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Weak reports from the Euro Zone as well as war concerns in the Middle East pushed the dollar higher across the board.

Meanwhile, the New Zealand dollar extended its losses despite a lack of fresh catalysts.

  • Canada’s raw materials price index shoots up by 2.1% vs. 0.6% expected, -0.4% previous
  • U.S. core PCE price index maintains 0.2% uptick in March
  • U.S. personal spending improves from 0.0% to 0.4% as expected
  • U.S. personal income steadies at downwardly revised 0.3% growth
  • U.S. Chicago PMI up from 57.4 to 57.6 vs. 58.2 expected
  • U.S. pending home sales inches up by 0.4% vs. 0.6% expected, 2.8% previous

Major Events/Reports:

Israel’s Netanyahu stirs nuclear war pot

The biggest story of the hour is Israel Prime Minister Benjamin Netanyahu putting the pressure on the U.S. to pull out of a nuclear deal with Iran.

In a prime-time address on Israeli TV, Netanyahu presented “secret files” that he claims proves that “Iran lied about never having a nuclear weapons program,” and that “Iran continued to preserve and expand its nuclear weapons knowledge for future use.

If you recall, back in 2015 Iran made a deal with six major powers – Britain, China, France, Germany, Russia and the United States to limit its nuclear program in return for the U.S. easing the pressure on Iran’s economic sanctions.

Fast forward to today and Trump has given Britain, France, and Germany until May 12 to address loopholes in the deal before he re-imposes sanctions on Iran.

Much of Netanyahu’s evidence seems to be dated before the 2015 accord was signed, but some believe that it might be enough to embolden those around Trump who want the U.S. to back out of the deal.

Downbeat risk sentiment

Brewing tensions in the middle east, combined with weak European data and the strong dollar weighing on U.S. companies that have businesses abroad have taken its toll on U.S. equities markets.

  • Dow 30 index is down 148 points to 24,163.15 (-0.61%)
  • S&P 500 index is down 21 points to 2,648.05 (-0.08%)
  • Nasdaq is down to 7,066.27 (-0.8%)

Gold prices continued to slip on the back of dollar demand, while oil prices received a boost from Netanyahu’s “secret files” presentation.

  • Gold is down by $8 to $1,315
  • Brent crude oil is up by 0.12% to $68.52
  • U.S. WTI is up by 0.10% to $68.67

Major Market Mover(s):

USD

The Greenback remained king of pips during the U.S. session as positive U.S. reports and concerns over the sustainability of other major economies’ recoveries improved demand for the safe haven.

EUR/USD shot up to a session high of 1.2107 before slipping back down to 1.2077, USD/JPY dropped to 109.08 before settling back up to 109.32, and USD/CHF rose from a low of .9888 to trade at .9910.

NZD

The high-yielding Kiwi couldn’t catch a break against its major counterparts, as it continued to fall across the board despite a lack of fresh bearish catalysts.

NZD/USD dipped from .7044 to .7038, NZD/JPY slipped from 77.03 to 76.91, GBP/NZD popped up from 1.9493 to 1.9569, and NZD/CAD dropped from .9066 to .9031.

Watch Out For:

  • China’s markets out on Labor Day holiday
  • 12:30 am GMT: Japan’s final manufacturing PMI expected to maintain initial reading of 53.3
  • 4:30 am GMT: RBA’s monetary policy statement