FX News Today
Treasury yields dipped -1.4 bp overnight, JGB rates are down -0.5 bp as bond markets continue to rally amid the escalating US-Sino trade spat that saw Trump targeting Chinese telecom companies.
Reports that the US President will hold off on auto tariffs for now helped European bourses to stage a late rally Wednesday.
The US President signed an order that is expected to restrict the likes of Huawei and ZTE Corp from selling their equipment to the US. Huawei was also put on a blacklist that could forbid it from doing business with American companies and require US companies to obtain a special licence to sell products to the company, which if enforced strictly could halt even everyday operations at the Chinese company.
The US and European stock futures are under pressure ahead of the official open.
US-Sino trade tensions aside Brexit developments and Italian budget jitters remain in focus amid a pretty quiet local calendar that focuses on Eurozone trade numbers as well as the final reading of Italian HICP inflation.
The unexpected pick up in Australian unemployment fuelled speculation of a rate cut from the RBA.
The front end WTI future is trading at $62.40 per barrel.
Charts of the Day
Technician’s Corner
EURUSD found Resistance at 1.1217 level for 2 consecutive days. The pair has mostly been stuck between its 20-day moving average at 1.1200 and its 50-day moving average at 1.1245 since the start of the week. A close above or below these levels may help determine direction for the remainder of the week.
GBPUSD has extended losses which s now in its 9th consecutive down day, after it broke yesterday April’s lows. Next support for the asset is coming at January’s low Resistance at 1.2772.
Main Macro Events Today
Housing Data (USD, GMT 12:30) – Both Building Permits and Housing Starts should jump in April, to a 1.215 mln pace and to 1.298 mln respectively, after a 0.3% and 0.2% decline seen in March. Overall, a stronger trajectory is expected for starts with a positive but slower pace for permits.
Support and Resistance levels
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GBP/USD struggles to hold above 1.2500 ahead of Thursday's BoE event
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Gold fluctuates in narrow range above $2,300
Gold struggles to make a decisive move in either direction and moves sideways in a narrow channel above $2,300. The benchmark 10-year US Treasury bond yield clings to modest gains near 4.5% and limits XAU/USD's upside.
SEC vs. Ripple lawsuit sees redacted filing go public, XRP dips to $0.51
Ripple (XRP) dipped to $0.51 low on Wednesday, erasing its gains from earlier this week. The Securities and Exchange Commission (SEC) filing is now public, in its redacted version.
Softer growth, cooler inflation and rate cuts remain on the horizon
Economic growth in the US appears to be in solid shape. Although real GDP growth came in well below consensus expectations, the headline miss was mostly the result of larger-than-anticipated drags from trade and inventories.