FOREX News Today

European Outlook: Asian stock markets are mostly higher, although Hang Seng and Chinese bourses headed south as concerns about the impact of slowing Chinese growth resurfaced. U.S. and U.K. stock futures are also down and it seems markets are heading for some profit taking after the rally over the past days. Eurozone markets may still outperform as the deal with Greece as the deal with Greece will go some way to restore confidence in the Eurozone project. Oil prices are slightly higher on the day, with the front end WTI futures moving towards USD 50 per barrel and the Brent contract having already reached and breached this key psychological level. The European calendar today has final Q1 GDP numbers from Spain and the U.K. as well as BBA mortgage data for the U.K. and Italian retail sales.

Bank of Canada held rates steady at 0.50%, matching widespread expectations. The bank judges that the risks to the inflation profile are roughly balanced, an identical assessment to April. Household vulnerabilities have moved higher amid strong regional divergences in the housing market. The economy will be hit by the Q2 oil production slowdown, but a rebound is seen in Q3 as oil production resumes and reconstruction begins. Overall, the announcement was consistent with no change in rates for an extended period.

US Markit reported its flash services PMI stumbled to 51.2 in May, after increasing to 52.8 in April from 51.3 in March. The index has been correcting from the February drop to 49.7, but this slowing in activity is a bit of a disappointment. It was 56.2 a year ago. Employment slid to 51.8 from 53.1 from 54.0 in March, and is the lowest print since December 2014. Prices charged did rise, however, to the highest since November 2015. The flash composite index dropped to 50.8 from last month’s 52.4 and compares to 51.3 in March. The employment component softened to 51.7 from 52.6, and is the lowest since April 2014. But as with the services index, the price component rose and hit its highest since July 2015.

 Fedspeak: Harker, Kashkari, and Kaplan didn’t break new ground (and none are voters). The Philly Fed’s Harker repeated that 2 or 3 rate hikes are possible this year, echoing several other policymakers’ thoughts. Neither Minneapolis Fed’s Kashkari nor Dallas Fed’s Kaplan weighed in on policy per se, but neither suggested any opposition to the talk of further normalization. Kashkari said his view is for moderate U.S. growth. And, Dallas Fed’s Kaplan indicated that high debt to GDP ratios can be a headwind to growth, and he’s aware that global events can impact financial conditions.

Main Macro Events Today

• US Durable Goods Expectations are for  significant rebound in the Core rate to 0.3% from last month’s -0.2%. The overall headline figure (including the volatile transport sector) is expected to fall to 0.4% from 0.8% last time. Weekly jobless claims are also out at the same time so there is added potential for volatility around the USD at 12:30 GMT.

• UK GDP  Final 1Q GDP figures are out later and expected to confirm a YoY growth of 2.1% and QoQ growth of 0.4%. Any significant difference from consensus and the strong few days sterling has enjoyed is likely to see some profit taking.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

RBA cut its forecast for inflation: The RBA has cut its forecast for underlying inflation in 2016 to 1-2% from 2-3% in the Statement on Monetary Policy. The Bank’s forecasts for growth and the labour market were little changed from the February Statement on Monetary Policy. Further rate cuts look likely this year amid increased risk that inflation expectations remain persistently lower for longer than the Bank currently expects. The 3-year yield fell to a record low 1.567% after the Statement. AUD-USD fell 0.8% to 0.7400 from 0.7460 as the Australian dollar lost value against the U.S. dollar following the release of the Statement. The 0.7450 level had been a strong support area during March and April.

EMU: What Investment Weakness? Eurozone Q1 GDP numbers may have surprised on the upside, but growth projections continue to be revised down. Global risk factors aside, weakness in core countries and the apparent lack of investment have been largely blamed for the modest growth performance as well as the ECB’s latest round of easing measures. But while Draghi’s policy of easy money has managed to give equipment investment a strong boost, governments are still not delivering on either structural reforms or budget consolidation and their over-reliance on the central bank’s cheap funds will come back to haunt the Eurozone

Lots of Fedspeak: Fed’s Lockhart said he’s on the fence currently regarding a June rate hike, in a CNBC interview. And he said the Fed should keep the rate hike option open. It’s too early to tell much about Q2 GDP. He does believe the Brexit vote could be a consideration for policymakers. Fed governor Kaplan also concurred with the latter sentiment, in comments on Bloomberg Radio. He added he’d like to see more job market improvement, along with evidence of firming inflation. SF Fed’s Williams on CNBC said he’s optimistic on growth and believes that “residual seasonality” in Q1 GDP understates the health of the economy and views the jobs mandate as largely met, while inflation is rebounding. Finally, StL Fed’s Bullard reiterated June is a live meeting and added that options are open. The open question is whether the data will justify a hike.

Japan PM Abe is continuing his tour of Europe: Urging cooperation against undesirable volatile FX moves, where “appropriate action” will be taken as needed given the impact on Japan’s trade-reliant firms. He argues for coordination on the global economy, along with flexible fiscal policy and avoiding over reliance on monetary tools. Ahead of the G7 meetings he says that there is agreement with leaders of UK, France and Germany that FX stability and not rapid FX moves are desirable after recent rapid and speculative trade, though Japan isn’t attempting to influence FX moves on a permanent basis. Clearly Japan is feeling the pinch of the strong yen and it is undermining their reflation goals. USDJPY remains over 107 and is currently trading at 107.20.

Main Macro Events Today

• US Employment (NFP): US Employment for April is out later and should reveal a 210k (median 208k) headline for the month following larger increases of 215k in March and 245k in February. Initial claims improved dramatically during April which could help lift the headline but consumer confidence measures and ADP were subdued.

• Canada Employment: We expect a 10.0k rise in April employment, due Friday, after the 40.6k surge in March. The risk is the downside for April, as goods sector jobs could remain soft while the service sector could see a more modest gain (or pull-back.) The unemployment rate fell to 7.1% in March after moving to 7.3% in February. We expect the rate to nudge to 7.2% in April. Hours worked are seen rising 0.2% m/m in April after the flat reading in March.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

European Outlook: The global sell off on stock markets continued in Asia overnight, with global growth concerns lingering after mixed U.S. data yesterday were followed by a dip in China’s Caixin Services PMI (more below). Japan, South Korea, Thailand and Indonesia were closed. U.S. and U.K. stock futures are moving higher, so it looks like another early attempt at stabilisation, although we have been there yesterday and stock markets still headed south in the end. Bund futures managed to claw back losses in after hour trade and could post some early gains, but yesterday’s rise in yields and widening of spreads highlights that the Eurozone still remains vulnerable to jitters in confidence. The European calendar has the UK Services PMI for April, which is expected to rise to 54.2 (med 54.1) from 53.7 in the previous month. The UK also has Halifax house price data, while the Eurozone data calendar is empty, leaving the focus on the ECB’s latest economic bulletin and ongoing Greek bailout review talks.

 China Caixin Services PMI Falls: The index fell to 51.8 for April from 52.2 in March but is still growing with new business growing the most this year and business expectations remained unchanged. Expectations were for an increase to 52.6 the figures have been received as disappointing overall. “Expansion in the services sector helped offset some of the impact caused by flagging manufacturing. Overall, however, the economy still faces relatively strong downward pressure,” He Fan, chief economist of Caixin, said in a note. “The government needs to keep implementing moderate stimulus to prevent a hard landing of the economy.” The slowing in the headline index may add to market nervousness over growth.

Australian data releases beat forecasts. Retail sales rose 0.4% m/m in March, up from 0.1% the month prior and above the median forecast for a 0.3% rise. The trade deficit deflated to -A$2.2 bln in March from February’s -A$3.0 bln (revised from -A$3.4 bln), and below the median expectation for a deficit of -A$2.9 bln. New homes sales lifted by 8.9% m/m in March, more than reversing the 5.3% drop seen in February, according to Housing Industry Association data. The data is prompting upward revisions to Q1 GDP estimates and has sparked a rally in the Aussie dollar, which is presently up by just over 0.6% versus the US buck.

Main Macro Events Today

• US Initial jobless claims: Initial claims data for the week of April 23rd is out today and is expected to show a headline increase to 263k from 257 last week and 248k, forty year low, prior to that. Claims for the month are poised to average 254k from 264k in March and 261k in February.

• UK Services PMI:  Expectations are for a slight fall to 53.5 from 53.7 in April, following the surprise March low of 52.7.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.