Despite moderate risk-on action in the Asian equities and US equity futures, disappointing macro releases from Australia as well as from China dampened the sentiment around the Antipodeans and capped the bounce in the USD/JPY pair at the key resistance near 109.70 levels. The AUD/USD pair dropped further to fresh 4.5 month lows of 0.6923 while the Kiwi hit fresh weekly lows near 0.6560.
The resource—linked Loonie remained trapped in a narrow range near 1.3465 region, unfazed by weaker oil prices. Meanwhile, gold prices traded modestly flat around the 1295 level amid upbeat comments from the US President Trump and his Chinese counterpart Xi on trade.
Amongst the European currencies, the EUR/USD pair kept minor bids above the 1.12 handle while the Cable recovered above the 1.2900 level amid the renewed Brexit optimism.
Main Topics in Asia
US-China trade updates
China to reduce its dependence on US energy exports - China’s Global Times
US Pres. Trump to sign order restricting foreign telecom companies this Wednesday
China’s Pres. Xi calls on nations to promote openness and trade
Sources: China scrapped 30% of draft trade deal - Nikkei
Other Headlines
US Sec. of State Pompeo: US does not seek war with Iran – BBC
Europe can still buy Iran’s Oil - Iranian official
Fed’s Daly: Goal is to create inclusive growth that can expand potential employment in the future
Australia Westpac consumer sentiment steady for the month – Full Report
Australia’s key wages measure is out, softer than expected by 0.1% Q/Q
Japan Finance Minister Aso: Chinese slowdown clearly affecting weaker export data
China April data disappoint: Retail sales rise 7.2%, industrial output arrives at 5.4%
BOJ’s Kuroda: Not considering additional easing right now
Asian stocks report gains despite dismal China data
Key Focus Ahead
Markets buckle up for the preliminary GDP figures from Germany and Eurozone slated for release at 0600 GMT and 0900 GMT. The growth figures are likely to have a strong bearing on the EUR markets amid looming Euro area slowdown concerns. Meanwhile, the UK docket remains data-empty, with the Brexit-related headlines likely to offer some impetus to the GBP traders.
In contrast, the NA calendar is a heavy-showing, with the key US retail sales and Canadian inflation figures due for release at 1230 GMT, followed by the US industrial production and capacity utilization data dropping in at 1315 GMT among other minority reports. Next of relevance remains the US EIA weekly crude stocks data, due on the cards at 1430 GMT, for fresh oil trades.
Apart from the macro releases, the speeches by the following central bankers will also hog the limelight later today amid ongoing US-China trade war.
- 1330 GMT: Fed’s Quarles.
- 1415 GMT: ECB’s Coeure.
- 1630 GMT: ECB’s Praet.
When is German GDP data and how could it affect EUR/USD?
The pair looks set to test 1.1176 (March 7 low) and could slide further if Germany reports a weaker-than-expected rebound in growth rate. The losses could be limited around 1.1176 if German GDP matches estimates, while a move above 1.1263 could be seen if the data beats expectations by a big margin.
GBP/USD recovers as UK politics turn positive, US data in spotlight
The pair recently benefited from the UK’s positive headlines for Brexit. However, some of the frontline data from the US could steal the show during the later part of the day.
US Retail Sales - Does it Even Matter?
Wednesday' retail sales report is one of the most important pieces of US data scheduled for release this week. Spendig is essential to the economy because without spending, there's no growth and without growth, there's no jobs.
Gold aims to revisit 50-day SMA amid pullback in safe-havens
50-day simple moving average (SMA) level near $1292 can act as immediate support, a break of which highlights lower-line of the short-term “rising wedge” formation that stands around $1286.
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