Jun 1 • Morning Roll Call • 1668 Views • Comments Off on MORNING ROLL CALL

Gold rises, oil slumps, USA equities end the month up approx. 1%, U.S. Dollar slides, whilst euro makes gains versus peers

As institutional traders closed their books for the month, the SPX weighed in with 1.2% growth in May, closing down 0.05%, with the DJIA down 0.10%. There was little in the way of high impact calendar events in the USA; mortgage applications fell by -3.4% over the last week, pending home sales fell by -1.3% in April, below the forecast of a 0.5% rise and the Chicago purchasing managers’ index came in at 55.2, missing the forecast of 57.

The U.S. Dollar closed the month out with its third losing month in series, yen made gains versus the dollar for the fourth day, USD/JPY closing out at 110.80, down circa 0.2%. Yen enjoyed a positive day versus many of its Southern Hemisphere currency peers. The U.S. Dollar also fell versus euro and sterling; EUR/USD closing up circa 0.4% at 1.1241, GBP/USD up circa 0.2% at 1.2874, reverting from the high of 1.2894 during the session. Polls moving in favour of the UK’s incumbent govt helped sterling rise versus its peers, as opposed to any supportive, fundamental economic news. The dollar index ended the month of May down 1.5%, the biggest fall experienced since January.

From Canada the Q1 2017 GDP data came in below expectation at 3.7% annual growth, economists’ polled expected to see 4.2% growth. As a consequence the Loonie (the Canadian dollar) was hit by both sides, as (combined with the poor GDP data), its direct positive correlation as a commodity currency, caused it to fall sharply in unison with the price of oil. USD/CAD closed out at 1.3492, GBP/CAD breaching R2 to end the day close to 1.8387, whilst EUR/CAD finished the day’s trading sessions at circa 1.5170, also breaching R2. Oil slumped by circa 2.7% to end the day at $48.5 per barrel, whilst gold rose to $1268 per ounce, up circa 0.3% on the day.

European economic calendar news was equally divided between the UK and mainland Europe on Wednesday; Germany’s retail sales (YoY) missed expectations of a 2.2% rise, coming in at 0.9% annual growth. German unemployment fell to a recent low of 5.7%, whilst Eurozone CPI came in at 1.4% annually, below forecast of 1.5%, suggesting that inflation is under control, albeit it’s missing the ECB’s growth target of 2%, which may cause the ECB to continue with its monetary easing programme. European unemployment came in at 9.3%, beating the forecast of 9.4%. Euro STOXX 50 closed the day down 0.19%, CAC down 0.42%, DAX up 0.13% and the UK’s FTSE down 0.09%.

Economic calendar events for June 1st, all times quoted are London (GMT) time.

08:00, currency impacted EUR. Italian Gross Domestic Product s.a. and w.d.a. (YoY) (1Q F). The expectation is for the YoY figure to come in at 0.8%.

08:30, currency impacted GBP. Markit UK PMI Manufacturing SA (MAY). The prediction is for a reading of 56.5, a fall from the previous reading of 57.3.

12:15, currency impacted USD. ADP Employment Change (MAY). Employment according to ADP is forecast to have risen to 180k, from the previous reading of 177k.

12:30, currency impacted USD. Initial Jobless Claims (27 MAY). Weekly claims are predcited to rise to 238k, from 234k last week.

13:30, currency impacted CAD. Markit Canada Manufacturing PMI (MAY). The PMI is forecast to be similar to the previous reading of 55.9.

14:00, currency impacted USD. ISM Manufacturing (MAY). The prediction is for a fall to 54.6, from 54.8 previously.

14:00, currency impacted USD. Construction Spending (MoM) (APR). Construction spending is forecast to rise by 0.5%, from -0.2% in March.

15:00, currency impacted USD DOE U.S. Crude Oil Inventories (26 MAY). The forecast is for a fall to -3016.67k, from -4432k last week.

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