Indices positive
Most stock market indices were higher at the start of trading this week while the US dollar consolidated Friday’s gains. US indices traded between 0.21% and 0.35% with the Hong Kong index outperforming, recouping more than Friday’s losses after Legislative Council leader Carrie Lam announced at the weekend that she was suspending efforts to pass the legislation and issued a formal apology to HongKongers. Press reported that about 2 million people took part in a peaceful protest that jammed road near government offices on Sunday.
US30USD Daily Chart
Source: OANDA fxTrade
PBOC liquidity trickles in
The second phase of recent Reserve Ratio Requirements cuts announce on May 6 came into effect today, releasing CNY100 billion into the banking system while in its daily open market operations it added a net CNY120 billion versus a CNY100 billion drain Friday. The weak industrial production data for May released Friday, where expansion slumped to a 17-year low, has kicked off renewed expectations of further easing from the PBOC. 10-year Chinese yields fell more than 3bps while the offshore yuan slid 0.02% to 6.9311.
India to levy tariffs
India has announced retaliatory tariffs on 28 US goods in response to US President Trump’s suspension of India’s status under the Generalized System of Preference trade program. The named goods include apples (worth about $156 million in 2018) and almonds worth about $543 million. This month the Indian rupee has declined 1.2% versus the US dollar since US President Trump announced the removal of preferential status would go ahead. The FX pair is now at 69.844.
USD/INR Daily Chart
Source: OANDA fxTrade
A slow start to the week
The data calendar has little to offer investors at the start of the week with the European session featuring only Euro-zone Q1 Labour costs and the monthly report from Germany’s Bundesbank. The North American session is also quiet with the NY Empire State manufacturing index and the NAHB Housing market index for June both due. For Canada, portfolio flows for April will be released.
No doubt the main event of the week will be the FOMC meeting from Tuesday to Wednesday. Market pricing is suggesting only an 18% probability of a 25bps cut at this week’s meeting, but expectations are building the comments and discussions will lead to a cut at the July meeting, with an 82% probability attached to that event.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.