Market Brief
NZD/USD got hammered last night after the release of softer-than-expected labour data. In the first quarter, unemployment rate increased to 5.8% verse 5.5% expected (prior read revised up by 0.1% to 5.8%). As a result, the Kiwi drop instantaneously by more than 60pips and is currently consolidating around 0.7478 since then. In Australia, March retails sales came in below expectation at 0.3%m/m verse 0.4%. However, RBA’s less dovish statement has triggered a rally and bulls are not ready to surrender yet. The Aussie recovers from last week’s sharp sell-off and is on its way to test the strong resistance from January lying at 0.8026. On the downside, the pair will find some support around 0.78 (Fib 50% on April 2nd-29th sell-off and psychological level). We remains Aussie bulls as we expect Australia’s economy to expand faster, driven by China’s recovery.
On the other hand, it was a rough session for Australian equities. S&P/ASX retreated -2.19% to 5,698. While Chinese equities rebounded after yesterday’s sell-off. Shanghai Composite is up 1.24%, Hong Kong’s Hang Seng gained 0.60%. In India, the Sensex is down -2% to 26,888, April HSBC Composite PMI fell to 52.5 from 53.2 in March. USD/INR rose to 63.62, approaching the key resistance at 63.90 (high from November 2013).
In China, April composite PMI fell 0.5 points to 51.3, 51.8 prior read while service PMI surprised the market on the upside as the index came in at 52.9 verse 52.3 expected.
Despite the Golden Week and thin trading conditions, USD/JPY was on sell yesterday and fell to 119.87, slightly above the 119.74 support (Fib 38.2% on March 10th-26th sell-off). Lower, the dollar should find some support around 118.50 (multi lows).
In the US, the S&P 500 suffered a loss in New York and retreated 1.18% or 23 points, down to 2,089. This morning, S&P futures are blinking green on the screen, up by 0.18%. Nasdaq lost 1.55%, small and mid-caps paired losses as the Russell 2000 dropped 1.44% while in Canada S&P/TSX is down 1.26%. EUR/USD appreciated consistently in the Asian session and is back at 1.1247, ready to test the high from last Friday standing at 1.1290. On the downside, a support stands around 1.1043 (March highs, now a support).
Crude oil seems unstoppable, WTI appreciated to $61.28 a barrel while its North Sea counterpart is trading higher at $68.27 as Saudi Arabia, the world’s largest crude exporter, raised its official selling prices to European and US refineries.
While awaiting NFP on Friday, ADP Employment is due today and is expected at 200K after the disappointing 189K in March. Fed Yellen will speak today with IMF Lagarde. In the Euro Area, traders will watch April PMI from France, Germany, Spain, Italy and Eurozone aggregate; Eurozone retail sales; UK services PMI. In Brazil, March industrial production is expected to have contracted by 3%y/y (-9.1% prior read) while HSBC Composite and Service PMI are also due.
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Today's CalendarEstimatesPreviousCountry / GMT SP Apr Markit Spain Services PMI 57.4 57.3 EUR / 07:15 SP Apr Markit Spain Composite PMI - 56.9 EUR / 07:15 SA Apr HSBC South Africa PMI - 51.6 ZAR / 07:15 IT Apr Markit/ADACI Italy Services PMI 52 51.6 EUR / 07:45 IT Apr Markit/ADACI Italy Composite PMI 52.7 52.4 EUR / 07:45 FR Apr F Markit France Services PMI 50.8 50.8 EUR / 07:50 FR Apr F Markit France Composite PMI 50.4 50.2 EUR / 07:50 GE Apr F Markit Germany Services PMI 54.4 54.4 EUR / 07:55 GE Apr F Markit/BME Germany Composite PMI 54.2 54.2 EUR / 07:55 EC Apr F Markit Eurozone Services PMI 53.7 53.7 EUR / 08:00 EC Apr F Markit Eurozone Composite PMI 53.5 53.5 EUR / 08:00 UK Apr Official Reserves Changes - -$924M GBP / 08:30 UK Apr Markit/CIPS UK Services PMI 58.5 58.9 GBP / 08:30 UK Apr Markit/CIPS UK Composite PMI 58.1 58.8 GBP / 08:30 EC Mar Retail Sales MoM -0.70% -0.20% EUR / 09:00 EC Mar Retail Sales YoY 2.40% 3.00% EUR / 09:00 NO Norway April House Prices Released by Real Estate Norway - - NOK / 09:00 SA 1Q BER Consumer Confidence -1 0 ZAR / 10:00 US May 1 MBA Mortgage Applications - -2.30% USD / 11:00 BZ Mar Industrial Production MoM -0.70% -0.90% BRL / 12:00 BZ Mar Industrial Production YoY -3.00% -9.10% BRL / 12:00 US Apr ADP Employment Change 200K 189K USD / 12:15 US 1Q P Nonfarm Productivity -1.90% -2.20% USD / 12:30 US 1Q P Unit Labor Costs 4.50% 4.10% USD / 12:30 BZ Apr HSBC Brazil Composite PMI - 47 BRL / 13:00 BZ Apr HSBC Brazil Services PMI - 47.9 BRL / 13:00 US 1Q MBA Mortgage Foreclosures - 2.27% USD / 14:00 US 1Q Mortgage Delinquencies - 5.68% USD / 14:00 CA Apr Ivey Purchasing Managers Index SA 49.2 47.9 CAD / 14:00 BZ Currency Flows Weekly - - BRL / 15:30 BZ Apr Commodity Price Index MoM -2.00% 7.88% BRL / 15:30 BZ Apr Commodity Price Index YoY - 5.69% BRL / 15:30 UK Apr Halifax House Prices MoM 0.30% 0.40% GBP / 22:00 UK Apr Halifax House Price 3Mths/Year 7.80% 8.10% GBP / 22:00 AU 4Q CBA/HIA House Affordability - 96.2 AUD / 22:00
Currency Tech
EUR/USD
R 2: 1.1529
R 1: 1.1290
CURRENT: 1.1251
S 1: 1.1111
S 2: 1.1000
GBP/USD
R 2: 1.5498
R 1: 1.5287
CURRENT: 1.5231
S 1: 1.5156
S 2: 1.5051
USD/JPY
R 2: 122.03
R 1: 120.10
CURRENT: 119.72
S 1: 118.91
S 2: 117.94
USD/CHF
R 2: 1.0240
R 1: 0.9571
CURRENT: 0.9228
S 1: 0.9157
S 2: 0.8823