MORNING ROLL CALL

May 9 • Morning Roll Call • 61 Views • No Comments

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Euro falls, despite Macron’s presidential victory, USA equities end the day flat, gold falls through the daily 200 SMA.between-the-lines1

The relief rally in the euro (due to Macron’s victory in the French presidential election) immediately the FX markets opened on Sunday evening, was short lived and reverted suddenly once the Asian markets opened. Perhaps realism began to grip the markets; Macron still has to build a government, the parliamentary elections in France come soon and with initial five parties’ candidates all gaining approximately 20% of the votes in the first round of the presidential election, a consensus to ultimately govern, will be difficult to muster.

EUR/USD ended the day at circa 1.0923, down approx. 0.6% on the day, after enjoying an opening gain of 0.2%. The euro fell versus the majority of its other peers, with the exception of yen and the Swissie, EUR/CHF and USD/CHF made significant gains throughout the day, with USD/CHF closing the day out at circa 0.997, up circa 0.7%.

Chinese data published early Monday morning proved disappointing, with the exception of foreign reserves which grew modestly; exports fell to 8.0% growth YoY in April, from a 16.4% reading recorded in March, whilst imports also fell sharply, down from 20.3% growth in March, to 11.9% in April. This dramatic reduction in trading volume was partially offset by the encouraging news regarding April’s trade balance, beating expectations by improving to €38.05b for April.

At 1.0% growth for April, Germany’s factory orders came in ahead of forecasts, the 2.2% growth annually also beat the forecast. Halifax house price data for the UK revealed a -0.1% fall in April, with annual prices also moderating. London is experiencing both house price and rental falls, a welcome relief for renters, currently paying circa 65% of their disposable income each month on rent. Europe’s Sentix index beat expectations; coming in at 27.4, versus the consensus forecast of 25.

In earlier housing news relating to Australia, building approvals (month on month) shocked the market by coming in down -13.4%, missing the forecast of -4% by some distance. The effect on the Aussie versus its peers was muted, given that ‘soft data’ such as: business confidence and a business survey, both conducted by the NAB in Australia, came in improved on March’s readings and significantly ahead of forecasts. The main Australian market, the ASX 200, closed up 0.59%, with AUD/USD down circa 0.5% on the day, at 0.738.

North American high impact economic calendar news was thin on the ground during Monday’s trading sessions, Canada’s housing starts beating expectations was the only highlight; the annual rate of building is currently 214k, ahead of the prediction of 210k, but a significant fall from the previous reading of 253k, registered in March.

USA equity markets ended Monday close to flat; DJIA up 0.03% and the SPX at 0.00%, the volatility index closing at a recent low, a level not witnessed since 1993. In Europe the main markets sold off, with the main French market down sharply; France’s CAC closed down 0.91%, DAX down 0.18%, STOXX 50 down 0.46%, IBEX down 0.35%. The UK’s FTSE closed up 0.05%.

Gold breached its 200 SMA during early trading, briefly taking out the $1220 per ounce level, ending the day at circa $1225 per ounce, down approx. 0.2% on the day. WTI oil ended the day close to flat at $46.28 per barrel.

Sterling has gained approx. 3% versus the US dollar since prime minister May announced the UK’s June 8th general election; GPB/USD ended the day down 0.3% at circa 1.293. Versus the euro sterling gained, EUR/GBP down 0.4% at 84.45.

Economic calendar news for May 9th, all times quoted are London GMT time.

05:45, currency impacted CHF. Unemployment Rate (APR). Swiss unemployment is forecast to have fallen to 3.3%, from 3.4% previously.

06:00, currency impacted EUR. German Industrial Production n.s.a. and w.d.a. (YoY). Production is expected to have risen to 2.6%, from 2.5% previously.

06:00, currency impacted EUR. German Trade Balance (euros) (MAR). Germany’s positive trade balance for March is predicted to have improved to 21.5b, from 19.9b in Feb.

06:00, currency impacted EUR. German Exports s.a. (MoM) (MAR). Germany is the exporting heart and heartbeat of the Eurozone, analysts will be monitoring this export metric carefully, given that it’s forecast to fall to 0.2%, from the 0.8% reading recorded in Feb.

06:00, currency impacted EUR. German Imports s.a. (MoM) (MAR). Imports are forecast to have recovered to 1.6%, from the -1.6% reading registered in Feb.

14:00, currency impacted USD. Wholesale Inventories (MAR F). Wholesale inventories in the USA are expected to show a -0.1% fall, the same fall/reading registered in Feb.

 

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