Market Roundup
- US Factory Orders MM Mar 2.1%, (consensus 2%, previuos -0.10%)
- US Nondef Cap Ex-Air R MM Mar 0.1%, (previuos -0.50%)
- BR HSBC Manufacturing PMI Apr 46, 46.2-prev; BCB poll sees +25 bp at next COPOM
- MX HSBC Manufacturing PMI Apr 53.8, (previuos 53.8)
- Argentina Apr tax revenues increase to 112.659 bln ars (consensus 118.70 bln ars, previuos 105.40 bln ars)
- Dollar rebound continues; sterling hedging cost soars ahead of UK election May 7
- IMF threatens to cut off Greek lifeline, unless European lenders write off significant amt of sov debt (FT)
- Fed’s Evans rate hike likely not appropriate until early ’16, inflation won’t reach 2% until ’18
- Fed’s Evans Q1 slowdown probably mostly transitory, would rather delay hikes until we know we can continue to raise rates once we start
- Fed’S Williams sees unemployment down to 5 percent or lower by the end of the year
- Moody’s says US growth likely to trend downward Long-Term, implying Long-Term rise in debt burden
- Moody’s says lower growth can support US’s current rating with stable outlook; will make rating more vulnerable to economic shocks,fiscal policy changes
Economic Data Ahead
- (1930 ET/ 2330 GMT) Australia AIG Services Index Apr (previuos 50.2)
- ( 2100 ET/ 0100 GMT) Australia HIA New Home Sales m/m Mar (previuos 1.10%)
- ( 2130 ET/ 0130 GMT) Australia Trade Balance G&S (A$) Mar (consensus -1000m, previuos -1256m)
- ( 2130 ET/ 0130 GMT) Australia Goods/Services Imports Mar (previuos 2.00%)
- ( 2130 ET/ 0130 GMT) Australia Goods/Services Exports Mar (previuos 1.00%)
Key Events Ahead
- (0030 ET/ 0430 GMT) Australia – RBA Cash Rate May (consensus 2%, previuos 2.25%)
FX Recap
GBP/USD unable to set short-term direction. The pair bottomed out at 1.5089 in the European session, but pared losses to climb back above the 1.51 mark during the American session. In the absence of economic news investors take a cautious stance ahead of the UK elections on Thursday and US nonfarm payrolls on Friday. Currently the pair is trading at 1.5125, down 0.15% on the day. Immediate supports are at 1.5089 (daily low), 1.5026 (Apr 24 low) and 1.5000 (psychological level). While resistances are at 1.5159 (100-day SMA), 1.5174 (daily high) and 1.5200 (psychological level). Option expiries for Tuesday 5 May: 1.5120 (1.36BLN), 1.5000 (1.5BLN), 1.4950 (450M), 1.4900 (744M)
EUR/USD is on track to post its second consecutive drop today. Euro remains mired in the negative territory and EUR/USD remains unable to gather further traction beyond 1.1150/60 so far. Positive surprise in today’s US Factory Orders has been limiting occasional recovery attempts. Markets to focus on the release of the Economic Growth Forecasts by the European Commission, ahead of US Markit’s Services PMI and the ISM Non-Manufacturing tomorrow. At the time of writing the pair is down 0.48% at 1.1146. Supports lie at 1.1123 (low May 4), 1.1072 (low Apr 30) and finally 1.0959 (low Apr 29). On the upside, resistances are at 1.1225 (high May 4) ahead of 1.1291 (high May 1) and then 1.1380 (high Feb 26). Option expiries for Tuesday 5 May: 1.1110 ( 240M)
USD/CAD: The initial upbeat tone in the US dollar after surprisingly good Factory Orders was shortlived. USD/CAD quickly pared gains and the pair fell to as low as 1.2090/85. Greenback is markedly lower vs. CAD at the end of the NA session, is now looking to stabilize in a narrow 1.2100-1.2120 range. Currently the pair is trading at 1.2112, down 0.37% on the day. Supports are seen at 1.2089 (low May 4) ahead of 1.2064 (low May 1) and finally 1.2000 (psychological level). On the flipside, resistances are at 1.2205 (high Apr 27), 1.2269 (high Apr 23) and then 1.2287 (high Apr 22). Option expiries for Tuesday 5 May: 1.1980 (200M), 1.2000 (200M)
NZD/USD is consolidating as we await key events to take hold this week. NewZealand unemployment rate is expected to drop from 5.7% to 5.5% with wage growth at a stand still at 0.5%. There are a number of releases from the US but the key will be the Nonfarm payrolls at the end of the week. The pair is currently trading at 0.7523 with a high of 0.7540 and a low of 0.7507. Option expiries for Tuesday 5 May: 0.7485 (283M)
EUR/GBP: GBP has under-performed versus most of its G-10 peers in the past week. EUR/GBP is moving sideways with 0.7350 as a base for the time being as UK elections leave plenty of uncertainty throughout. The pair is currently trading at 0.7368 with a high of 0.7402 and a low of 0.7351. Resistances are located at 0.7468, 0.7487 and then 0.7505. On the flipside supports are seen at 0.7346, 0.7328 and then 0.7309.
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