Global Markets:
- Asian stock markets: Nikkei down 0.15 %, Shanghai Composite and ASX 200 gained 0.15 %, Hang Seng rose 0.10 %
- Commodities: Gold at $1260 (-0.20 %), Silver at $17.26 (-0.95 %), WTI Oil at $49.35 (-0.60 %), Brent Oil at $51.95 (-0.55 %)
- Rates: US 10 year yield at 2.22, UK 10 year yield at 0.99, German 10 year yield at 0.29
News & Data
- China Manufacturing PMI 51.2 vs 51.0 expected
- China Non-Manufacturing PMI 54.5 vs 54.0 previous
- Japan Industrial Production 4.0 % vs 4.3 % expected
- South Korea Retail Sales m/m 0.7 % vs -0.1 % previous
- South Korea Industrial Production m/m -2.2 % vs 0.8 expected
- South Korea Industrial Production y/y 1.7 % vs 5.0 % expected
- New Zealand ANZ Business Confidence 14.9 vs 11.0 previous
- Australia Private Sector Credit m/m 0.4 % vs 0.4 % expected
- Asia stocks rise as China factories see steady growth, sterling soft – RTRS
- China factory PMI growth holds up in May, steel sector activity speeds up – RTRS
- Oil falls as rising Libyan, U.S. output undermines cuts – RTRS
Markets Update:
The British Pound came under further pressure after polls showed that UK Prime Minister May’s lead is decreasing. GBP/USD was clearly rejected at 1.2880 resistance, and while 1.2775 support held, further losses seem likely in the near-term. The uncertainty around the UK election surprised the markets a bit, which were expecting that May's lead will continue to hold.
The Euro recovered slightly, but is struggling to gain momentum. Resistance is seen at 1.12 and 1.1230, while key support lies at 1.11. A break sub-1.11 would suggest losses could extend to 1.10 soon.
Traders are now looking forward to the Euro Zone inflation figures, which will be released this morning at 10:00 BST. There have speculations that the ECB might signal a shift in their monetary policy soon amid improving economic conditions. A higher than expected inflation print could further fuel that and boost the Euro.
USD/JPY bounced amid broad USD strength and a solid performance of global equity markets. However, the pair will need a clear break above 112 to gather some momentum.
Upcoming Events:
- 07:00 BST – German Retail Sales
- 07:45 BST – French CPI
- 08:55 BST – German Unemployment Rate
- 10:00 BST – Euro Zone CPI
- 10:00 BST – Euro Zone Unemployment Rate
- 13:30 BST – Canadian GDP
- 14:45 BST – US Chicago PMI
- 15:00 BST – US Pending Home Sales
