Forex Today: Post-Fed USD rally stalls, eyes on UK PMI, ECB Draghi

Dhwani Mehta FXStreet

Holiday-mode light trading extended into Asia this Thursday, as Japan remains off until Monday. Although, poor first-tier data from Australia and China drove sentiment across the financial markets. Meanwhile, broad based US dollar consolidation remained the underlying theme, as dust settled over the Fed decision aftermath. Investors digested latest headlines on the Trumpcare vote, as the House votes today on it. Also, reports of the Queen calling her entire household to 'highly unusual' emergency meeting at Buckingham Palace today garner some attention towards late-Asia.

Heading into Europe, Euro area final services PMIs will be reported alongside the UK services PMI and Eurozone retail sales data. Meanwhile, the NA session offers the Canadian trade figures, US jobless claims, trade data and factory orders. Besides, ECB Draghi’s speech will be closely heard for fresh hints on the monetary policy program.

However, the main risk events for the markets remain the US payrolls data, Fed Chief Yellen’s speech and French elections due later this week.

Main topics in Asia

US House Rules Committee clears Republican Healthcare Bill for vote by full house on Thursday

Reuters reporting latest headlines on the Trumpcare Bill, citing that the US House Rules Committee clears Republican Healthcare Bill for vote by full house on Thursday.

Queen calls her entire household to 'highly unusual' emergency meeting

According to Daily Mail, the Queen called her entire household to 'highly unusual' emergency meeting at Buckingham Palace today.

China 's Caixin April Services PMI: Weakest reading since May 2016

China 's Caixin April Services PMI came in at 51.5 vs 52.2 last, while its composite was 51.2 vs 52.1 last.

Australia trade surplus shrinks in March, misses expectations

Australia trade balance for March came in at AUD 3107bn vs AUD 3250bn expected and AUD 3574bn prior, representing a big miss on expectations.

RBA’s Lowe: Lower rates would increase imbalances in the system

“We've needed low interest rates given economic situation”

Key Focus ahead

Euro area retail sales and Norges Bank rate decision amongst market movers today – Danske Bank

Analysts at Danske Bank points out that Euro area retail sales for March released today and following solid monthly increases in both January (0.1%) and February (0.7%) they expect a marginal monthly decline of 0.1% in March.

UK services PMI to slip from 55.0 to 54.5 in April - TDS

In view of the analysts at TDS, consensus is looking for the UK services PMI to slip from 55.0 to 54.5 in April.

EUR/USD: Recovery runs into 1.0900 barrier ahead of PMIs

The bulls take a breather after a solid Asian recovery, keeping EUR/USD capped below 1.09 handle in anticipation of mixed final services PMI data from across the Euro area economies.

Unemployment and Labor Force Participation rates - Nomura

Analysts at Nomura explained that they expect the unemployment rate (UR) to remain unchanged at 4.5% in April.

GMT	Event	Consensus	Previous
Thursday, May 04
07:55	EUR Markit Services PMI	54.7	54.7
07:55	EUR Markit PMI Composite	56.3	56.3
08:00	EUR Markit PMI Composite	56.7	56.7
08:00	EUR Markit Services PMI	56.2	56.2
08:30	GBP Net Lending to Individuals (MoM)	£4.5B	£4.9B
08:30	GBP Consumer Credit	£1.300B	£1.441B
08:30	GBP Mortgage Approvals	67.400K	68.315K
08:30	GBP Markit Services PMI	54.5	55.0
08:30	GBP M4 Money Supply (MoM)	0.2%	-0.3%
08:30	GBP M4 Money Supply (YoY)		5.7%
09:00	EUR Retail Sales (MoM)	0.1%	0.7%
09:00	EUR Retail Sales (YoY)	2.1%	1.8%
11:30	USD Challenger Job Cuts (YoY)		43.31K
12:30	USD Trade Balance	$-44.5B	$-43.6B
12:30	USD Continuing Jobless Claims	2.000M	1.988M
12:30	USD Initial Jobless Claims	247K	257K
12:30	USD Nonfarm Productivity	0.0%	1.3%
12:30	USD Unit Labor Costs	2.5%	1.7%
12:30	CAD International Merchandise Trade	$-0.80B	$-0.97B
12:30	CAD Exports		$45.34B
12:30	CAD Imports		$46.31B
14:00	USD Factory Orders (MoM)	0.4%	1.0%
14:30	USD EIA Natural Gas Storage change		74B
16:30	EUR ECB President Draghi's Speech
20:25	CAD BoC Governor Poloz Speech

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD turns negative; slips back to 1.3530

GBP/USD comes under pressure and weakens toward the 1.3530 zone on Tuesday. Cable thus leaves behind two daily upticks in a row and retreats further from Monday’s multi-week tops past 1.3570 following humble gains in the Greenback and disheartening UK jobs data.

EUR/USD comes under pressure near 1.1570

EUR/USD could not sustain the earlier bullish attempt toward the proximity of 1.1600 the figure, coming under fresh downside pressure and revisiting the 1.1580-1.1570 band as the NA session draws to a close on Tuesday. The better tone in the US Dollar in the latter part of the day weighs on the pair amid steady volatility in the Middle East. Looking forward, the release of the FOMC Minutes takes centre stage on Wednesday.

Gold remains offered around $4,350

Gold accelerates its daily correction and revisits the $4,350 zone per troy ounce on Tuesday. The precious metal sets aside two daily advances in a row and follows the absence of direction in the US Dollar, declining US Treasury yields across the curve and continuous uncertainty in the Middle East crisis.

Bitcoin volatility falls below Nasdaq as market activity hits multi-year low

Bitcoin’s 30-day volatility has fallen below that of the Nasdaq for only the fifth time on record, as subdued trading activity and declining volumes point to an unusually quiet period, according to a Tuesday report from K33. BTC's 30-day volatility has dropped to 1.132%, marking its fourth-lowest reading of the 2020s. Seven-day volatility also dropped to 0.52%, its lowest level since 2023.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.