Posted at 25 May 2020 / Categories Market Roundups
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• German GDP (YoY) (Q1) -1.9%,-1.9% forecast, -1.9% previous
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• German May Current Assessment 78.9, 80.0 forecast, 79.5 previous
• German May Business Expectations 80.1, 75.0 forecast, 69.4 previous
• German May Ifo Business Climate Index 79.5, 78.3 forecast, 74.3 previous
Looking Ahead Economic Data
• 13:00 French 12-Month BTF Auction -0.498% previous
• 13:00 French 6-Month BTF Auction -0.516% previous
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Looking Ahead - Events, Other Releases (GMT)
•17:30 Canada BoC Gov Poloz Speaks
EUR/USD: The euro edged higher against dollar on Monday as euro was lifted as after a survey showed German business morale rebounded in May, boosting optimism around economic re-openings. Lockdown measures introduced in mid-March have put the global economy on track for a recession this year. Only unprecedented stimulus by global central banks held up world markets in recent weeks. Its business climate index rose to 79.5 from a downwardly revised 74.2 in April, higher than a poll had forecast, and fueling optimism about the outlook of Europe’s biggest economy after a drop in the first quarter. Immediate resistance can be seen at 1.0963 (38.2% fib), an upside break can trigger rise towards 1.1011 (200 DMA).On the downside, immediate support is seen at 1.0868 (21 DMA), a break below could take the pair towards 1.0835 (23.6% fib).
GBP/USD: Sterling edged higher against the dollar on Monday as lockdown easing bolstered hopes for economic recovery, although simmering U.S.-China trade tensions limited the appetite for risk.Volumes were thin as the Eid al-Fitr religious festival and early summer public holidays closed many markets in Asia, Europe and the United States. Countries further relaxed restrictions they have enforced to curb the novel coronavirus, prompting investor hopes that recovering demand and activity will limit the extent of an expected deep recession. Immediate resistance can be seen at 1.2221 (21 DMA), an upside break can trigger rise towards 1.2278 (61.8% fib).On the downside, immediate support is seen at 1.2155 (50% fib), a break below could take the pair towards 1.2100 (Psychological level).
USD/CHF: The dollar strengthened against the Swiss franc on Monday as investors flocked to the shelter of of greenback on concerns about a growing standoff between the United States and China over civil liberties in Hong Kong. The greenback, which tends to behave like a safe-haven asset at times of market turmoil and political uncertainty, rose a fifth of a percent to 99.98 against its rivals, a one-week high. At ( GMT 12:00),greenback edged higher 0.14% versus the Swiss franc to 0.9722 Immediate resistance can be seen at 0.9737 (Daily high), an upside break can trigger rise towards 0.9783 (23.6% fib).On the downside, immediate support is seen at 0.9708 (38.2 % fib), a break below could take the pair towards 0.9694 (21 DMA).
USD/JPY: The dollar strenthed against the Japanese yen on Monday as lingering trade tensions between the United States and China increased demand for greenback. China’s proposed national security legislation for Hong Kong could lead to U.S. sanctions, White House National Security Adviser Robert O’Brien said on Sunday.U.S.-China tensions have risen in the past few weeks over the source of the novel coronavirus pandemic, which has infected more than 5.40 million people globally. Strong resistance can be seen at 107.77 (38.2% fib), an upside break can trigger rise towards 108.38 (100 DMA).On the downside, immediate support is seen at 107.06 (21 DMA), a break below could take the pair towards 106.50 (50% Fib).
European shares rose in thin trading on Monday, as optimism over reopening of countries and signs of more stimulus for the battered euro zone economy helped sentiment.
At (GMT 12:00),UK's benchmark FTSE 100 was last trading lower at 0.37 percent, Germany's Dax was up by 1.92 percent, France’s CAC was trading up by 1.28 percent.
Gold prices fell in holiday-thinned trade on Monday as the dollar strengthened and share markets rose, though lingering trade tensions between the United States and China limited losses for the safe-haven metal.
Spot gold was down 0.3% at $1,729.05 per ounce by 0924 GMT. U.S. gold futures fell 0.4% to $1,729.40. Most markets were closed in the United States, Britain and some countries in Asia for public holidays.
Oil prices eased on Monday on concerns over rising tensions between the United States and China over Beijing’s plans to impose security laws on Hong Kong and the possibility of sanctions from Washington.
Brent was down 19 cents, or 0.5%, at $34.94 a barrel by 0152 GMT. U.S. oil was down by 6 cents, or 0.2%, at $33.19 a barrel. Both contracts have risen for the past four weeks, although prices are still down around 45% so far this year.
Euro zone bond yields were steady on Monday, as the market overlooked a paper from Austria, Sweden, Denmark and the Netherlands opposing the EU’s planned grants-based recovery fund and awaited the European Commission’s own release later this week.
Bond yields in the bloc were relatively stable on Monday, with Italy’s 10-year yield at 1.60%, just off six-week lows hit on Friday, and safe-haven German 10-year yields were down 1 basis point at -0.50%.