Market Briefs
AUD/USD the big mover in Asia-Off 1.0% on RBA statement.
RBA: Underlying inflation seen at 1-2% end 2016 (previos 2-3%).
RBA Quarterly Statement: Policy easing based on lower inflation outlook.
EUR/USD +0.14%, USD/JPY -0.33%, GBP/USD +0.2%.
DXY -0.2%, DAX -0.6%, Brent -0.6%, Gold +0.15%, Iron -1.3%.
NBP leaves rates unchanged at 1.5%- In line with market expectations.
Adam Glapinski designated NBP governor-Replaces Belka from June 11.
Ladbrokes quotes 5/1 on 2nd Scottish independence vote before 2020.
Swiss SNB FX reserves CHF587 bln end-Apr vs CHF 576 bln March.
China Evergreen Holding Group warns difficulty repaying bond due May 15.
Economic Data Preview
(0800 ET/1200 GMT) Brazil's annual inflation rate as measured by the benchmark IPCA index, was seen rising 9.20 percent in the 12 months through April, easing from 9.39 percent increase in March.
(0830 ET/1230 GMT) The U.S. employers probably to have maintained a steady pace of hiring in April, pointing the economy's fundamentals remain sound despite growth almost stalling in the first quarter. Nonfarm payrolls are expected to have risen 202,000 in April after gaining 215,000 in March. The average weekly hours is likely to stay at 34.5 vs 34.4 in March.
(0830 ET/1230 GMT) The U.S. jobless rate is seen holding steady at 5.0 percent and average hourly earnings rising 0.3 percent after a similar gain in March. A strong employment report coming from the improvement in services sector activity and automobile sales in April will suggest the sharp slowdown in growth is temporary. It will also put the Fed's June interest rate hike into contention.
(0830 ET/1230 GMT) The Statistics Canada releases employment data for April. Jobs growth is expected to be flat after the economy created 40,600 jobs in March, far surpassing economists' expectations for 10,000, and driven by a 35,300 increase in full-time jobs. The April unemployment rate, however, is expected to have slightly increased to 7.2 percent from 7.1 in March.
(1000 ET/1400 GMT) The pace of Canada's purchasing activity is likely to have picked up in April. The Ivey Purchasing Managers Index is expected to have risen to 52.5 after slowing to just above the 50 threshold in March.
(1500 ET/1900 GMT) The U.S. Federal Reserve will release its consumer credit figures for March, which likely fell to $16.0 bln from 17.22 bln in February.
(1300 ET/1700 GMT) Baker Hughes reports US Oil Rig Count for March.
Key Events
(1100 ET/1500 GMT) Bank of Canada Deputy Governor Lawrence Schembri will participate in a panel discussion in Ottawa. The discussion will be on the role central banks play in financial stability. Investors will be watching for comments on what direction monetary policy is heading in.
(1145 ET/1545 GMT) FedTrade Operation 30-year Ginnie Mae max $1.35 bln.
Equities Recap
Stock markets in Europe and Asia tumbled on Friday and were on track to record their worst week since mid-February amid hopes of improved U.S. non-farm payrolls data.
The Europe's FTSEurofirst 300 opened down 0.17 pct to 1,304.71 points, Euro Stoxx 50 was down 0.44 pct, UK's FTSE fell 0.58 pct, France's CAC lost 0.84 pct and Germany's DAX slid 0.45 pct by 0951 GMT.
Japan's Nikkei, which resumed trading after Golden Week holidays, closed down 0.25 at 16,106.72, China's CSI300 Index ended down 2.6 pct at 3,130.35 points, while Shanghai Composite Index closed down 2.8 pct at 2,913.25 points and finished the week 0.9 pct lower. Australia's S&P/ASX 200 Index gained 0.20 pct at 5,289.60 points, HK’s Hang Seng Index edged down 1.7 pct at 20,109.87 points. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1 percent, set for a weekly decline of 3.3 percent, its biggest in 12 weeks.
Commodities Recap
Oil prices dropped on Friday as investors booked profits on a 20 percent rise over the past month, offsetting the impact of crude production cuts in Canada. Brent futures were down 24 cents at $44.77 a barrel at 0848 GMT. WTI futures traded at $44.07, down 25 cents day on day.
Gold inched higher as a rebound in the dollar helped the metal to recover from four days of losses, though moves were very limited as traders were awaiting the U.S. payrolls data later in the day. Spot gold climbed 0.3 percent to $1,281.20 an ounce by 0934 GMT, while U.S. gold futures for June delivery gained $10.80 to $1,283.10. For the week, gold was set for a 1 percent drop, its biggest drop since the week ended March 25.
Treasuries Recap
The U.S. Treasuries were trading nearly flat ahead of April non-farm payroll data. The yield on the benchmark 10-year bonds, which moves inversely to its price stood unchanged at 1.747 pct.
The European bonds were trading mixed as investors await U.S. payroll data. The benchmark German 10-year bonds yield fell 1bp to 0.158 pct, French 10-year yield too climbed 1bp to 0.543 pct, Italian equivalents jumped 3bps to 1.529 pct, Spanish 10-year bonds yield inched higher 3bps to 1.616 pct, Portuguese 10-year bonds yield rose 4bps to 3.334 pct. While the British 10-year gilts yield dropped 2bps to 1.448 pct by 1000 GMT.
The Japanese government bonds were trading modestly firmer, succumbing to thin trading activity as Japanese markets opened for first time since Monday after long vacation. Also, weak PMI figures and tumbling oil prices pushed investors towards safe assets. The yield on the benchmark 10-year bonds fell 1bps to -0.112 pct.
The Australian government bonds rallied for four consecutive days as investors were cautious ahead of U.S. employment data. Also, tumbling crude oil prices drove investors towards safe-haven assets. The yield on the benchmark 10-year Treasury note slid 9 bps to 2.290 pct. The New Zealand bonds traded nearly flat amid subdued trade with investors seeking riskier assets. The yield on the benchmark 10-year bonds stood unchanged at 2.650 pct.
FX Beat
USD: The dollar dropped against a basket of currencies on Friday but on track to record weekly gains as investors await for April non-farm payrolls report. The dollar index was down 0.25 percent at 93.550, after gaining around 2 percent from a low of 91.919 touched earlier this week, the lowest since January 2015. The greenback was 0.2 percent lower against the yen at 107.04 yen, after rising for three straight days to pull away from an 18-month low of 105.55 struck on Tuesday. It is on track to record a weekly gain of 0.6 percent versus the yen.
EUR/USD: The euro, which rose to an eight-month peak of $1.1616 on Tuesday, was trading at $1.1420, up 0.15 pct. The short term trend is slightly bearish as long as resistance 1.1530 holds. On the higher side minor resistance is around 1.15300 and any indicative break above 1.1530 will take the pair to next level till 1.1600/1.16200. The short term support is around 1.13800 and break below targets 1.13300/1.12700/1.1215. For the week, it was trading at $1.1395, down 0.5 percent, but analysts are unconvinced that is the start of a wider upturn for the greenback.
USD/JPY: The yen, which jumped after the Bank of Japan stood pat on policy last week, changed hands at 107.235 per dollar, off its 1-1/2-year high of 105.55 set earlier this week. The short term trend is slightly bearish as long as resistance 107.60 (3 W EMA) holds. On the lower side any break below 105.20 (200 W MA) will drag the pair down till 104.85/103. The minor support is around 106.50/105.80/105.20 and the minor resistance is around 107.60 and break above targets 108.50/109.35.
AUD/USD: The Australian dollar slid 1.4 percent to a 2-month low of $0.7358 after the Reserve Bank of Australia (RBA) slashed its inflation forecasts, suggesting the door was open for another interest rate cut. It sank over half a U.S. cent to break under 74 cents for the first time in two months. The short term trend is slightly bearish as long as resistance 0.7520 holds. On the higher side major resistance is around 0.7520 and break above targets 0.7600/0.7630. The minor resistance is around 0.7450/0.7480 and the loss of major support at $0.7386 would likely see a test of $0.7336, the 50 percent retracement of the January-April move. The Aussie also hit two-month lows against the yen and euro.
GBP/USD: The Sterling was steady on Friday ahead of the U.S. payroll data that should provide some hints about when the Federal Reserve will raise U.S. interest rates again. The non-farm payrolls report is expected to show 202,000 jobs added in April after increasing by 215,000 in March.
The Sterling edged down 0.1 percent on Friday to $1.4493, almost three cents away from a 4-month high hit of $1.4770 on Tuesday. For the week, it edged down 0.8 percent versus the greenback, on track for its first weekly drop in four. The short term trend is weak as long as resistance 1.4600 holds. On the higher side the major resistance is around 1.4600 and break above targets 1.4670/1.4755 levels.The minor resistance is around 1.4530/1.4580.
On the lower side the major support is around 1.4450 and break below targets 1.4400/1.4380 level. Against the euro, the pound was flat at 78.775 pence.
USD/CHF: The pair has slightly declined after forming a double top around 0.9700. It was trading around 0.9684. The short term trend is slightly bullish as long as support 0.9630 holds. Any violation above 0.9700 will confirm minor bullishness, a jump till 0.9780 holds. On the lower side any break below 0.9630 will drag it down till 0.9575/0.9500.
NZD/USD: The New Zealand dollar was trading at 0.6830, down 0.73 pct, and away from recent 10-month highs. The key support was found at $0.6808. The kiwi has dropped 1.7 percent this week, in part due to falling dairy prices and growing expectations of a rate cut in June by the Reserve Bank of New Zealand.
The material has been provided by InstaForex Company - www.instaforex.com