Macro Events & News

FX News Today

  • The stock sell off that was triggered by new US tariffs and China’s retaliation measures announced yesterday eased somewhat during the Asian session after some conciliatory comments from US President Trump and likely also thanks to suspected buying of state backed players in China.
  • The Yen declined after Trump said he will meet China’s Xi Jinping at next months G20 summit.
  • Topix and Nikkei are still down -0.70% and -0.81%.
  • The US Trade Representative’s office released a list of about USD 300 bln worth of Chinese goods that Trump also threatened to hit with a 25% tariff.
  • European futures are moving higher in tandem with US futures ahead of the opening.
  • The WTI future meanwhile is trading at USD 61.15 per barrel, up from an earlier low of USD 60.73.
  • German inflation lifted above 2% limit in April,largely thanks to higher energy prices, as well as the Easter effect.

Charts of the Day

Technician’s Corner

  • EURUSD eased from near 2-week highs of 1.1263, touching 1.1218 lows before steadying. EURUSD is back under its 50-day moving average of 1.1249. Continued uncertainty on the trade front, should keep risk-appetite contained, which could see the Dollar remain firm on a flight to safety trade.
  • USDJPY has dropped to 3-plus month lows of 109.09, falling 50 points. Safe-haven Yen buying ratcheted up quickly on the report, while severe risk-off conditions, seeing US equity futures plummet, and Treasury yields slide, has weighed heavily on the pairing. The January 31 low of 108.50 is the next support level.
  • USOIL has given back its earlier 2% gains, trading down at $61.20. Overnight gains came following attacks on two Saudi tankers near the Strait of Hormuz, though since then, the ramped up US/China trade war has spooked oil bulls. A slowing of the two-largest economies will likely result in crude demand destruction going forward. Friday’s $60.92 lows is next Support and $60.60 (last night’s low).

Main Macro Events Today

  • Average Earnings (GBP, GMT 08:30) – Average Earnings excluding bonus for March is expected to hold at 3.4%. The ILO unemployment rate (3-month) is expected to have remained at 3.9%.
  • ZEW Economic Sentiment (EUR, GMT 09:00) – Economic Sentiment for May is expected to decline to 1.0 compared to 4.5 last month.

Support and Resistance levels

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Andria Pichidi

Market Analyst

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