May 31 • Morning Roll Call • 1951 Views • Comments Off on MORNING ROLL CALL

U.S.Dollar comes under pressure versus its major peers, SPX reverses seven day advance, gold falls, Eurozone confidence slips

New York, London and Shanghai equity markets were closed on Monday for a bank holiday, economic calendar news was equally distributed between the Eurozone and the USA on Tuesday, as markets roared back into life.

European news began with Germany’s import prices, up 6.1%, matching the YoY figure published in March, suggesting stability; in terms of manufacturing costs for the Eurozone’s engine of growth. Germany’s CPI slipped to 1.5% YoY, whilst the monthly figure came in at -0.2%. French GDP for Q1 2017 beat expectations; coming in at 0.4%, versus the 0.3% growth forecast. The various confidence readings pertaining to the Eurozone, generally missed the forecasts, with the exception of the consumer confidence reading, which came in at -3.3, matching the economists’ polled forecast.

Overall the trading mood in Europe appeared to be subdued, with elections looming in the UK, Germany and Italy, there is uncertainty stalking the markets impacting longer term investor decisions, whilst the UK’s prime minister (whoever the electorate chooses), will have to begin negotiations over Brexit, shortly after the result of the June 8th election. Euro STOXX ended the day down 0.50%, UK’s FTSE down 0.28%, CAC down 0.50%, DAX down 0.24%. The euro gained versus many peers in the New York session; EUR/USD ending the day at 11.89, up circa 0.2%. Sterling mainly appreciated throughout the two distinct trading sessions versus its various peers with the exception of the euro, whilst certain sterling currency pairs endured whipsaws; GBP/USD closing out the day up 0.4%, resting on R1 at 1.2857, after initially breaching S1, shortly after the FX markets opened. EUR/GBP rose during the day, ending at circa 0.8723.

Turning to the USA’s economic calendar events, the various consumer personal expenditure and income readings came in as forecast, with personal consumption expenditure (core), coming in at 1.5% growth YoY. The respected Case Shiller house price index revealed that USA house prices have grown by 5.89% YoY, as house prices in the country have now reached all time record highs. The Dallas Fed manufacturing index came in ahead of forecasts, at 17.2 for May. Despite the relatively bullish domestic news, the main indices sold off; DJIA closing down 0.24%, SPX down 0.12% and NASDAQ down 0.11%, on which Amazon reached $1,000 a share, meaning that the founder Jeff Bezos has added $19b to his personal fortune this year. USD/JPY ended the day close to 110.83, down circa 0.4%, the currency pair had risen above the 200d SMA during last week’s trading, but has now fallen back through this key moving average.

Gold fell to $1262 per ounce, down circa 0.5%, the first loss registered in three days. WTI oil price slipped marginally to $49.66, resting precipitously on the 200d SMA, investors were pricing in the failure of OPEC and various oil production peers, to agree deeper supply cuts during their various meetings last week.

Economic calendar events for May 31st, all times quoted are London (GMT) time

06:00, currency impacted EUR. German Retail Sales (YoY) (APR). The forecast is for sales to fall to 2.2%, from the previous reading of 2.3%.

07:55, currency impacted EUR. German Unemployment Rate (MAY). Germany’s key unemployment rate is expected to fall to 5.7%, from the 5.8% reading recorded in April.

08:30, currency impacted GBP. Net Consumer Credit (APR). Lending is predicted to have fallen to 1.5b, from 1.6b in March.

09:00, currency impacted EUR. Euro-Zone Unemployment Rate (APR). Unemployment in the single bloc zone is forecast to have fallen to 9.4%, from the previous 9.5% reading.

09:00, currency impacted EUR. Euro-Zone Consumer Price Index Estimate (YoY) (MAY). CPI is expected to have moderated to 1.5%, from 1.9% previously.

12:30, currency impacted CAD. Quarterly Gross Domestic Product annualised (1Q). Canada’s GDP is forecast to have risen sharply to 4.3%, from 2.6% in Q4 2016.

14:00, currency impacted USD. Pending Home Sales (MoM) (APR). Home sales are predicted to have risen by 0.6%, from the surprise fall of -0.8%, registered in March.


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