Market Roundup
- US data sideways, UST yields rise anyway, USD higher in thin May Day trading
- US Markit Mfg PMI Final Apr 54.1, (previous 54.2)
- US Construction Spending MM Mar -0.6%, (consensus 0.5%, previous 0.00%)
- US ISM Mfg Prices Paid Apr 40.5, (previous 39)
- US ISM Mfg Employment Idx Apr 48.3, (consensus 50.2, previous 50)
- US ISM Mfg New Orders Idx Apr 53.5, (previous 51.8)
- US U Mich Expectations Final Apr 88.8, (consensus 88.1, previous 88)
- Canada RBC Mfg PMI SA Apr 49, previous 48.9)
- United States Apr total vehicle sales decrease to 16.45 mln (fcast 16.90 mln) vs prev 17.15 mln
- Fed’s Mester all meetings on the table for initial US rate hike, recent econ weakness transitory
- Fed’s Mester : getting close to rate liftoff; data increasingly important
- Fed’s Mester : next two employment reports will be key to economic momentum, policy decision
- U.S. economy on track to grow 0.8 pct in q1 after surprise drop in construction spending in March, down from 0.9 pct Thursday-Atlanta Fed’s GDPnow model
- Fed’S Williams: Operational mandates for central banks ‘ineffective’, goal-based fed mandate is more promising
- Williams: Requiring Fed to operate under a policy rule could yield poor economic outcomes
Economic Data Ahead
- (2030 ET/ 0030 GMT) Australia TD-MI Inflation Gauge Apr (previous 0.40)
- (2130 ET/ 0130 GMT) Australia Building Approvals Mar (consensus -2%, previous -3.20%)
- (2130 ET/ 0130 GMT) Australia Private House Approvals Mar (previous -0.10%)
- (2130 ET/ 0130 GMT) Australia ANZ Newspaper Job Ads Apr (previous -3.60%)
- (2130 ET/ 0130 GMT) Australia ANZ Internet Job Ads Apr (previous -1.30%)
- (1930 ET/ 2330 GMT) Australia AIG Services Index Apr (previous 50.2)
- (2145 ET/ 0145 GMT) China HSBC Mfg PMI Final Apr (previous 49.2)
Key Events Ahead
- No Significant Events
FX Recap
EUR/USD: A wave of USD-buying keeps hurting the pair following the releases in the US economy. Euro accelerated downside towards the end of the week, rapidly dragging EUR/USD to session lows in the proximity of 1.1180. At the time of writing the pair is trading at 1.1185, with supports at 1.1125 (daily cloud top) and then 1.1072 (low Apr 30). Resistance on the upside is seen at 1.1291 (high May 1) followed by 1.1380 (high Feb 26) and then 1.1389 (high Feb 25). Option expiries Monday 4 May: 1.1100 (527M), 1.1225 (206M), 1.1400 (438M), 1.1425 (1.3BLN)
USD/JPY: The greenback is ending the week a little stronger, brushing itself off post the mix of data disappointments. USD/JPY is up in to the 120 handle, through the base of the cloud and resistance at 120.05 amongst market volatility. The pair is currently trading at 120.23 with a high of 120.29 and a low of 119.39. 122.20 could be the next bull target. Option expiries Monday 4 May: 119.80 (316M), 120.00 (577M), 120.25 (630M)
AUD/USD: Aussie is on the back foot with the prospects of the RBA’s action next week. AUD/USD bears have had a good run of the downside after taking advantage of levels on the 0.80 handle and lofty prices. The pair is currently trading at 0.7833 with a high of 0.7919 and a low of 0.7803. Key resistance lies at 0.8068, the 2010 low. Break could trigger a slide to the 55-day ma at 0.7752. Option expiries Monday 4 May: 0.7750 (407M), 0.7830 (416M).
USD/CAD hit its highest level in a week despite lackluster US data. The pair broke above the 1.2150 area and accelerated through 1.2200 to a peak of 1.2204 before finding resistance. USD/CAD pared some gains and was last trading at 1.2170, recording a 0.8% gain on the day. Option expiries Monday 4 May: 1.2100 (200M)
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