09:00 EUR Eurozone CPI Y/Y May P 2.00% 2.20%
    09:00 EUR Eurozone CPI Core Y/Y May P 2.40% 2.70%
    14:00 USD Factory Orders M/M Apr -3.10% 3.40%

     



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  • Dollar Reverses as Markets Doubt Lasting Impact of US Tariff Ruling

    Dollar Reverses as Markets Doubt Lasting Impact of US Tariff Ruling


    Dollar initially surged after the US Court of International Trade ruled against President Donald Trump’s sweeping reciprocal tariff orders. Market participants initially interpreted the ruling as a potential turning point in the US trade policy, fueling a rally in the greenback and risk assets.

    However, the greenback’s rally proved short-lived. As the US session opened, the greenback reversed course and turned broadly lower. Traders began to reassess the practical implications of the ruling, with many suspecting that the Trump administration could still find legal or procedural workarounds to reinstate the tariffs.

    In that context, the ruling may have increased legal complexity but done little to reduce the overarching geopolitical uncertainty. Traders are clearly skeptical that the legal setback will lead to a meaningful shift in trade tensions.

    Indeed, skepticism is evident across financial markets. DOW futures, which had gained more than 500 points earlier in the day, gave back almost all of those gains. NASDAQ remained resilient, supported by tech sector optimism, but broader risk appetite appeared to fade. Gold, meanwhile, rebounded above the 3300 level as safe-haven demand returned, signaling that markets are still hedging against unresolved geopolitical and policy risks.

    In currency markets, the shift in sentiment was clear. Dollar is now the weakest performer of the day, followed by Sterling and then Yen. Aussie emerged as the top gainer, while Euro and Kiwi also firmed. Swiss Franc and Canadian dollar are trading in the middle of the pack.

    Technically, intraday bias in Gold is turned neutral first with current recovery. On the upside, break of 3365.92 resistance will revive the case that correction from 3499.79 has completed with three waves down to 3120.34, and bring retest of 349.79 high. Nevertheless, below 3245.23 will extend the corrective pattern with another falling leg.

    In Europe, at the time of writing, FTSE is flat. DAX is up 0.23%. CAC is up 0.63%. UK 10-year yield is down -0.006 at 4.726. GErmany 10-year yield is down -0.005 at 2.551. Earlier in Asia, Nikkei rose 1.88%. Hong Kong HSI rose 1.35%. China Shanghai SSE rose 0.70%. Singapore Strait times rose 0.13%. Japan 10-year JGB yield rose 0.003 to 1.520.

    US initial jobless claims rise to 240k vs exp 230k

    US initial jobless claims rose 14k to 240k in the week ending May 24, above expectation of 230k. Four-week moving average of initial claims fell -250k to 231k.

    Continuing claims rose 26k to 1919k in the week ending May 17, highest since November 13, 2021. Four-week moving average of continuing claims rose 3k to 1890k, highest since November 27, 2021.

    RBNZ’s Hawkesby: OCR in neutral zone, July cut not a done deal

    RBNZ Governor Christian Hawkesby told Bloomberg TV today that another rate cut at the July meeting is “not a done deal” and “not something that’s programmed.”

    With the OCR at 3.25% after this week’s reduction, it’s now sitting within the estimated neutral range of 2.5% to 3.5%. Hawkesby emphasized the central bank has entered a phase of “considered steps,” guided closely by incoming data rather than a preset easing path.

    He acknowledged rising uncertainty, noting that near-term growth headwinds have intensified and both demand and inflation pressures are weaker than they were back in February. He also highlighted the uncertainty surrounding global trade policy, particularly tariff developments, which could play out in various ways.

    NZ ANZ business confidence falls to 36.6, supporting case for further RBNZ easing

    New Zealand’s ANZ Business Confidence index dropped sharply in May, falling from 49.3 to 36.6. Own Activity Outlook, a key indicator of firms’ expectations for their own performance, declined to 34.8 from 47.7.

    Profit expectations also plunged to 11.1, indicating mounting pressure on margins. Although cost and wage expectations eased slightly, they remain elevated, while inflation expectations edged up from 2.65% to 2.71%.

    According to ANZ, the survey paints a mixed picture: the economy is in recovery mode, but businesses continue to face tough operating conditions, particularly in passing on cost increases. The data reinforces the view that RBNZ can afford to support growth through further rate cuts, barring any major inflation or data surprises.

    ANZ expects the OCR to eventually fall to 2.5%, as global headwinds and domestic fragilities persist.

    GBP/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.3440; (P) 1.3481; (R1) 1.3512; More…

    Intraday bias in GBP/USD remains neutral for the moment. With 1.3389 support intact, further rally is expected. On the upside, firm break of 1.3592 will resume larger rally for 100% projection of 1.2706 to 1.3442 from 1.3138 at 1.3874. However, decisive break of 1.3389 will confirm short term topping, and turn bias back to the downside for 1.3138 support instead.

    In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.2870) holds, even in case of deep pullback.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:00 NZD ANZ Business Confidence May 36.6 49.3
    01:30 AUD Private Capital Expenditure Q1 -0.10% 0.50% -0.20% 0.20%
    05:00 JPY Consumer Confidence May 32.8 31.8 31.2
    12:30 CAD Current Account (CAD) Q1 -2.1B -3.6B -5.0B -3.6B
    12:30 USD Initial Jobless Claims (May 23) 240K 230K 227K 226K
    12:30 USD GDP Annualized Q1 P -0.20% -0.30% -0.30%
    12:30 USD GDP Price Index Q1 P 3.70% 3.70% 3.70%
    14:00 USD Pending Home Sales M/M Apr -1.00% 6.10%
    14:30 USD Natural Gas Storage 98B 120B
    15:00 USD Crude Oil Inventories 0.3M 1.3M

     



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  • Dollar Surges as US Court Strikes Down Trump’s Reciprocal Tariffs; Risk Appetite Rebounds

    Dollar Surges as US Court Strikes Down Trump’s Reciprocal Tariffs; Risk Appetite Rebounds


    Dollar’s rebound gather extra momentum today, after the US Court of International Trade struck down President Donald Trump’s sweeping reciprocal tariffs, giving markets a fresh catalyst. The court ruled that the reciprocal tariffs imposed in April across multiple countries under claims of correcting trade imbalances exceeded presidential authority under the International Emergency Economic Powers Act. The decision marks a significant legal blow to Trump’s aggressive trade agenda.

    In a strongly worded decision, the three-judge panel concluded that the “Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.” The ruling also invalidated separate tariffs targeting Canada, Mexico, and China under the pretext of combating drug trafficking, stating those measures lacked a direct link to the threats cited. However, tariffs on specific items like steel and aluminum remain unaffected, as they were justified under different statutes not challenged in this case.

    The Trump administration has ten days to comply with the ruling, though it has already filed an appeal to the US. Court of Appeals for the Federal Circuit. While the immediate legal outcome remains uncertain, markets responded decisively to the court’s move.

    The decision sparked a broad risk-on reaction in financial markets, with DOW futures jumping over 500 points and Asian equities advancing, led by gains in Japan. Gold, which had been buoyed by safe-haven flows in recent sessions, fell below the 3250 level as investor sentiment improved. Nevertheless, 10-year Treasury yield remained steady around 4.5%, suggesting that bond markets are taking a more measured view, likely awaiting further clarity from the appeal process and ongoing trade negotiations.

    Dollar dominated currency markets, emerging as the clear outperformer of the day. It was followed by the Aussie and Loonie, both benefiting from the upbeat mood. At the bottom end, Yen is staying at the bottom, while Swiss Franc and Euro also softened. Kiwi and Sterling are positing in the middle.

    Technically, Gold’s break of 3279.22 support suggests that rebound from 3120.34 has already completed at 3365.92. Corrective pattern from 3499.79 should have started another falling leg. Deeper decline should be seen to 55 D EMA (now at 3190.95) first. Strong rebound from there will keep the pattern from 3499.79 a sideway one. However, sustained break of the 55 D EMA will open up deeper fall through 3120.34 to 100% projection of 3449.79 to 3120.34 from 3365.92 at 2980.47, which is slightly below 3000 psychological level.

    In Asia, at the time of writing, Nikkei is up 1.79%. Hong Kong HSI is up 1.07%. China Shanghai SSE is up 0.72%. Singapore Strait Times is down -0.30%. Japan 10-year JGB yield is up 0.003 at 1.521. Overnight, DOW fell -0.58%. S&P 500 fell -0.56%. NASDAQ fell -0.51%. 10-year yield rose 0.043 to 4.477.

    Looking ahead, the European calendar is empty with Switzerland, France and Germany on holiday. Later in the day, US will release GDP revision, jobless claims and pending home sales.

    RBNZ’s Hawkesby: OCR in neutral zone, July cut not a done deal

    RBNZ Governor Christian Hawkesby told Bloomberg TV today that another rate cut at the July meeting is “not a done deal” and “not something that’s programmed.”

    With the OCR at 3.25% after this week’s reduction, it’s now sitting within the estimated neutral range of 2.5% to 3.5%. Hawkesby emphasized the central bank has entered a phase of “considered steps,” guided closely by incoming data rather than a preset easing path.

    He acknowledged rising uncertainty, noting that near-term growth headwinds have intensified and both demand and inflation pressures are weaker than they were back in February. He also highlighted the uncertainty surrounding global trade policy, particularly tariff developments, which could play out in various ways.

    NZ ANZ business confidence falls to 36.6, supporting case for further RBNZ easing

    New Zealand’s ANZ Business Confidence index dropped sharply in May, falling from 49.3 to 36.6. Own Activity Outlook, a key indicator of firms’ expectations for their own performance, declined to 34.8 from 47.7.

    Profit expectations also plunged to 11.1, indicating mounting pressure on margins. Although cost and wage expectations eased slightly, they remain elevated, while inflation expectations edged up from 2.65% to 2.71%.

    According to ANZ, the survey paints a mixed picture: the economy is in recovery mode, but businesses continue to face tough operating conditions, particularly in passing on cost increases. The data reinforces the view that RBNZ can afford to support growth through further rate cuts, barring any major inflation or data surprises.

    ANZ expects the OCR to eventually fall to 2.5%, as global headwinds and domestic fragilities persist.

    FOMC minutes reveal deepening concerns over persistent inflation and trade-led slowdown

    The FOMC minutes from the May 6–7 meeting highlighted growing anxiety among policymakers about the dual threat of persistent inflation and deteriorating growth prospects, largely stemming from US trade policies.

    Nearly all participants flagged the risk that inflation could be “more persistent than expected” as the economy adjusts to elevated import tariffs. This situation, they warned, could force the Fed into “difficult tradeoffs” if inflation stays stubborn while growth and employment begin to falter.

    The Committee agreed that uncertainty surrounding the economic outlook had “increased further”, justifying a cautious stance on monetary policy, “until the net economic effects of the array of changes to government policies become clearer.”

    Fed staff revised their GDP projections lower for 2025 and 2026, citing a larger-than-anticipated drag from recent tariff announcements. Beyond the short-term impact, officials also warned of longer-term structural effects, with trade restrictions likely to slow productivity growth and reduce the economy’s potential “over the next few years.”

    The labor market outlook has also darkened, with staff forecasting the unemployment rate to rise above its “natural rate” by year-end and remain elevated through 2027.

    Inflation forecast was revised higher, with tariffs seen boosting prices notably in 2025, before gradually easing. Inflation is still expected to return to 2% by 2027, but the path there is now more complicated.

    EUR/USD Daily Outlook

    Daily Pivots: (S1) 1.1268; (P) 1.1307; (R1) 1.1329; More…

    EUR/USD’s break of 1.1255 support suggests that rebound 1.1064 has completed at 1.1417. Corrective pattern from 1.1572 is now extending with another falling leg. Intraday bias is back on the downside for 1.1064 first. Break there will target 100% projection of 1.1572 to 1.1064 from 1.1417 at 1.0909. For now, risk will stay on the downside as long as 1.1417 resistance holds, in case of recovery.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 55 W EMA (now at 1.0858) holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:00 NZD ANZ Business Confidence May 36.6 49.3
    01:30 AUD Private Capital Expenditure Q1 -0.10% 0.50% -0.20% 0.20%
    05:00 JPY Consumer Confidence May 32.8 31.8 31.2
    12:30 CAD Current Account (CAD) Q1 -3.6B -5.0B
    12:30 USD Initial Jobless Claims (May 23) 230K 227K
    12:30 USD GDP Annualized Q1 P -0.30% -0.30%
    12:30 USD GDP Price Index Q1 P 3.70% 3.70%
    14:00 USD Pending Home Sales M/M Apr -1.00% 6.10%
    14:30 USD Natural Gas Storage 98B 120B
    15:00 USD Crude Oil Inventories 0.3M 1.3M

     



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  • Risk Appetite Returns After Trump Backs Off Immediate EU Tariff Threat

    Risk Appetite Returns After Trump Backs Off Immediate EU Tariff Threat


    Global markets are showing tentative signs of relief after US President Donald Trump walked back his threat to impose a 50% tariff on the European Union. The abrupt shift to reinstate a July 9 deadline for negotiations has helped ease investor concerns for now. Stocks in Germany and France are trading modestly higher in European session, though the UK market remains closed for holiday. US equity futures are also pointing to a firmer open, suggesting a rebound from last week’s tariff-induced selloff. This shift in tone has also taken some steam out of safe-haven flows. Gold prices dipped slightly as investors rotated back into risk assets.

    The European Commission confirmed that trade representatives from both sides are scheduled to talk later today, describing the development as a “new impetus”. A Commission spokesperson noted that both parties have agreed to fast-track negotiations and remain in close contact, providing hope that a workable framework could still be reached before the “old” deadline.

    In the currency markets, the mildly risk-on environment is supporting higher-beta currencies. Kiwi and Aussie are leading the pack, with Sterling also gaining some traction. On the other hand, traditional safe havens like Yen, Swiss Franc are under modest pressure, while Dollar is also weak. Euro and Loonie positioning in the middle.

    For Gold, as long as 3279.22 support holds, the bullish case for Gold still holds. That is, correction from 3499.79 should have completed with three waves down to 3120.34. Further rise should be seen to retest 3499.79 next. Firm break there will resume larger up trend. Nevertheless, break of 3279.22 will dampen this case and extend the corrective pattern with another falling leg.

    In Europe, the UK is on holiday. DAX is up 1.45% at the time of writing, CAC i sup 0.97%. Germany 10-year yield is up 0.011 at 2.583. Earlier in Asia, Nikkei rose 1.00%. Hong Kong HSI fell -1.35%. China Shanghai SSE fell -0.05%. Singapore Strait Times fell -0.18%. Japan 10-year JGB yield fell -0.052 to 1.496.

    Fed Kashkari: Uncertainty to delay policy at least until September

    Minneapolis Fed President Neel Kashkari warned today that major shifts in US trade policies are clouding the outlook for monetary policy, making it difficult for the Fed to move on interest rates before September.

    While “anything is possible,” Kashkari said in an interview with Bloomberg TV, he’s unsure whether the picture will be “clear enough” by then. Much hinges, he added, on whether trade negotiations between the US and its partners yield concrete deals in the coming months, which could “provide a lot of the clarity we are looking for.”

    The uncertainty, Kashkari explained, is weighing on economic activity. He emphasized the stagflationary nature of the tariff shock, noting that its impact will depend on both the scale and duration of the levies.

    On financial markets, Kashkari acknowledged that rising US Treasury yields might reflect a broader reassessment by global investors about the risks of holding American assets. He suggested that the current bond market reaction could signal a new global paradigm.

    EUR/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.1303; (P) 1.1339; (R1) 1.1402; More…

    Intraday bias in EUR/USD remains on the upside for the moment. Correction from 1.1572 should have completed at 1.1064. Further rise should be seen to retest 1.1572 first. Decisive break there will resume larger up trend to 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927. On the downside, below 1.1255 minor support will turn intraday bias neutral, and probably extend the corrective pattern with another falling leg.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 55 W EMA (now at 1.0858) holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    05:00 JPY Leading Economic Index Mar F 108.1 107.7 107.7
    06:30 CHF Employment Level Q1 5.512M 5.534M

     



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  • Tariff Truce Wobbles at Halfway Mark; Risk Sentiment Falters on Renewed Threats

    Tariff Truce Wobbles at Halfway Mark; Risk Sentiment Falters on Renewed Threats


    Trade war roared back into focus late last week, derailing fragile market sentiment already strained by concerns over the ballooning US deficit. The catalyst came in the form of a sharp threat from US President Donald Trump on European Union imports. This abrupt escalation shattered hopes that the 90-day truce period would lead to calmer trade diplomacy, and instead reignited fears of a broader trade war just as markets were struggling to absorb fiscal uncertainty.

    US equities tumbled in response, with heavy losses across major indices, while European bourses weren’t spared either. Risk aversion swept through global markets, pushing investors toward traditional safe-haven assets.

    Dollar, which had already been under pressure from Moody’s downgrade and debt sustainability concerns, took another hit and ended the week as the worst-performing major currency. Confidence in US assets appears increasingly fragile as both fiscal and trade risks deepen.

    Aussie followed as the second weakest, burdened not just by global risk aversion but also by the dovish tone from RBA earlier in the week, while Loonie also suffered at the bottom.

    In contrast, the Japanese Yen and Swiss Franc surged to the top of the FX leaderboard, clearly benefiting from haven demand. Gold also staged a powerful rally, with its bullish momentum signaling deep market unease.

    Euro and Sterling settled in the middle of the pack. While the Euro showed some vulnerability to Trump’s tariff threat, it remained relatively supported. Sterling, meanwhile, was underpinned by a series of stronger-than-expected economic data, including upside surprises in inflation and retail sales.

    Trade War Returns to Spotlight as Trump’s Tariff Threat on EU Hammers Markets, Dollar Slides

    The global financial markets, which had been preoccupied with US sovereign debt concerns and the impact of a Moody’s downgrade earlier in the week, saw sentiment quickly shift as trade war tensions re-emerged. The trigger came late Friday, when US President Donald Trump declared he is “recommending a straight 50% Tariff on the European Union,” citing frustration with stalled negotiations. The announcement stunned investors and reignited fears of a wider spiral, sending US stocks and Dollar sharply lower into the weekly close.

    Equity markets, which had enjoyed a strong six-week rally driven by optimism from the 90-day tariff truce with major trading partners, were caught off guard. As little tangible progress was made halfway through the truce period, Trump’s shift back to hardline tactics was interpreted as a sign that the administration may be preparing to walk away from negotiation tables. The renewed threat has not only clouded the outlook for trade but also raised concerns over the policy direction in Washington.

    Speaking at a White House event, Trump made clear his stance: “I’m not looking for a deal. I mean, we’ve set the deal. It’s at 50%.” Treasury Secretary Scott Bessent echoed the sentiment, suggesting the tariff threat was intended to “light a fire under the EU.” These remarks hinted at a deliberate strategy to escalate pressure on Brussels ahead of the June 1 deadline.

    In response, European Commission Vice President Maros Sefcovic stated the EU remains “fully engaged” and committed to securing a mutually beneficial deal. He emphasized that negotiations must be “guided by mutual respect, not threats,” and warned the EU stands ready to defend its interests. Despite diplomatic overtures, the tone on both sides suggests little ground has been gained, making further market volatility likely as the deadline nears.

    In summary, the re-ignition of trade tensions with the EU has thrown markets back into uncertainty. With US fiscal policy already under scrutiny and tariff escalation threatening global growth, investors may remain on the defensive until clearer direction emerges, either through a breakthrough in negotiations or a change in Washington’s rhetoric. Until then, volatility and risk aversion are likely to dominate.

    Technically, DOW’s extended decline last week indicates that a short term top was already formed at 42842.04. More consolidations would be seen with risk of deeper decline. But overall near term outlook will stay bullish as long as 38.2% retracement of 36611.78 to 42842.04 at 40462.08 holds.

    However, rise from 36611.78 is seen as the second leg of the medium term corrective pattern from 45073.63 high. So, even in case of another rise, DOW should start to lose momentum again as it approaches 45073.63.

    Dollar Index’s late break of 99.17 support argues that corrective rebound from 97.92 might have completed at 101.97 already. Further decline is now in favor in the near term to retest 97.92 low first. Firm break there will resume the larger down trend to 61.8% projection of 100.17 to 97.92 from 101.97 at 94.40.

    European Stocks Also Hit by Tariff Shock; DAX and CAC Signal Near-Term Tops

    European equities also slumped in tandem with the US on Friday on Trump’s tariff threat. The announcement dealt a direct blow to investor sentiment across the region, with Germany’s DAX and France’s CAC 40 each falling around -1.6% on the day.

    However, Germany’s equity outlook, and to a lesser extent the region’s, should remain underpinned by fiscal expansion at both national and EU levels, which could cushion downside risks and support a medium-term bullish outlook.

    Technically, the late selloff in DAX indicates that 24154.24 record high should already be a short term top. Near term risk is mildly on the downside for pull back to 55 D EMA (now at 22610.12). Nevertheless, strong support should emerge from 38.2% retracement of 18489.91 to 24154.24 at 21989.23 to contain downside to bring rebound.

    CAC should have formed a short term top at 7955.53, and turned into consolidations. Given CAC’s underperformance comparing to DAX, there is risk of dipping through 38.2% retracement of 6763.76 to 7955.53 at 7500.27. But strong support should be seen above 61.8% retracement at 7219.02 to contain downside.

    Aussie Under Fire as RBA’s Dovish Cut Fuels July Easing Bets

    Aussie ended last week as one of the weakest performers among major currencies, additionally weighed down by the dovish 25bps rate cut from RBA. While the move was widely expected, RBA Governor Michele Bullock revealed that the board had actively considered a larger 50bps reduction before settling on the more measured step.

    Bullock also deliberately leave the door open for fasting easing, as she indicated that “if we need to move quickly, we can. We have got space.”

    Alongside the cut, RBA downgraded its 2025 GDP growth forecast from 2.1% to 1.9% and revised year-end CPI projections sharply lower, from 3.7% to 3.0%.

    These adjustments cemented the market’s view that the easing cycle has room to run, with rate futures now assigning more than 50% probability to another cut as early as July and fully pricing in a second 25bps cut by August.

    Technically, AUD/JPY failed to sustain above 38.2% retracement of 109.36 to 86.03 at 94.94, and retreated from there. Focus is now on 92.10 cluster support (38.2% retracement of 86.03 to 95.63 at 91.96).

    Strong rebound from 91.96/92.10 will retain near term bullishness. Further break of 95.63 will solidify the bullish case that whole fall form 109.36 has completed as a three-wave correction to 86.03.

    However, firm break of 91.96/92.10 will argue that the rebound has completed. More importantly, the down trend from 109.36 is likely still in progress for another low below 86.03.

    Gold Eyes Fresh Record High as Safe Haven Flows Persist

    Gold rallied strongly last week, supported by a confluence of factors including persistent concerns over the US fiscal outlook and escalating global trade tensions.

    With global equities showing signs of strain and long-dated US Treasury yields on the rise, capital has flowed steadily into Gold. The precious metal’s resilience suggests it may be gearing up to break above the record high of 3500, especially if risk aversion intensifies in the days ahead.

    Technically, corrective decline form 3499.79 should have completed with three waves down to 3120.34. That came after strong support from 55 D EMA (now at 3177.32) and 38.2% retracement of 2584.24 to 3499.79 at 3150.04.

    Further rise is expected as long as 3279.22 support holds, to retest 3499.79 high first. Decisive break there will resume larger up trend to 61.8% projection of 2584.24 to 3499.79 from 3120.34 at 3686.14 next.

    GBP/USD Weekly Outlook

    GBP/USD’s up trend resumed by breaking through 1.3442 resistance last week. Initial bias remains on the upside this week for 61.8% projection of 1.2706 to 1.3442 from 1.3138 at 1.3593, and then 100% projection at 1.3874. On the downside, below 1.3389 minor support will turn intraday bias neutral again first.

    In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.2843) holds, even in case of deep pullback.

    In the long term picture, for now, price actions from 1.0351 (2022 low) are still seen as a corrective pattern to the long term down trend from 2.1161 (2007 high) only. However, firm break of 1.4248 resistance (38.2% retracement of 2.1161 to 1.0351 at 1.4480) will be a strong sign of long term bullish reversal.



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  • Dollar Selloff Accelerates on Fiscal, Trade, and FX Policy Risks

    Dollar Selloff Accelerates on Fiscal, Trade, and FX Policy Risks


    Dollar came under broad selling pressure in Asian session, with fresh technical signals suggesting that the near-term recovery has already run its course. Also, the selloff appears to be gathering pace on a range of fundamental concerns.

    One focus is on Capitol Hill, where the House of Representatives is expected to vote on a multitrillion-dollar spending and tax package backed by US President Donald Trump. The bill is projected by nonpartisan analysts to add US 3 to 5 Trillion to the national debt, further exacerbating fiscal sustainability concerns in the wake of the Moody’s downgrade last Friday.

    Simultaneously, ongoing trade negotiations with major partners — including the EU, Japan, and China — have hit apparent roadblocks, reintroducing geopolitical friction into already cautious markets.

    Adding to Dollar’s vulnerability is the backdrop of the G7 finance ministers’ meeting underway in Canada. With concerns that US officials may be quietly welcoming a weaker Dollar to cushion trade headwinds and debt concerns, any perceived shift in post-meeting communiqué could further undermine confidence in the greenback.

    In the currency markets, risk-off tone is building up. Swiss Franc leads as the strongest performer this week so far, followed by Euro and Yen. The Dollar is the weakest, with Loonie and Aussie close behind. Sterling and Kiwi are hovering in the middle.

    Technically, Gold’s rally accelerates along with the selloff in the greenback. The break of 3265.74 resistance solidifies the case that correction from 3499.79 has completed with three waves down to 3120.34. Further rise is expected as long as 55 4H EMA (now at 3215.81) holds. Retest of 3434.76/3499.79 resistance zone should be seen next.

    In Asia, at the time of writing, Nikkei is down -0.21%. Hong Kong HSI is up 0.50%. China Shanghai SSE is up 0.39%. Singapore Strait Times is down -0.31%. Japan 10-year JGB yield is up 0.006 at 1.529. Overnight, DOW fell -0.27%. S&P 500 fell -0.39%. NASDAQ fell -0.38%. 10-year yield rose 0.006 to 4.481.

    Looking ahead, UK CPI is the main focus in European session. Later in the day, Canada will release new housing price index.

    Fed’s Musalem warns tariffs still a threat despite US-China truce

    St. Louis Fed President Alberto Musalem cautioned that even with the 90-day trade truce between the US and China, the current level of tariffs could still have “significant” short-term effects on the economy.

    In a speech overnight, he warned that tariffs are likely to “dampen economic activity” and further weaken the labor market. At the same time, tariffs could raise inflation both directly, through higher import prices, and indirectly, by triggering broader cost increases in domestic goods and services.

    Musalem outlined two potential monetary policy responses depending on how persistent the inflationary effects of tariffs prove to be.

    If the price impacts are temporary and inflation remains controlled, then it may be appropriate for the Fed to “look through” the short-term inflation spike and consider easing policy to cushion the labor market.

    However, if inflation proves stickier and starts to unanchor long-term expectations, Musalem argued that restoring price stability should take precedence, even at the cost of weaker growth and higher unemployment.

    “History tells us that restoring price stability is more costly for the public… if inflation expectations are not well anchored,” Musalem said.

    Fed’s Bostic: Tariff impact to surface as front-running shielding fades

    Atlanta Fed President Raphael Bostic warned that the economic effects of recent tariffs may be set to emerge more visibly, as businesses begin to exhaust their earlier stockpiling and “front-running” strategies.

    Speaking on the sidelines of a conference, Bostic said that “a lot of the tariff impact to date has actually not shown up in the numbers yet,” but the strategies used to insulate against cost shocks — such as building up inventories — “are starting to run their course.”

    As these buffers fade, Bostic expects that changes in prices could follow soon, offering a clearer view of how tariffs will impact both inflation and consumer behavior. “We’re about to see some changes in prices, and then we’re going to learn how consumers are going to respond to that,” he noted.

    Given the heightened uncertainty, Bostic maintained a cautious tone on policy. “We should wait and see where the economy is going before we do anything definitive,” he said.

    Japan’s US-bound exports fall -1.8% yoy as tariffs and strong Yen Bite

    .Japan’s export growth slowed to just 2.0% yoy in April, marking the weakest pace since October 2024.

    Notably, shipments to the US fell -1.8% yoy — the first decline in four months — as demand for automobiles, steel, and ships weakened. Exports of automobiles alone dropped -4.8% yoy by value, impacted by a stronger Yen and reduced demand for high-end models.

    The decline coincides with the imposition of 25% US tariffs on Japanese auto, steel, and aluminum exports, alongside the 10% blanket levy applied to most trade partners under the current US trade regime.

    Trade with Asia remained more resilient, with exports rising 6.0% yoy. However, shipments to China dipped -0.6% yoy.

    On the import side, Japan saw a -2.2% yoy contraction, resulting in a trade deficit of JPY -115.8B.

    Seasonally adjusted figures show a -2.7% mom drop in exports and a -1.4% mom drop in imports, with the adjusted trade deficit widening to JPY -409B.

    Australia’s leading index falls to 0.2%, growth pulse fades

    Australia’s Westpac Leading Index slowed from 0.5% to 0.2% in April, signaling a loss in growth momentum.

    According to Westpac, the above-trend growth seen earlier this year has “all but disappeared,” primarily due to rising global trade uncertainty and weaker commodity prices.

    While these external pressures dominate, domestic factors such as a slowing labor market and only modest support from interest rate cuts are also contributing to the loss of momentum.

    The overall picture suggests a stalling in the already tepid recovery, with GDP growth expected to reach just 1.9% by the end of 2025, well below historical averages.

    Following RBA’s recent 25bps rate cut to 3.85%, Westpac expects a cautious pause at the next policy meeting on July 7–8. The central bank is likely to await further clarity from the Q2 inflation data due at the end of July before considering additional easing.

    USD/CHF Daily Outlook

    Daily Pivots: (S1) 0.8256; (P) 0.8309; (R1) 0.8337; More….

    USD/CHF’s downside accelerations suggests that corrective recovery from 0.8038 has already completed with three waves up to 0.8475. Intraday bias is back on the downside, and break of 0.8184 support will solidify this bearish case. Further break of 0.8038 will resume larger down trend to 61.8% projection of 0.9200 to 0.8038 from 0.8475 at 0.7757 next. On the upside, above 0.8347 minor resistance will delay the bearish case and turn intraday bias neutral again first.

    In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8765) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Trade Balance (NZD) Apr 1426M 500M 970M 794M
    23:50 JPY Trade Balance (JPY) Apr -0.41T -0.19T -0.23T -0.29T
    01:00 AUD Westpac Leading Index M/M Apr -0.01% -0.11% -0.15%
    06:00 GBP CPI M/M Apr 1.10% 0.30%
    06:00 GBP CPI Y/Y Apr 3.30% 2.60%
    06:00 GBP Core CPI Y/Y Apr ` 3.60% 3.40%
    06:00 GBP RPI M/M Apr 1.50% 0.30%
    06:00 GBP RPI Y/Y Apr 4.20% 3.20%
    12:30 CAD New Housing Price Index M/M Apr 0.10% 0.00%
    14:30 USD Crude Oil Inventories -0.9M 3.5M

     



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  • Moody’s Downgrade Disrupts Calm from Tariff Truce, Dollar Faces New Test

    Moody’s Downgrade Disrupts Calm from Tariff Truce, Dollar Faces New Test


    Just as markets were finding their footing following a series of positive trade developments, Moody’s delivered a late-week shock by downgrading the US sovereign credit rating from Aaa to Aa1. The move overshadowed the optimism sparked by the US-China tariff truce and the broader de-escalation of trade tensions.

    The trade outlook appears less volatile in the near term, with more agreements possibly in the pipeline. Markets may enjoy a reprieve from tariff headlines until early July for non-China partners, and until mid-August for China.

    However, that stability could be abruptly shaken by Moody’s downgrade. The timing of the downgrade coincides with fragile improvements in sentiment, raises the risk of renewed selling in both Treasuries and Dollar.

    In the currency markets, performance was mixed last week, a hallmark of broader consolidation. Dollar finished as the strongest currency but notably failed to build on its early-week strength. Aussie followed as the second-best performer, buoyed by strong domestic job data and risk appetite, while Sterling also held firm with support from strong UK GDP. However, gains were limited overall. On the weaker side, Euro posted the poorest performance, followed by Swiss Franc and Kiwi. Yen and Loonie ended the week in the middle.

    Wall Street Surges on Trade Truce, Even Though Soaring Inflation Expectations Reinforce Fed Patience

    US equity markets wrapped up the week with strong gains, driven by renewed optimism over global trade and investor resilience, despite worrying economic signals. S&P 500 surged 5.3%, DOW added 3.4%, and NASDAQ Composite outperformed with a 7.2% jump. The rally was initially sparked by the surprising outcome of the US-China trade meeting. Both sides agreed to a 90-day truce and rolled back a significant portion of the tariffs, though not fully returning to pre-conflict levels.

    Investors looked past several downside risks and pushed stock prices higher, even as economic data pointed to potential trouble ahead. Markets absorbed weak consumer sentiment and sharply rising inflation expectations without flinching. This reflects a broader hope that trade normalization will continue to offset macro headwinds, at least in the short term.

    The University of Michigan’s preliminary consumer sentiment report for May, released Friday, highlighted growing public anxiety. The headline index dropped to 50.8, its second-lowest reading on record. Year-ahead inflation expectations surged from 6.5% to 7.3%, the highest since 1981.

    Importantly, the survey was conducted between April 22 and May 13. That timeframe includes the period after US President Donald Trump announced that reciprocal tariffs on all trading partners other than China would be scaled back to a 10% baseline. It also includes responses collected a day after the US-China truce was declared.

    In that context, the persistent collapse in sentiment and worsening inflation outlook suggest that consumers remain highly skeptical about the economic direction. Even the rollback of some tariffs was not enough to lift the mood or tame concerns about rising prices. Attention will now be on the final May release due May 30, to see if sentiment and expectations shift more positively as the trade truce sinks in.

    For Fed, the data likely reinforce a cautious stance, for holding back from another rate cut for longer. Fed funds futures now reflect just a 36% chance of a 25bps rate cut in July. Expectations rise to 75% for a September cut, followed by around 70% odds of another in December. That suggests markets believe only two rate cuts are likely this year, if any.

    Technically, S&P 500 gapped higher at the start of the week and extended its rally from 4835.04 low. The current rise is still viewed as the second leg in the medium-term corrective pattern from the 6147.43 high. Momentum should start to fade above 6000 psychological level. A break below 5720.10 gap support would indicate short-term topping. Sustained trading below 55 Day EMA (now at 5650.80) would suggest that the third leg of the correction has already begun.

    Moody’s Downgrade Casts Shadow Over Dollar and Treasuries

    Despite a strong weekly finish for Wall Street and Dollar, sentiment faces a fresh challenge after Moody’s downgraded the US sovereign credit rating on Friday. The move, announced after markets closed, cut the rating by one notch to Aa1 from Aaa—marking a rare loss of top-tier status. While the immediate market reaction was muted due to timing, the downgrade could cast a shadow over financial markets in the coming week, with pressure potentially building on both Dollar and US Treasuries.

    Notably, Dollar ended as the top-performing major currency last week, but it did so without conviction. After Monday’s initial surge, momentum faded quickly. By midweek, the greenback began to stall, showing little follow-through despite stronger inflation expectations. That suggests underlying demand may be fragile.

    Moody’s cited deteriorating fiscal outlook as the key reason for the downgrade, pointing to “successive US administrations and Congress” that have failed to reverse the trend of widening deficits and rising debt servicing costs. The agency also expressed skepticism that meaningful fiscal reforms are on the horizon, making clear that the downgrade reflects more than just short-term political risks. The downgrade reflects not only mounting fiscal stress, but also the political impasse that continues to hinder structural reforms.

    This backdrop is especially important given how markets reacted in early April, when sweeping reciprocal tariffs imposed by the US triggered a rally in Treasury yields and broad weakening of Dollar. That episode suggested investors may be reassessing traditional assumptions about the US’s role as the ultimate safe asset provider. A similar dynamic could resurface if the Moody’s downgrade gains traction with bondholders or sparks broader credit rating scrutiny.

    Technically, 10-year yield’s strong rise last week suggests that near term correction from 1.4592 has already completed at 4.124. Rise from 3.886 might be ready to resume. Further rally is now in favor as long as 55 D EMA (now at 4.3437) holds. Firm break of 4.592 would target 100% projection of 3.886 to 4.592 from 4.124 at 4.830 next.

    Dollar Index’s corrective recovery from 97.92 continued last week, but started to struggle ahead of 55 D EMA (now at 101.93). While another rise cannot be ruled out, upside should be limited by 38.2% retracement of 110.17 to 97.92 at 102.60. On the downside, break of 99.17 support will argue that larger down trend is ready to resume through 97.92 low.

    One asset that could benefit from renewed stress on the Dollar and Treasuries is Gold. Technically, Gold is now at an ideal level to complete the corrective pullback from 3499.79 high. Current levels include 55 D EMA (now at 3152.88) and 38.2% retracement of 2584.24 to 3499.79 at 3150.04. On the upside, firm break of 3262.74 resistance should bring stronger rally back to 3434.76/3499.79 resistance zone.

    EUR/USD Weekly Outlook

    EUR/USD dived further to 1.1064 last week but recovered ahead of 38.2% retracement of 1.0176 to 1.1572 at 1.1039. Initial bias remains neutral this week first. Strong support is still expected from 1.1039 to complete the correction from 1.1572. On the upside, above 1.1292 will bring stronger rise back to retest 1.1572. However, sustained break of 1.1039 will dampen this view and target 61.8% retracement at 1.0709 next.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 55 W EMA (now at 1.0818) holds.

    In the long term picture, the case of long term bullish reversal is building up. Sustained break of falling channel resistance (now at around 1.1300) will argue that the down trend from 1.6039 (2008 high) has completed at 0.9534. A medium term up trend should then follow even as a corrective move. Next target is 38.2% retracement of 1.6039 to 0.9534 at 1.2019.



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  • Weak Data Overlooked as Yen Rises on Risk-Off Mood

    Weak Data Overlooked as Yen Rises on Risk-Off Mood


    Mild risk-off mood is helping Yen to extend its near-term rebound, despite fresh signs of economic weakness at home. Japan’s economy was already showing signs of strain even before the impact of US tariffs, with Q1 GDP contracting more sharply than expected. BoJ is left in an increasingly precarious position, wedged between deteriorating growth and persistent inflationary pressures.

    A recent Reuters poll taken between May 7 and 13 revealed a significant shift in market expectations, with 67% of economists now projecting that BoJ will hold its policy rate at 0.50% through the third quarter. That’s up sharply from just 36% a month ago, highlighting how tariff-related risks have changed expectations for near-term tightening.

    On the trade front, Japan is preparing a third round of negotiations with the US, as it seeks to secure exemptions from tariffs on automobiles and auto parts. In return, Tokyo is reportedly considering a set of concessions, including increased imports of US corn and soybeans, regulatory changes to auto inspection standards, and cooperation in shipbuilding technology.

    Chief negotiator Ryosei Akazawa is expected to travel to Washington as early as next week, though the timeline hinges on progress in working-level talks. Meanwhile, Finance Minister Katsunobu Kato will travel to Canada for G7 meetings, where he may hold bilateral discussions with US Treasury Secretary Scott Bessent on foreign exchange matters.

    Overall for the week so far, Yen is currently the top performer, followed by Sterling and then Dollar. Kiwi is the weakest, trailed by Euro and Swiss Franc. Loonie and Aussie sit in the middle of the pack. The overall tone in the currency markets remains mixed.

    Technically, Gold has bounced from key cluster support around 3150, including 55 D EMA (now at 3151.09) and 38.2% retracement of 2584.24 to 3499.79 at 3150.04. It’s possible that correction from 3499.79 has completed already. Firm of 3265.74 will reinforce this bullish case, and suggest that larger up trend is ready to resume. If realized, that should be accompanied by another round of selloff in Dollar. However, sustained break of 3150 will dampen this view and bring deeper fall to 61.8% retracement at 2933.98.

    In Asia, at the time of writing, Nikkei is down -0.06%. Hong Kong HSI is down -0.40%. China Shanghai SSE is down -0.34%. Singapore Strait Times is down -0.20%. Japan 10-year JGB yield is down -0.016 at 1.463. Overnight, DOW rose 0.65%. S&P 500 rose 0.41%. NASDAQ fell -0.18%. 10-year yield fell -0.073 to 4.455.

    Looking ahead, Eurozone trade balance in the main feature in European session. Later in the day, US will release housing starts and building permits, and import prices. But attention will be on U of Michigan consumer sentiment and inflation expectations.

    Japan’s GDP contracts -0.2% qoq in Q1, export drag offsets capex gains

    Japan’s economy shrank by -0.2% qoq in Q1, marking its first contraction in a year and falling short of the -0.1% qoq consensus. On an annualized basis, GDP contracted by -0.7%, a sharp disappointment compared to expectations for -0.2%.

    The weakness was largely driven by external demand, which subtracted -0.8 percentage points from growth as exports declined -0.6% qoq while imports jumped 2.9% qoq.

    Domestically, the picture was mixed. Private consumption, comprising more than half of Japan’s output, was flat on the quarter. However, capital expenditure provided some support, rising by a solid 1.4% qoq.

    Meanwhile, inflation pressures showed no sign of easing, with the GDP deflator accelerating from 2.9% yoy to 3.3% yoy, above expectations of 3.2% yoy.

    RBNZ inflation expectations rise to 2.41%, further easing seen ahead

    RBNZ’s latest Survey of Expectations for May revealed a notable uptick in inflation forecasts across all time horizons.

    One-year-ahead inflation expectations climbed from 2.15% to 2.41%, while two-year expectations rose from 2.06% to 2.29%. Even long-term projections edged higher, with five- and ten-year-ahead expectations increasing to 2.18% and 2.15% respectively.

    Despite the upward revisions in inflation outlook, expectations for monetary policy point clearly toward easing.

    With the Official Cash Rate currently at 3.50%, most respondents anticipate a 25 bps cut by the end of Q2. Looking further ahead, the one-year-ahead OCR expectation also declined from 3.23% to 2.91%.

    NZ BNZ manufacturing rises to 53.9, recovery gains ground

    New Zealand’s BusinessNZ Performance of Manufacturing Index edged up from 53.2 to 53.9 in April. The gain was driven by improvements in employment and new orders, up to 55.0 and 51.4 respectively, with employment reaching its highest level since July 2021. However, production eased slightly to 53.8.

    BNZ Senior Economist Doug Steel noted that while the sector isn’t booming, the recovery is clear, with the PMI rebounding sharply from a low of 41.4 last June.

    Still, he cautioned, “there remain questions around how sustainable it is given uncertainty stemming from offshore”.

    Fed’s Barr: Solid economy faces threats from tariff-driven supply disruptions

    Fed Governor Michael Barr highlighted solid growth, low unemployment, and continued progress on disinflation in the US economy. However, he flagged growing concern over rising trade-related uncertainty, which has begun to weigh on consumer and business sentiment.

    In a speech overnight, Barr specifically pointed to the vulnerability of small businesses, which are more exposed to “disruptions to supply chains and distribution networks”.

    These firms are integral to broader production networks, and failures in this segment could trigger cascading effects across the economy.

    Drawing a parallel to the pandemic, Barr noted that “disruptions can have large and lasting effects on prices, as well as output,” leading to lower growth and higher inflation ahead.

    USD/JPY Daily Outlook

    Daily Pivots: (S1) 145.13; (P) 145.97; (R1) 146.53; More…

    Intraday bias in USD/JPY remains neutral and more consolidations could be seen below 148.64. . Further rally is expected as long as 144.02 resistance turned support holds. As noted before, fall from 158.86 could have completed 139.87 already. Above 148.64 will target 61.8% retracement of 158.86 to 139.87 at 151.60 next. However, firm break of 144.02 will bring retest of 139.87 low instead.

    In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:30 NZD Business NZ PMI Apr 53.9 53.2
    23:50 JPY GDP Q/Q Q1 P -0.20% -0.10% 0.70%
    23:50 JPY GDP Deflator Y/Y Q1 P 3.30% 3.20% 2.90%
    03:00 NZD RBNZ Inflation Expectations Q2 2.29% 2.06%
    04:30 JPY Industrial Production M/M Mar F 0.20% -1.10% -1.10%
    09:00 EUR Eurozone Trade Balance (EUR) Mar 17.5B 21.0B
    12:30 USD Housing Starts Apr 1.37M 1.32M
    12:30 USD Building Permits Apr 1.45M 1.48M
    12:30 USD Import Price Index M/M Apr -0.40% -0.10%
    14:00 USD UoM Consumer Sentiment May P 53 52.2
    14:00 USD UoM Inflation Expectations May P 6.50%

     



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  • Markets Cautious Despite US-China Trade Progress, US Inflation and Consumer Data In Focus This Week

    Markets Cautious Despite US-China Trade Progress, US Inflation and Consumer Data In Focus This Week


    Markets opened the week on a subdued note despite the White House’s announcement that a trade agreement had been reached with China following negotiations in Switzerland. Despite the positive headline, investor reaction has been muted with lackluster performance in Asian stocks. Traders appear to be holding back judgment, at least until US Treasury Secretary Scott Bessent’s full briefing later in the day.

    In the currency markets, commodity currencies including Kiwi, Aussie and Loonie are outperforming slightly, supported by cautious optimism surrounding global trade. Meanwhile, traditional safe-haven currencies, Yen and Swiss Franc, are softening, along with Euro. Dollar and British Pound are trading mixed in the middle..

    This week brings a raft of high-profile US data, with particular attention on CPI, PPI, and retail sales. These releases will offer the first real look at how the sweeping April tariffs are affecting consumer prices and spending behavior.

    Technically, AUD/JPY is showing encouraging signs of strength as risk appetite improves. The rebound from the 86.03 low is resuming, with the pair now trading above 55 D EMA at 92.84. Sustained trading above this EMA will add to the case that correction from 109.36 (2024 high) has completed at 86.03. Next target will be 38.2% retracement of 109.36 to 86.03 at 94.94. However, break of 92.10 support will dampen this bullish view and mix up the outlook.

    In Asia, at the time of writing, Nikkei is up 0.05%. Hong Kong HSI is up 0.93%. China Shanghai SSE is up 0.37%. Singapore is on holiday. Japan 10-year JGB yield is up 0.039 at 1.393.

    Gold Falls as US-China Trade Deal Signals Easing Tensions

    Gold opened the week on the back foot as signs of further easing global trade tensions dented demand for safe-haven assets. The White House posted a surprise announcement of a trade agreement with China after weekend negotiations in Geneva. While no details were released immediately, both sides described the outcome as positive.

    US Treasury Secretary Scott Bessent called the talks a source of “substantial progress,” with a full briefing promised for Monday. US Trade Representative Jamieson Greer said the deal would help resolve the ongoing “national emergency” in trade. China’s Vice Premier He Lifeng confirmed both sides had reached “important consensus” and agreed to create a consultation mechanism for economic and trade issues.

    Markets appear to be cautiously optimistic that the US-China agreement marks a turning point in the broader trade conflict, at least in tone and intent. Investors are likely waiting for concrete details before reassessing the longer-term outlook, but for now, the improved risk sentiment is weighing on Gold’s short-term appeal.

    Technically, Gold’s extended decline suggests that rebound from 3201.70 has completed at 3434.76. Fall from there is now seen as the third leg of the corrective pattern from 3499.79 high. Deeper fall is in favor to 3201.70 support and possibly below. Still, down side should be contained by 38.2% retracement of 2584.24 to 3499.79 at 3150.04, which is close to 55 D EMA (now at 3144.42). Larger up trend is expected to resume after the correction completes.

    Bitcoin losing momentum after strong rally

    Bitcoin posted a strong rally last week, driven by a combination of improved global risk sentiment and sustained institutional demand through exchange-traded funds. A key driver has been BlackRock’s spot Bitcoin ETF, which extended its inflow streak to 19 consecutive trading days, its longest run of the year. These flows have provided strong tailwinds for Bitcoin, helping push prices closer to the 109,571 record high.

    However, signs are emerging that the rally may be losing steam, as seen in 4H MACD. A break below 102,291 support level would confirm short term topping, opening the door for a deeper pullback toward the 93,351 zone.

    The depth and structure of the correction, if realized, will be critical in assessing whether the advance from 74,373 low marks resumption of the long-term uptrend. Or it was merely the second leg in the medium term corrective pattern from the all-time high of 109,571.

     

    US data deluge to reveal first hints of tariff impacts

    This week will be packed with key economic data from the US, Japan, the UK and Australia. In particular for the US, tariffs impacts are beginning to filter through inflation and consumption indicators.

    The US April CPI and PPI reports will be the first meaningful look at how tariffs are affecting price levels. While it’s likely too early to see the full pass-through, any uptick in goods inflation could point to the initial impact of the 10–145% import duties imposed last month. In this round, annual readings will remain relevant, but month-on-month changes could carry more market impact at this early stage of the tariff cycle.

    Alongside inflation, April retail sales data will offer a clearer picture of how US consumers are reacting to any pricing shifts and the broader risk of higher costs on the horizon. The University of Michigan’s consumer sentiment survey, including its forward-looking inflation expectations component, will also provide key insight into how tariffs are feeding further into household psychology.

    In Japan, markets are increasingly convinced that BoJ will hold off on further tightening for longer, especially after it downgraded GDP forecasts. This week’s preliminary Q1 GDP data may confirm a contraction, reinforcing that view. Additionally, the BoJ’s Summary of Opinions from the latest policy meeting will give investors a sense of how concerned board members are about the rising risks from global trade disruptions and fragile domestic demand. A clear dovish tilt in the minutes could further weigh on Yen and push back rate hike expectations even further.

    From the UK, GDP and employment figures are due, but these are unlikely to shift the BoE from its current path of gradual easing—one 25bps cut per quarter—unless the data contains major surprises. Attention is likely to remain on the next phase of the recently announced US-UK trade agreement. With the framework now public, markets are looking for concrete details, timelines, and sector-specific implementations that could affect investment flows and business sentiment in the months ahead.

    Australia’s wage price index and job figures will also draw attention, though they are not expected to derail the current consensus for a rate cut from RBA later this month. Slowing growth, fading inflation momentum, and global uncertainty continue to dominate the domestic narrative.

    Here are some highlights for the week:

    • Monday: Japan current account; Eco Watcher sentiment.
    • Tuesday: BoJ Summary of Opinions; Australia Westpac consumer sentiment, NAB business confidence; UK employment; Germany ZEW economic sentiment; US CPI.
    • Wednesday: Japan PPI; Australia wage price index; Canada building permits.
    • Thursday: Australia employment; UK GDP, trade balance; Swiss PPI; Eurozone GDP revision, industrial production; Canada housing starts, manufacturing sales, wholesale sales; US retail sales, PPI, jobless claims, Empire State manufacturing, Philly Fed manufacturing, industrial production, business inventories, NAHB housing index.
    • Friday: New Zealand BNZ manufacturing, inflation expectations; Japan GDP; Eurozone trade balance; US building permits and housing starts, import prices, UoM consumer sentiment and inflation expectations.

    USD/CHF Daily Outlook

    Daily Pivots: (S1) 0.8192; (P) 0.8232; (R1) 0.8278; More….

    USD/CHF’s breach of 0.8333 suggests that rebound from 0.8038 is resuming. Intraday bias is back on the upside for 38.2% retracement of 0.9200 to 0.8038 at 0.8482. But strong resistance should be seen there to limit upside. On the downside, firm break of 0.8184 support will argue that the corrective rise has completed, and bring retest of 0.8038.

    In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8750) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:50 JPY Bank Lending Y/Y Apr 2.40% 2.80% 2.80%
    23:50 JPY Current Account (JPY) Mar 2.72T 2.42T 2.32T 2.91T
    05:00 JPY Eco Watchers Survey: Current Apr 42.6 44.5 45.1

     



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  • Dollar and Loonie Soft Ahead of Carney-Trump Meeting

    Dollar and Loonie Soft Ahead of Carney-Trump Meeting


    Dollar remains on the soft side today, although losses are so far limited. Currency market activity is subdued as traders remain cautious ahead of the upcoming FOMC rate decision. While no policy changes are expected from the Fed tomorrow, markets are watching closely for any forward guidance. Notably, expectations for a June rate cut have continued to fade, with implied probabilities falling below 30%, reflecting the resilience of recent economic data, particularly on jobs.

    However, the bigger driver of sentiment remains progress, or the lack thereof, on the trade front. Canadian Prime Minister Mark Carney is scheduled to meet President Donald Trump in Washington on Tuesday — the first face-to-face since Carney’s April 28 election victory. Trade and security are set to top the agenda. Canada is expected to bring proposals linked to energy and critical minerals, hoping to secure relief from US tariffs. Still, Carney has emphasized that substance will take precedence over speed.

    Meanwhile, US Treasury Secretary Scott Bessent hinted on Monday that deals with some trading partners were “very close,” echoing Trump’s remarks over the weekend. Yet no concrete agreements have been announced. A Bloomberg report suggested India is willing to offer zero tariffs on selected goods, but details remain sparse. Overall, market optimism over trade progress exists but is tempered by repeated delays and lack of formal announcements.

    So far this week, Dollar is the weakest performer, though still above last week’s lows. Loonie is also under pressure as markets await Carney’s Washington visit. Euro is lagging as well. Yen leads the gainers, followed by Kiwi and Swiss Franc. Sterling and Aussie are holding in the middle of the pack.

    Technically’s EUR/CAD’s decline from 1.5959 is currently seen as part of a corrective pattern to the rally from 1.4483. Deeper fall is expected as long as 1.5816 resistance holds, to 55 D EMA (now at 1.5505) and possibly below. But strong support should be seen from 1.5402 cluster support (38.2% retracement of 1.4483 to 1.5959 at 1.5395) to contain downside.

    In Asia, Japan is still on holiday, Hong Kong HSI is up 0.62%. China Shanghai SSE is up 0.93%. Singapore Strait Times is up 0.20%. Overnight, DOW fell -0.24%. S&P 500 fell -0.64%. NASDAQ fell -0.74%. 10-year yield rose 0.021 to 4.343.

    Looking ahead, Swiss unemployment rate, France industrial production, Eurozone PMI services final and PPI, and UK PMI services final will be released in European session. Later in the day, Canada and US will publish trade balance.

    Gold breaks higher, eyes on 3500 and beyond

    Gold’s extended rebound and break of 3352.97 resistance argues that correction from 3449.79 has already completed at 3201.70. Further rise is now expected to 3499.79 and then 61.8% projection of 2956.61 to 3449.70 from 3201.70 at 3537.38. Decisive break of 3537.38 could prompt upside acceleration towards 100% projection at 3744.88. However, break of 55 4H EMA (now at 3287.46) will resume the corrective fall from 3499.79 with another downleg.

    In the bigger picture, the long term up trend remains intact and there is no sign of loss of momentum in W MACD, despite overbought condition in W RSI. Next medium term target remains at 261.8% projection of 1160.17 to 2074.84 from 1614.60 at 4009.20, which is close to 4000 psychological level.

    China’s Caixin PMI composite falls to 51.1, tariff impact to deepen in Q2–Q3

    China’s Caixin PMI Services dropped to 50.7 in April, down from 51.9 and missing expectations of 51.7. PMI Composite also slipped from 51.8 to 51.1, signaling weaker momentum across both manufacturing and services.

    According to Caixin’s Wang Zhe, the expansion in supply and demand has decelerated amid growing trade friction. Export-driven sectors remain under particular pressure, while job losses and muted pricing power continue to squeeze business margins. The employment component of the composite index also contracted.

    Perhaps most concerning, expectations for future activity plunged to the lowest levels on record, reflecting rising uncertainty among firms. “The ripple effects of the ongoing China-US tariff standoff will gradually be felt in the second and third quarter”, Wang added.

    USD/CHF Daily Outlook

    Daily Pivots: (S1) 0.8200; (P) 0.8237; (R1) 0.8261; More….

    USD/CHF is still bounded in range below 0.8333 and intraday bias stays neutral at this point. On the upside, above 0.8333 will resume the rebound from 0.8038. However, upside should be limited by 38.2% retracement of 0.9200 to 0.8038 at 0.8482. On the downside, below 0.8196 minor support will bring retest of 0.8038. Firm break there will resume larger down trend.

    In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress and met 61.8% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.8079 already. In any case, outlook will stay bearish as long as 55 W EMA (now at 0.8763) holds. Sustained break of 0.8079 will target 100% projection at 0.7382.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:30 AUD Building Permits M/M Mar -8.80% -1.70% -0.30% -0.20%
    01:45 CNY Caixin Services PMI Apr 50.7 51.7 51.9
    06:45 EUR France Industrial Output M/M Mar 0.40% 0.70%
    07:50 EUR France Services PMI Apr F 46.8 46.8
    07:55 EUR Germany Services PMI Apr F 48.8 48.8
    08:00 EUR Eurozone Services PMI Apr F 49.7 49.7
    08:30 GBP Services PMI Apr F 48.9 48.9
    09:00 EUR Eurozone PPI M/M Mar -1.10% 0.20%
    09:00 EUR Eurozone PPI Y/Y Mar 2% 3%
    12:30 CAD Trade Balance (CAD) Mar -1.7B -1.5B
    12:30 USD Trade Balance (USD) Mar -124.7B -122.7B
    14:00 CAD Ivey PMI Apr 51.2 51.3

     



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  • Muted Major FX Action Masks Big Moves in Asia; Gold Rebound Gather Momentum

    Muted Major FX Action Masks Big Moves in Asia; Gold Rebound Gather Momentum


    The currency markets remain subdued in early trading this week, with the exception of a broad, mild Dollar weakness. Among the major currencies, movements have been muted despite notable developments. Swiss inflation falling back to 0% has increased pressure on the SNB to cut rates further to avoid deflation, but the Swiss Franc showed little response. Similarly, an unexpected improvement in Eurozone investor confidence failed to generate any sustained lift in the Euro.

    In equities, European stocks were mixed, lacking clear conviction, while UK markets closed for a public holiday. US futures also point to a slightly weaker open. Meanwhile, oil prices saw some stabilization but remained lower for the day after OPEC+ agreed to a production hike over the weekend. WTI crude is attempting to recover, but the bearish bias remains as markets now anticipate a potential production surplus in the second half of the year.

    The most eye-catching action is unfolding in Asian currency markets. Taiwanese Dollar soared more than 5% to a three-year high against Dollar, capping an 8% gain in just two sessions. The sharp move followed the conclusion of US-Taiwan trade talks last week, stoking speculation that a tacit agreement to strengthen the TWD may have been reached. While it’s denied by Taiwan’s central bank, the pace and scale of the rally suggest market confidence in a policy-backed shift, which would align with US interests in reducing bilateral trade imbalances.

    China’s offshore yuan also rallied sharply, touching a six-month high against the greenback. While no official catalyst was pinpointed, the move followed speculation that the US and China may soon begin tariff negotiations. However, any such discussions would be complex and drawn-out, likely injecting fresh volatility into CNY markets.

    Technically, one focus now is on how far Gold’s rebound could go. Firm break of 3352.97 resistance will indicate that correction from 3499.79 has already completed at 3201.70, ahead of 3167.62 resistance turned support. Retest of 3499.79 should be seen next, with prospect of breaking through this level to resume the record run.

    Eurozone Sentix confidence surges to -8.1 as investors cheer calm EU response to trade war

    Eurozone Sentix Investor Confidence rose sharply from -19.5 to -8.1,well above expectations. Current Situation Index climbed from -23.3 to -19.3, the highest level since August 2024. Expectations Index turned positive, rising from -15.8 to 3.8.

    Sentix credited the European Commission’s “level-headed response” toward escalating US trade actions for the improving sentiment. Additionally, a surprising improvement in inflation data has reinforced expectations that ECB will be able to continue its gradual rate-cutting cycle.

    While investors are clearly more upbeat, Sentix noted the mood was “more subdued but basically ‘calm’”, comparing to March.

    ECB’s Panetta warns protectionism threatens global prosperity

    Italian ECB Governing Council member Fabio Panetta warned today that rising protectionism poses a serious threat to global economic stability

    Speaking at an event, Panetta said, “Openness to trade has benefited both advanced and developing nations, reducing inequality and lifting hundreds of millions of people out of extreme poverty.”

    However, “protectionism threatens to undo these achievements and to weaken the very fabric of global prosperity,” he added.

    He emphasized that geopolitical tensions, alongside growing uncertainty in global trade, are becoming central considerations for policymakers.

    Swiss CPI drops to 0% as import deflation worsens

    Swiss consumer price growth came to a standstill in April, with headline CPI unchanged month-on-month for a second consecutive month.

    On an annual basis, inflation slowed sharply from 0.3% yoy to 0.0% yoy, marking a return to flat price levels not seen since the disinflationary spell of early 2021.

    Core CPI (excluding fresh and seasonal products, energy and fuel) also lost momentum, easing from 0.9% yoy to 0.6% yoy.

    The softness in inflation was driven by a decline in domestic product prices, which fell -0.1% mom and decelerated from 1.0% yoy to 0.8% yoy. Meanwhile, imported product prices offered a small offset, rising 0.3% mom but still contracting -2.5% yoy (prior -1.7% yoy).

    EUR/USD Mid-Day Outlook

    Daily Pivots: (S1) 1.1257; (P) 1.1319; (R1) 1.1364; More…

    EUR/USD is staying in tight range above 1.1265 and intraday bias remains neutral. On the downside, below 1.1265 will resume the corrective fall from 1.1572 short term top. But downside should be contained by 38.2% retracement of 1.0176 to 1.1572 at 1.1039. On the upside, break of 1.1424 will suggest that the correction has completed and bring retest of 1.1572 high.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 55 W EMA (now at 1.0808) holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    01:00 AUD TD-MI Inflation Gauge M/M Apr 0.60% 0.70%
    06:30 CHF CPI M/M Apr 0.00% 0.20% 0.00%
    06:30 CHF CPI Y/Y Apr 0.00% 0.30%
    08:30 EUR Eurozone Sentix Investor Confidence May -8.1 -14.9 -19.5
    13:45 USD Services PMI Apr F 51.4 51.4
    14:00 USD ISM Services PMI Apr 50.6 50.8

     



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  • FX Markets Hold Range While Yen Extends Slide

    FX Markets Hold Range While Yen Extends Slide


    Yen weakness remains the dominant theme in an otherwise range-bound forex market today. While all other major pairs and crosses are contained within yesterday’s trading range, the Japanese currency continues to lose ground as traders react to BoJ’s dovish tone. Governor Kazuo Ueda attempted to soften the impact of the downgraded growth outlook and emphasized that a delay in inflation convergence wouldn’t necessarily mean a delay in rate hikes.

    However, markets took greater note of his admission that the baseline scenario for Japan’s economy “no longer has very high probability,” a statement that effectively resets expectations for near-term tightening. The prospect of a move in June has effectively diminished, and the odds for a Q3 hike now hinge heavily on how trade negotiations evolve between the US and its key partners, including Japan.

    In the US, equity market sentiment is buoyant today as strong earnings from tech giants Meta Platforms and Microsoft lifted futures. Initial jobless claims rose more than expected, but the data has been largely brushed aside for now. Markets are instead turning attention to the upcoming ISM manufacturing report, which will offer more timely insights into how business activity and pricing dynamics are responding to the trade policy shockwaves. Still, the real litmus test for broader sentiment will be Friday’s non-farm payrolls release.

    On the week, Kiwi leads losses for now, followed by Yen and Euro. Loonie outperforms, along with Sterling and Swiss Franc. Dollar and Aussie are treading water in the middle of the pack.

    Technically. Gold’s correction from 3499.79 extended lower today. Deeper fall might be seen, but downside should be contained by 3167.62 resistance turned support, which is close to 38.2% retracement of 2584.24 to 3499.79 at 3150.04. Break of 3352.92 resistance will bring retest of 3499.79 high.

    In Europe, at the time of writing, FTSE is down -0.13%. UK 10-year yield is down -0.01 at 4.436. Germany and France are on holiday. Earlier in Asia, Nikkei rose 1.13%. Japan 10-year JGB yield fell -0.04 to 1.275. Hong Kong, China, and Singapore were on holiday.

    US initial jobless claims rise to 241k vs exp 221k

    US initial jobless claims rose 18k to 241k in the week ending April 26, above expectation of 221k. Four-week moving average of initial claims rose 5.5k to 226k.

    Continuing claims rose 83k to 1916k in the week ending April 19, highest since November 13, 2021. Four-week moving average of continuing claims rose 6k to 1868k.

    UK PMI manufacturing finalized at 45.4, rising costs, declining demand

    UK manufacturing continued to contract in April, with PMI finalized at 45.4, a modest rise from March’s 44.9.

    The sector is facing mounting challenges as output, new orders, and exports all declined further. Business confidence also fell to its lowest level since late 2022, reflecting growing unease over global trade disruptions and rising input costs.

    S&P Global’s Rob Dobson highlighted a nearly five-year record drop in new export orders, particularly from the US, Europe, and China.

    Manufacturers are also being squeezed by a surge in purchase price inflation, now at a 28-month high. This is prompting firms to raise prices and cut discretionary spending, reinforcing a troubling mix of “rising costs, declining demand”.

    BoJ holds rates, slashes growth outlook on trade headwinds

    BoJ kept its benchmark interest rate unchanged at 0.50% today, by unanimous vote, in line with expectations. However, it struck a cautious tone on the economic outlook by sharply cutting its growth forecasts.

    The central bank now projects Japan’s real GDP to grow just 0.5% in fiscal 2025, down from the 1.1% forecast in January, and 0.7% in fiscal 2026 (downgraded from 1.0%). Growth is expected to recover to 1.0% in fiscal 2027, assuming stabilization in global conditions.

    In its statement, BoJ acknowledged that “Japan’s economic growth is likely to moderate” as global trade and policy uncertainty weigh on external demand and corporate profitability. Still, the bank expects activity to reaccelerate once overseas economies resume “a moderate growth path.”

    On inflation, BoJ maintained that price pressures are broadly on course toward the 2% target, but revised its CPI core forecast down from 2.4% to 2.2% for fiscal 2025, and from 2.0% to 1.7% for fiscal 2026.

    BoJ raised its projection for the core-core CPI from 2.1% to 2.3% for fiscal 2025, reflecting persistent domestic inflation pressures. However, this is followed by a downgrade from 2.1% to 1.8% in 2026 before stabilizing at 2.0% in 2027.

    BoJ’s Ueda: Inflation target delay won’t necessarily postpone rate hikes

    At the post meeting press conference, BoJ Kazuo Ueda acknowledged that the surge in global trade tensions, sparked by the US’s “reciprocal” tariffs, has sharply elevated uncertainty over global policy direction. He warned that these tariff shocks would “weigh on” on Japan’s growth and inflation in the near term, but expressed hope that such effects would fade as overseas economies stabilize.

    Ueda noted that BoJ downgraded its growth outlook for fiscal 2025 and 2026, with both inflation and wage gains expected to “likely slow somewhat. However, he maintained that Japan’s “severe labour shortage” should keep the positive wage-inflation cycle intact over the medium term.

    Despite pushing back the timeline for inflation to converge with the 2% target, Ueda stressed “that doesn’t mean the timing of further rate hikes will automatically be delayed by the same margin.”

    Ueda emphasized that BoJ’s forecasts hinge on the assumption that trade negotiations will progress and avoid serious supply chain disruptions. However, he admitted that the probability of the baseline scenario being realized “is no longer very high.” Further tariff escalation could alter both the economic outlook and BoJ’s future policy stance.

    Japan’s PMI manufacturing finalized at 48.7, slump persists amid trade uncertainty

    Japan’s manufacturing sector remained in contractionary territory in April, with the final PMI reading at 48.7, up slightly from March’s 48.4. While the deterioration in business conditions marked the tenth consecutive month of decline, it remained modest.

    However, underlying components revealed more concerning trends, with sharper drops in new orders and exports, highlighting persistent demand-side weakness.

    According to S&P Global, firms responded by scaling back purchasing and adjusting inventories, while overall sentiment worsened.

    Business confidence around future output fell to its lowest since mid-2020, as companies expressed caution amid ongoing global trade tensions and muted demand. Without a significant turnaround in both domestic and external demand, “firms are likely to struggle to see a recovery in conditions”.

    USD/JPY Mid-Day Outlook

    Daily Pivots: (S1) 142.42; (P) 142.81; (R1) 143.45; More…

    Intraday bias in USD/JPY remains on the upside for the moment. Rebound from 139.87 should target 100% projection of 139.87 to 144.02 from 141.96 at 146.11. But still, near term outlook will stay bearish as long as 38.2% retracement of 158.86 to 139.87 at 147.12 holds. On the downside, firm break of 141.96 will argue that the rebound has completed as a corrective move. Retest of 139.87 should then be seen next in this case.

    In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    00:30 JPY Manufacturing PMI Apr F 48.7 48.5 48.5
    01:30 AUD Import Price Index Q/Q Q1 3.30% 0.30% 0.20%
    01:30 AUD Trade Balance (AUD) Mar 6.90B 3.10B 2.97B 2.85B
    03:03 JPY BoJ Interest Rate Decision 0.50% 0.50% 0.50%
    05:00 JPY Consumer Confidence Index Apr 31.2 34 34.1
    06:30 CHF Real Retail Sales Y/Y Mar 2.20% 1.90% 1.60% 1.20%
    08:30 GBP M4 Money Supply M/M Mar 0.30% 0.20% 0.20%
    08:30 GBP Mortgage Approvals Mar 64K 65K 65K
    08:30 GBP Manufacturing PMI Apr F 45.4 44 44
    11:30 USD Challenger Job Cuts Y/Y Apr 62.70% 204.80%
    12:30 USD Initial Jobless Claims (Apr 25) 241K 221K 222K 223K
    13:30 CAD Manufacturing PMI Apr 46.3
    13:45 USD Manufacturing PMI Apr F 50.7 50.7
    14:00 USD ISM Manufacturing PMI Apr 47.9 49
    14:00 USD ISM Manufacturing Prices Paid Apr 70.2 69.4
    14:00 USD ISM Manufacturing Employment Apr 44.7
    14:00 USD Construction Spending M/M Mar 0.30% 0.70%
    14:30 USD Natural Gas Storage 111B 88B

     



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  • Markets Pause After Relief Rally, Bessent Tempers De-escalation Optimism

    Markets Pause After Relief Rally, Bessent Tempers De-escalation Optimism


    Markets are treading water in the Asian session today, with most asset classes trading mixed and within familiar ranges. While US equities closed higher overnight, much of the early gains were pared back, signaling the fragility of the current risk-on mood. The price action reflects what is often seen during a relief rally—short-lived optimism that fades quickly if underlying uncertainty persists. Hopes of a breakthrough in US-China tariff talks briefly lifted sentiment, but optimism quickly met a dose of reality from Washington.

    US Treasury Secretary Scott Bessent pushed back against speculation that President Donald Trump had offered any unilateral gesture to ease tariffs on China. “No unilateral offer—none at all,” Bessent clarified. He acknowledged that current tariff levels are likely unsustainable but stressed that any reduction would have to be mutual. His remarks serve as a reminder that structural obstacles in the trade negotiations remain and that headline-driven rallies may lack staying power.

    In the currency markets, price actions are subdued, with all major pairs and crosses trading within yesterday’s ranges. Kiwi is leading gains for the week so far, followed by Dollar and Loonie. On the other side, the safe-haven trio in on the back foot, with Swiss Franc, Yen, and Euro the weakest performers, in line with stabilizing risk sentiment and a broader unwinding of prior defensive flows. Sterling and Aussie are middling.

    Technically, Gold’s breach of 3283.69 minor support indicates short term topping at 3499.79, just ahead of 3500 psychological level. Some consolidations should be seen in the near term, with risk of deeper pullback. But downside should be contained by 3167.62 cluster support (38.2% retracement of 2584.24 to 3499.79 at 3150.04 to bring rebound. Gold’s long term up trend is expected to continue after the consolidation completes.

    In Asia, at the time of writing, Nikkei is up 0.40%. Hong Kong HSI is down -1.08%. China Shanghai SSE is up 0.06%. Singapore Strait Times is up 0.26%. Japan 10-year JGB yield is up 0.001 at 1.325. Overnight, DOW rose 1.07%. S&P 500 rose 1.67%. NASDAQ rose 2.50%. 10-year yield fell -0.02 to 4.387.

    Looking ahead, German Ifo business climate is the main feature in European session. Later in the day, US will release jobless claims, durable goods orders, and existing home sales.

    IMF: BoJ may delay rate hike on tariff risk, cacks Yen’s haven role

    Nada Choueiri, deputy director of IMF’s Asia Pacific Department, told Reuters that BoJ is likely to delay further interest rate hikes as heightened uncertainty from US tariff policy weighs on business sentiment and economic outlook.

    She noted that many Japanese firms are now hesitant to move forward with investment plans, opting instead to wait for greater clarity on global trade developments. “This is postponing investment decisions as well,” Choueiri said, adding that the downside risks to both growth and inflation have increased.

    “We do see that if our reference scenario materializes, the BOJ interest rate increases will be pushed backwards in time,” she said.

    Choueiri also commented on the recent appreciation of Yen, reaffirming its role as a “safe-haven currency”, supported by the country’s economic stability and predictability.

    Fed’s Beige Book: Stagnant growth, tariff-driven inflation

    The latest Fed Beige Book painted a picture of a stagnating US economy, with activity described as “little changed” across most of the country. Of the 12 Districts, only five reported slight growth, while three saw flat conditions and the remaining four noted modest declines.

    However, the most striking theme running through the report was the “pervasive” uncertainty around international trade policy, which was highlighted in nearly all Districts as a key concern weighing on sentiment and business planning.

    Inflation pressures remain persistent, with half of the Districts describing price growth as moderate and the other half calling it modest. However, many businesses signaled “elevated input cost growth” tied to tariffs, with some already receiving notices from suppliers warning of upcoming price hikes.

    In response, firms have started add “tariff surcharge” or shortening their pricing terms. Still, the ability to fully pass on higher costs is proving difficult in some sectors, particularly for consumer-facing sectors where demand remains sluggish.

    ECB’s Lane sees Dollar outflows as rebalancing, not the end of dominance

    Speaking at an IIF conference overnight, ECB Chief Economist Philip Lane downplayed concerns over recent portfolio shifts away from US Dollar assets, suggesting the move may reflect a normalization rather than a structural retreat.

    Lane noted that allocations are likely moving from an overweight position in Dollar-denominated assets toward a more balanced distribution among global currencies.

    He pointed out that US assets had been “priced to perfection” following US President Donald Trump’s election last year, making some degree of reallocation expected as valuations adjust.

    Lane also addressed recent outflows from U.S. Treasuries, framing them as part of this rebalancing process. “It can either settle down or invite a deeper rethink,” he said, leaving the door open to further shifts depending on global investor sentiment.

    However, he admitted that despite the near-term adjustments, Dollar is still expected to far outweigh Euro in most global portfolios.

    ECB’s Knot and Muller downplay tariff impacts on inflation and growth

    Dutch ECB Governing Council member Klaas Knot noted that the combination of US tariffs, a stronger Euro, and falling energy prices could push eurozone inflation lower than expected in the short term.

    “The strong euro, together with falling energy prices, suggests that the near-term impact might not be so inflationary after all,” Knot said. However, he cautioned that medium-term risks remain, especially if global supply chain disruptions intensify. He supported keeping the ECB’s key policy rate within a neutral range of 1.75% to 2.25%, where it currently stands.

    Echoing a cautious but measured tone, Estonia’s ECB Governing Council member Madis Muller acknowledged that the US’s evolving trade policy creates “quite a bit more challenging” outlook for the Eurozone. Nevertheless, he maintained that moderate growth remains achievable, albeit at a slower pace than previously anticipated.

    Muller added that he is not forecasting a recession, noting that the impact of trade tensions, while significant, is unlikely to derail the region’s economic recovery entirely. Though, he emphasized the need for optionality, suggesting that more accommodation could be warranted if conditions deteriorate

    BoE’s Bailey: We must take tariff-related growth risks very seriously

    BoE Governor Andrew Bailey emphasized the growing downside risks to UK growth stemming from US President Donald Trump’s tariff policies. Speaking at an IIF conference, Bailey said, “We do have to take very seriously the risk to growth,” highlighting the UK’s vulnerability as a highly open economy.

    He noted that the impact of U.S. trade measures extends far beyond bilateral ties, influencing the UK through broader disruptions in global trade dynamics.

    When asked how much the BoE is factoring in the effects of US trade policy, Bailey confirmed that the issue is front and center. “We’re currently working through that because we’ve got an interest rate decision coming in two weeks’ time,” he said.

    USD/CAD Daily Outlook

    Daily Pivots: (S1) 1.3818; (P) 1.3861; (R1) 1.3925; More…

    A short term bottom should be in place at 1.3780, just ahead of 100% projection of 1.4791 to 1.4150 from 1.4414 at 1.3773, and on bullish convergence condition in 4H MACD. Intraday bias in USD/CAD is mildly on the upside for recovery. But upside should be limited by 1.4150 support turned resistance (38.2% retracement of 1.4791 to 1.3780 at 1.4166. On the downside, firm break of 1.3780 will resume the whole fall from 1.4791.

    In the bigger picture, the break of 1.3976 resistance turned support (2022 high) and 55 W EMA (now at 1.3982) indicates that a medium term top is already in place at 1.4791. Fall from there would either be a correction to rise from 1.2005, or trend reversal. In either case, firm break of 38.2% retracement of 1.2005 (2021 low) to 1.4791 at 1.3727 will pave the way back to 61.8% retracement at 1.3069.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    23:50 JPY Corporate Service Price Index Y/Y Mar 3.10% 3% 3% 3.20%
    08:00 EUR Germany IFO Business Climate Apr 85.2 86.7
    08:00 EUR Germany IFO Current Assessment Apr 85.5 85.7
    08:00 EUR Germany IFO Expectations Apr 85 87.7
    12:30 USD Initial Jobless Claims (Apr 18) 222K 215K
    12:30 USD Durable Goods Orders Mar 1.50% 1.00%
    12:30 USD Durable Goods Orders ex-Trans Mar 0.20% 0.70%
    14:00 USD Existing Home Sales Mar 4.14M 4.26M
    14:30 USD Natural Gas Storage 69B 16B

     



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  • Dollar Crushed as Dovish Inflation Data and Trade Tensions Weigh; Euro Surges to Multi-Year High

    Dollar Rout Deepens; Gold Charges Toward 3500, or Even 4000?


    The broad selloff in US assets resumed overnight as market confidence took another blow from escalating political pressure on Fed. Major US stock indexes ended the session deep in the red, while 10-year Treasury yields surged back above 4.4%. The Dollar Index also plunged to a fresh three-year low, continuing its dramatic collapse.

    The key catalyst: another public attack by US President Donald Trump, who took to Truth Social to call Fed Chair Jerome Powell a “major loser” and demanded that interest rates be cut “NOW” to avoid a economic slowdown. Trump’s renewed rhetoric has intensified concerns about Fed’s independence at a time of high uncertainty due to his own tariff policies.

    The central bank has so far resisted political pressure, and more Fed officials are set to speak today. Markets expect them to defend the institution’s autonomy and reaffirm their data-dependent approach. Given the current policy fog, particularly surrounding Trump’s shifting trade stance, officials are likely to emphasize the need for further clarity before making any policy adjustments.

    Meanwhile, the 90-day truce on Trump’s “reciprocal tariffs” continues with little meaningful progress in negotiations. Even talks with Japan, one of America’s closest allies, remain stalled. Japanese Prime Minister Shigeru Ishiba stated on Monday that substance matters more than speed in any trade agreement. Additionally, Ishiba vowing not to concede on core issues such as car safety standards and agricultural access. Finance Minister Katsunobu Kato is expected to travel to Washington later this week for discussions with US Treasury Secretary Scott Bessent, with currency issues on the agenda.

    Tensions with China continue to escalate. The Chinese Ministry of Commerce issued a sharp warning that Beijing will retaliate against any countries that cooperate with the US in ways that undermine China’s interests. China’s message reinforces the view that global trade friction is far from resolved, despite temporary pauses.

    Against this backdrop, Gold continues to surge as investors flee to safety. The precious metal’s record-breaking rally shows no signs of slowing, with momentum firmly in upside acceleration.

    Technically, further rise is expected as long as 3283.69 support holds. Next target is 100% projection of 1810.26 to 2789.92 from 2584.24 at 3563.90. Firm break there will pave the way to 138.2% projection at 3938.13, which is close to 4000 psychological level.

    Overall in the currency markets, Dollar is currently the worst performer by a mild, followed by Loonie and then Sterling. Yen is the strongest one, followed by Kiwi and then Euro. Swiss Franc and Aussie are positioning in the middle.

    In Asia, at the time of writing, Nikkei is down -0.07%. Hong Kong HSI is up 0.20%. China Shanghai SSE is up 0.38%. Singapore Strait Times is up 0.90%. Japan 10-year JGB yield is up 0.023 at 1.312. Overnight, DOW fell -2.48%. S&P 500 fell -2.36%. NASDAQ fell -2.55%. 10-year yield rose 0.072 to 4.405.

    Dollar Index crashes to 3-year low; 95 support holds long-term fate

    Dollar Index broke through an important support overnight as recent decline accelerated, and hit the lowest level in three years. The selloff reflects a deepening flight out of US assets, as confidence continues to erode. A major driver of the decline has been US President Donald Trump’s ongoing public attacks on Fed, which have increasingly undermined perceptions of central bank independence and rattled investor trust in US policy credibility.

    Technically, the break of 99.57 (2023 low) confirms resumption of the downtrend from 114.77 (2022 high). Near term outlook will now stay bearish as long as 100.27 resistance holds. Next target is 100% projection of 114.77 to 99.57 from 110.17 at 94.97.

    This support zone around 95 psychological level is especially significant, as it aligns with the long term rising channel support that dates back to 2011.

    Decisive break of 95 ahead could firstly trigger further medium term downside acceleration. More importantly, that could also mark the end of the broader uptrend that began from 2008 low at 70.69.

    Such a structural breakdown would open the door for sustained weakness with medium-term downside targets around the 89.20–90.00 range, with risk of entering a new secular downtrend in the years ahead.

    New Zealand posts surprise NZD 970m trade surplus as exports surge 19%

    New Zealand recorded stronger-than-expected trade surplus of NZD 970m in March, far exceeding forecasts of NZD 80m. The surprise was driven by a robust 19% yoy increase in goods exports, which rose by NZD 1.2B to NZD 7.6B. Imports also grew, up 12% yoy to NZD 6.6B.

    Export performance was particularly strong across key trading partners. Shipments to China rose by NZD 371m (23% yoy), while exports to the US and the EU grew by 22% yoy and 51% yoy respectively. Exports to Japan also increased 11% yoy, although shipments to Australia dipped slightly, down -0.47% yoy.

    On the import side, the largest increases came from the US, with a 48% yoy jump worth NZD 243m. This was followed by China and the EU, which posted 14% yoy and 19% yoy gains respectively. Imports from South Korea bucked the trend, falling -12% yoy.

    USD/JPY Daily Outlook

    Daily Pivots: (S1) 140.18; (P) 141.16; (R1) 141.85; More…

    Intraday bias in USD/JPY remains on the downside for the moment. Current fall from 158.86 is in progress for 139.57 support. Strong support could seen from 139.26 fibonacci level to bring rebound. On the upside, above 141.60 minor resistance will turn intraday bias neutral first. However, decisive break of 139.26 will carry larger bearish implications, and target 138.2% projection of 158.86 to 146.52 from 151.20 at 134.14.

    In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Trade Balance (NZD) Mar 970M 80M 510M 392M
    12:30 CAD Industrial Product Price M/M Mar 0.30% 0.40%
    12:30 CAD Raw Material Price Index M/M Mar 0.00% 0.30%
    14:00 EUR Eurozone Consumer Confidence Apr P -15 -15

     



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