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The Asian equity markets rebounded alongside the recovery in risk sentiment amid easing concerns over Italian politics and US-China trade spat. Therefore, the safe-haven Yen ran into offers just ahead of the 108.50 barrier against its American rival, now sending USD/JPY back towards the 109 handle.

However, the Antipodeans failed to benefit from risk-recovery and upbeat Chinese manufacturing and services PMIs, as the Aussie was dumped after disappointing Australian private capital expenditure data for the first quarter 2018. Meanwhile, the Kiwi suffered losses following the release of dismal New Zealand’s ANZ business confidence figures. Both the Euro and GBP defended minor bids amid a broadly subdued US dollar, as the focus shifts back to fundamentals from politics, with the Eurozone flash CPIs in sight.

Main topics in Asia

US to impose steel tariffs on closest allies – Washington Post

As reported by the Washington Post, US  President Donald Trump  could be announcing as soon as Thursday plans to impose steel and aluminum tariffs on the US’ closest allies, including Canada, Mexico, and the European Union.                

China May official manufacturing PMI beats estimates

China’s official manufacturing Purchasing Managers’ Index (PMI) for May was 51.9.   Economists in a Reuters poll had called for a minor drop to 51.3 in May from 51.4 in April.                        

Morgan Stanley’s Gorman: Eurozone not in jeopardy

CEO of Morgan Stanley, James Gorman, during an interview on Bloomberg TV, gave some of his thoughts on the current state of affairs in Europe and across the globe.

Australia’s CAPEX: 2nd estimate for 2018/19 lower-than-expected

Australian capex (private capital expenditure) for Q1 shows a capex ‘headline’ of +0.4% q/q vs 0.7% expected and -0.2% last.  

World Bank: External risks for China have become ‘more prominent’

The World Bank is out with its latest China Economic Update on Thursday, with the key highlights found below.

UK consumer confidence rises to highest level in a year – Gfk

British consumer  sentiment  rose in May improved to -7 in May – the highest level since May 2017, beating the estimate of -8 and up from the previous month’s print of -9.

Asian equities rally back, Japan’s Nikkei 225 back over ¥22,100.00

Asia indexes are on the mend today after falling in Wednesday’s risk-off moves, with Japan’s Nikkei 225 index back above 22,100.00.

Iran seeks OPEC support against US sanctions – Reuters

Iranian  Oil  Minister Bijan Zanganeh urged the Organization of the Petroleum Exporting Countries (OPEC) to support Iran, the OPEC’s no. 3 oil producer, against the new US sanctions, in a letter seen by Reuters.

Key Focus ahead

After a busy Asian session, the traders gear up for the data showing in the European session, with the flash CPI estimate and unemployment rate from the Euroland to hog the limelight following the release of the Swiss retail sales and UK public finances data. Meanwhile, St. Louis Federal Reserve (Fed) President Bullard is due to speak at 1200 GMT.

In the NA session, the Canadian GDP numbers will be the key focus among a string of economic releases due out from the US docket that includes the core PCE price index, personal spending, unemployment claims and Chicago PMI. Also, of note remains the US weekly crude stockpiles report due to be published by the Energy Information Administration (EIA) at 1500 GMT.

Among the central bankers’ speeches, the Bank of Canada (BOC) Governing Council member Leduc will speak at 1620 GMT while the Fed officials Bostic and Brainard will deliver their speeches at 1645 GMT and 1700 GMT respectively.

EUR/USD: Puts gain value despite the corrective rally, eyes Eurozone CPI

Despite the technical recovery, the options market remains bearish on the EUR.  That said, the common currency could pick up a strong bid if the preliminary Eurozone May CPI, due today at 09:00 GMT, betters estimates.

GBP/USD grasping at 1.33 as technicals still lean bearish

Thursday brings a smattering of data for the UK, kicking off with the Nationwide Housing Prices measure for the month of May dropping at 06:00 GMT, with the y/y figure expected to tick up slightly from 2.6% to 3.0%.  

How to trade the Euro-zone inflation with EUR/USD

Maintaining price stability is the single mandate of the ECB and thus has a significant impact on the Euro. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.

How to trade the Canadian GDP with USD/CAD

The GDP report provides a broad overview of the economy and impacts the  Canadian Dollar.  The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.

Keu Events ahead