We didn’t see any top-tier releases or fresh catalysts at the start of the week, but that didn’t stop forex market players from pricing in their biases.
- Japan’s PPI accelerates by 2.0% from a year ago in April vs. 2.1% uptick in March
- Trump to help China’s ZTE “get back into business, fast”
Overall risk appetite
With no major data printed in the last couple of hours, market players took the opportunity to take some profits from last week’s price action while others priced in their biases ahead of this week’s economic events.
The dollar, for example, took a step back when 10-year U.S. Treasury yields failed to hold above the closely-watched 3.0% mark. If your recall, a weaker-than-expected U.S. CPI release recently spooked some bulls out of extending the dollar’s intraweek gains.
Meanwhile, traders got a bit more optimistic about the U.S.-China trade talks after Trump himself tweeted that he’s helping get Chinese company ZTE “get back into business, fast.”
President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!
— Donald J. Trump (@realDonaldTrump) May 13, 2018
This, added to optimism ahead of this week’s economic releases helped prop up overall risk appetite in the Asian bourses.
- Nikkei is up by 0.36% to 22,841.5
- Australia’s A SX 200 is up by 0.31% to 6,127.7
- Shanghai index is up by 0.55% to 3,180.796
- Hang Seng is up by 1.28% to 31,521.8
Commodity prices, on the other hand, reflected a slight dip in U.S. dollar demand as well as rising opposition from European and Asian superpowers over Iran’s sanctions from the U.S.
- Gold is up by 0.06% to $1,319.69
- Brent crude oil is flat at $76.95
- U.S. WTI is down by 0.03% to $70.42
Major Market Mover(s):
The low-yielding yen took some hits on the back of increased risk-taking.
GBP/JPY is up by 32 pips (+0.21%) to 148.37
EUR/JPY is up by 27 pips (+0.21%) to 130.82
AUD/JPY is up by 14 pips (+0.17%) to 82.62
EUR and GBP
There were no specific catalysts for the European currencies, though some analysts pointed to optimism over this week’s scheduled economic reports and speeches from ECB officials.
GBP/USD is up by 28 pips (+0.21%) to 1.3567
GBP/CAD is up by 29 pips (+0.17%) to 1.7342
GBP/NZD is up by 43 pips (+0.22%) to 1.9475
GBP/CHF is up by 23 pips (+0.17%) to 1.3557
EUR/USD is up by 24 pips (+0.20%) to 1.1962
EUR/NZD is up by 30 pips (+0.17%) to 1.7173
EUR/CHF is up by 12 pips (+0.10%) to 1.1954
Watch Out For:
- 6:00 am GMT: Japan’s preliminary machine tool orders (y/y)
- 6:45 am GMT: FOMC voting member Loretta Mester to give a speech in Paris