Daily Forex and Markets Briefing |
Forex
The Euro (1.41) fell on Friday despite a better than expected EU GDP release (Q1 up 0.8% q/q, against expected +0.6%). A low of 1.4050 was seen so far today. USDJPY (80.97) fell to 80.34 on Friday, but rose through again. USDCHF (0.8926) rose from Friday's low of 0.8798. The Cable (1.6174) continues to lose and hit a low of 1.6146 on Friday. The Aussie (1.0552) has also lost ground, seeing a low of 1.0521 on Friday and 1.0525 so far today.
Overall, the Dollar Index (75.87) has done well all through last week and could strengthen a little more this week.
Markets
It was disappointing on Friday that the Dow (12595.75, -0.79%) was unable to build on its gains from Thursday. There is some hope for Bulls because there is support at 12545 is holding.
Things might turn pretty bearish if that breaks.
A-Pac indices are trade flat to negative today, ranging between +0.14% (New Zealand) and -1.05% (Australia). Nikkei (9,587.85) is down 0.63%. Korea (2108.85, -0.51%) continues to fall. The Shanghai (2874) is up a 0.11% as it has support close to 2825.
Commodities
Stronger Dollar is keeping the Commodities pressured towards the downside.
Crude (98.75), is struggling to see a strong close above 100 although an intraday break above 100 has been seen over the last few days. While below 100, the downside is open for a possible further fall towards 92 on a strong break/close below the 97-96 support region.
Gold (1490) has fallen below 1500 once again. 1480 is a very important support level and a break below it might pull the precious metal further down towards 1450 or even lower.
Silver (35.11) is not gaining upside momentum. Support is at 34.84 (21 Week MA) and a break below it might see 32-31. Only a strong break above 37 will ease the downside pressure.
Interest Rates
The 3M Libors remain stable apart from AUD LIBOR, which is up by 1 bps to 4.97. Stronger than expected Q1 GDP numbers from Germany and France on Friday may bolster the case for another interest rate hike. Contribution by the Eu’s two biggest economies has boosted the growth of the zone to 0.8% on QoQ against market expectation of 0.6%.
USD bonds yields were lower. The 2 yr dipped from 0.55% to 0.54%, 10 yr from 3.22% to 3.15%. However the 2 yr USD IRS has risen by 4bps to 0.64%, while the 10 yr has inched up from 3.19% to 3.20%. German yields fell 6 bps to 4.43% (5Y) and 3bps to 3.08%.
About the author: Ava FX Analysts Department
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