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U.S. economic figures came in stronger than expected, but these weren’t enough to keep the Greenback’s spirits up as equity indices closed slightly lower.

  • U.S. headline PPI up 0.5% vs. projected 0.2% uptick in April
  • U.S. core PPI up 0.4% vs. estimated 0.2% gain
  • Initial jobless claims at 236K vs. 245K forecast, 238K previous
  • Canadian new housing price index up by 0.2% as expected
  • OPEC monthly report: Cartel production fell in April, non-OPEC output rose
  • Business NZ manufacturing index down from 58.0 to 56.8 in April

Major Events:

Strong U.S. economic data

The latest batch of reports all came in the green for Uncle Sam, sending positive vibes ahead of the top-tier CPI and retail sales figures due in the next New York session.

Headline PPI ticked 0.5% higher in April versus the projected 0.2% uptick while the core version of the report printed a 0.4% gain. These reflected stronger inflationary pressures compared to the March readings of -0.1% and 0.0% for the headline and core PPI, respectively.

Components of the report showed that the gains were mostly from final demand services, which comprise trade, transporting, and warehousing activity, which were enough to lift annual PPI to its highest level since 2012.

Initial jobless claims came in at 236K versus the 245K forecast, also lower than the previous 238K reading. This marks back-to-back weeks of better than expected claims data, signaling strong momentum in the jobs market.

  • Nasdaq closed 13.17 points down to 6,115.96 (-0.22%)
  • Dow 30 index closed 23.21 points down to 20,919.90 (-0.11%)
  • S&P 500 index closed 5 points down to 2,394.57 (-0.21%)

OPEC monthly report: U.S. output still rising

In their monthly update, the OPEC shared that the group’s production dropped in April but that this reduction was offset by an increase in non-OPEC output.

In particular, non-OPEC production rose by 580,000 barrels last month, with U.S. oil rigs accounting for 93% of the increased output in April. Even though production in Saudi Arabia ticked slightly higher by 50,000 barrels, it continues to shoulder most of the cartel’s cuts agreed upon in November last year.

The OPEC also raised its forecast for non-OPEC output to rise by 950,000 barrels per day this year, up from its earlier estimate of a 580,000 barrels per day increase. Meanwhile, it left its world oil demand forecast unchanged at 96.4 million barrels per day.

“U.S. oil and gas companies have already stepped up activities in 2017 as they start to increase their spending amid a recovery in oil prices,” the reported indicated.

Major Market Movers:

USD

The dollar edged slightly lower against its peers as traders seemed to book profits off the recent rallies.

EUR/USD bounced from a low of 1.0839 to a high of 1.0873 (0.31%), USD/JPY is down from 114.16 to a low of 113.46 (-0.61%), GBP/USD found support off 1.2850 and climbed to 1.2896 (0.35%), and USD/CHF retreated from 1.0100 to 1.0056 (-0.44%).

 

Watch Out For:

  • 12:50 am GMT: Japanese M2 money stock y/y (4.3% expected, 4.2% previous)