Global Markets:
- Asian stock markets: Nikkei up 0.45 %, Shanghai Composite fell 0.25 %, Hang Seng rallied 0.90 %, ASX 200 rose 0.80 %
- Commodities: Gold at $1252 (-0.10 %), Silver at $16.88 (+0.50 %), WTI Oil at $51.20 (+1.00 %), Brent Oil at $54.10 (+0.90 %)
- Rates: US 10-year yield at 2.25, UK 10-year yield at 1.10, German 10-year yield at 0.36
News & Data:
- UK Rightmove House Prices (MoM) May: 1.2% (prev 1.1%)
- UK Rightmove House Prices (YoY) May: 3.0% (exp 2.0%; prev 2.2%)
- Japan Trade Balance (JPY) Apr: 481.7B (exp 520.7B; rev prev 614.0B)
- Japan Trade Balance Adjusted (JPY) Apr: 97.6B (exp 259.6B; prev 172.2B)
- Japan Exports (YoY) Apr: 7.5% (exp 8.0%; prev 12.0%)
- Japan Imports (YoY) Apr: 15.1% (exp 14.8%; prev 15.8%)
- PBoC Fixes USDCNY Reference Rate At 6.8673 (prev fix 6.8937 prev close 6.8870)
- Asian stocks post biggest rise in a month; dollar weak – RTRS
- Oil rises on expectation of extended, possibly deepened output cut – RTRS
- Dollar hovers near six-month lows amid U.S. political uncertainty – RTRS
CFTC Positioning Data:
- EUR long 37K vs 22K short last week
- GBP short 33K vs 47K short last week
- JPY short 60K vs 36K short last week
- CHF short 21K vs 15K short last week
- CAD short 98K vs 86K short last week
- AUD long 6K vs 26K long last week
- NZD short 12K vs 11K short last week
Markets Update:
Risk appetite improved in Asia, with most stock markets up on the day. Oil prices extended gains as well, which brought the US Dollar additionally under pressure. Meanwhile, Gold fell slightly as the demand for safe havens declined.
EUR/USD started the trading day around 1.1205, unchanged from Friday. During the Asian trading session, it fell to a low of 1.1180 before bouncing back to 1.1195. The Euro looks somewhat overbought in the near-term, and a correction seems likely. Support is seen at 1.1170 and 1.1120.
GBP/USD opened slightly lower in Asia and fell to 1.2970. However, the pair recovered quickly and is back above 1.30. The technical outlook remains positive, and following the break above 1.30 resistance, a rally towards 1.31 seems likely.
USD/JPY should benefit from the improved risk appetite. If the pair can take out resistance at 111.70, a rally towards 112.50 seems likely.
AUD/USD is still struggling with resistance at 0.7450 and 0.7470. Heavy resistance is then seen again at 0.7550. The short-term outlook is mixed.
Upcoming Events:
- 15:00 BST – FOMC Member Harker speaks
- 15:30 BST – FOMC Member Kashkari speaks
- 18:30 BST – RBA Assistant Governor Debelle speaks
The Week Ahead:
Tuesday, May 23rd
- 07:00 BST – Swiss Trade Balance
- 07:00 BST – German GDP
- 08:00 BST – French Manufacturing PMI
- 08:00 BST – French Services PMI
- 08:30 BST – German Manufacturing PMI
- 08:30 BST – German Services PMI
- 09:00 BST – Euro Zone Manufacturing PMI
- 09:00 BST – Euro Zone Services PMI
- 09:00 BST – German IFO Business Expectations
- 09:00 BST – German IFO Current Assessment
- 09:00 BST – German IFO Business Climate
- 10:00 BST – UK Inflation Report Hearings
- 14:45 BTS – US Services PMI
- 14:45 BST – US Manufacturing PMI
- 15:00 BST – US New Home Sales
- 15:00 BST – US Richmond Manufacturing Index
- 20:15 BST – FOMC Member Kashkari speaks
- 22:00 BST – FOMC Member Harker speaks
Wednesday, May 24th
- 01:30 BST – Australian Leading Index
- 09:30 BST – ECB Member Praet speaks
- 13:45 BST – ECB President Draghi speaks
- 15:00 BST – US Existing Home Sales
- 15:00 BST – Bank of Canada Rate Decision
- 15:30 BST – US Crude Oil Inventories
- 19:00 BST – FOMC Meeting Minutes
Thursday, May 25th
- 09:00 BST – RBA Assistant Governor Debelle speaks
- 09:30 BST – UK GDP
- 13:30 BST – US Initial Jobless Claims
- 15:00 BST – FOMC Member Brainard speaks
- 18:00 BST – ECB Member Constancio speaks
Friday, May 26th
- 08:00 BST – ECB Member Coeure speaks
- 13:30 BST – US GDP
- 15:00 BST – US Michigan Consumer Sentiment
