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  • Forex today came with a focus on the EZ GDP data which made for a subsequent drop in the DXY as the euro took up the baton, leading the FX space.

In the U.S. session, there was a dip in the  Chicago PMI which fell to a twenty-eight month low in Apr, 52.6, pointing to cooler manufacturing conditions in the Midwest.  The market paid particular attention to that ahead of today’s Markit and PMI manufacturing data.  

In other data, the outcomes were mixed but the contrast between the  Eurozone Q1 GDP that came in at +0.4%q/q, 1.2%y/y beating  +0.3%q/q and 1.1%y/y expectations,  along with  German April CPI headlined at 2.0%y/y against an average estimate of 1.5%y/y and a prior 1.3%y/y for March (harmonised 2.1%y/y, est. 1.7%y/y, prior 1.4%y/y), as well as with  Italy’s unemployment dropping 10.2% vs expectations of 10.7%, the  EUR climbed 50 pips and  the DXY was sent down 0.4% on the day.  

Currencies in action

  • USD/JPY fell from 111.60 to 111.25.  
  • GBP/USD fell from 1.3048 to 1.3024.
  • EUR/USD climbed from 1.1180 to 1.1229.
  • AUD was sideways between 0.7030 and 0.7060 in anticipation of the RBA next week and the possibility of a rate cut.
  • Joining that camp, the NZD rose initially from 0.6655 to 0.6685 prior to the NZD jobs data, of which disappointments sunk the Kiwi down to a low of 0.6627.  

Key notes from overnight:

  • NZ Q1 Labour market statistics are out, not so good employment rate (NZD/USD lower on dovish RBNZ expectations)

  • Wall Street ends modestly higher on last trading day of month; DJIA needs a breakout, eyes on 20-D SMA

  • US Dollar Index Technical Analysis: Is the DXY correction down over?

Key events ahead:

With the NZ jobs data out of the way, there is a quiet looking Asian session before a crowded U.S. calendar brings markets back to life.   Both the  Apr manufacturing ISM survey  and the FOMC meeting concluding will be sure to spark up an FX space frenzy ahead of the NFPs on Friday which will be preluded by the ADP report.