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Forex News Timeline

Friday, April 28, 2017

The GBP/USD pair caught some fresh bids in the US afternoon and leaped to a new 7-month high at 1.2965. Earlier in the session, the pair retraced back

The GBP/USD pair caught some fresh bids in the US afternoon and leaped to a new 7-month high at 1.2965. Earlier in the session, the pair retraced back towards 1.29 and found support around that level. As of writing, the pair was trading at 1.2955, up 0.4% on the day. A broad-based cable strength coupled with a stationary US Dollar Index allowed the pair to add on to its daily gains before the week comes to an end. Following another weak test of the 99 level, the DXY lost momentum and has been spending the last few hours in a very slim range around 98.90. The fact that there were no fundamental catalysts seen behind that recent upsurge suggests that month-end flows might also be supporting that move.US Dollar Index posts lowest monthly close since OctoberThe pair was able to gain nearly 600 pips in April as it recorded strong weekly gains in the last three weeks in a row. The main reason behind this strong performance is the announcement of the snap election in the UK, as it heightened the expectations that the Brexit process would be finalized in a faster and smoother way than initially anticipated. When PM May announced the decision on April 18, she highlighted that Britain was in need of certainty, stability and strong leadership following the EU referendum.Technical outlookThe RSI on the daily graph shows overbought conditions above 70 mark and a technical correction could be seen before another bullish attempt. The next resistance for the pair aligns at 1.30 (psychological level) ahead of 1.3060 (Sept. 28 high) and 1.3120 (Sept. 22 high). On the flip side, supports are located at 1.2900 (psychological level), 1.2840 (Apr. 27 low) and 1.2760 (Apr. 21 low).GBP/USD still looks overbought – UOB

CME Group FedWatch tool, which calculates unconditional probabilities of Federal Open Market Committee (FOMC) meeting outcomes to generate a binary pr

CME Group FedWatch tool, which calculates unconditional probabilities of Federal Open Market Committee (FOMC) meeting outcomes to generate a binary probability tree, shows the probability of a rate hike in June fell to 63.1% from 67.6% (yesterday) on the last trading day of April amid dismal macroeconomic data from the US.  Today's data showed that the U.S. economy grew at its weakest pace since 2014, with the real GDP increasing at a 0.7% annual rate in the first quarter of 2017. The main drag on the growth rate seems to be the weak consumer spending accompanied by higher imports and downturns in private inventory investment.US: Real GDP increased at an annual rate of 0.7% in the first quarter of 2017Despite today's drop, CME Group FedWatch tool suggests that markets are still expectant of a June rate hike.   

The US dollar index is about to post the third weekly decline in a row and the lowest monthly close since October. The greenback opened the week...

The US dollar index is about to post the third weekly decline in a row and the lowest monthly close since October. The greenback opened the week sharply lower after the French election results and was unable to recover.  On Friday, the DXY remained inside the range of the previous days, moving between 99.20 and 98.50; consolidating the decline of the weekly opening.  Next week the range is likely to be challenged taking into account the key events that will take place in the US. The Federal Reserve will have its 2-day meeting (no change is expected) and on Friday, the Labor Department will release its official report.  US: Key events for next week - Danske Bank

The rally of European currencies was behind the decline of the US dollar index. While EUR/USD and GBP/USD reached monthly highs, the greenback remained strong against commodity currencies. It bounced versus the Japanese yen, erasing April’s losses.Below key trend lineThe index continues to slide after finding resistance two weeks ago around 101.00, where a bearish trend line stands. It respected the dynamic resistance and turned to the downside. At the beginning of the week, it broke a medium-term bullish trend line and remained below at all times.  The daily chart shows risk tilted to the downside, as long as the index holds under 99.40. While on the opposite direction, if it rises on top of 100.80 (downtrend line) the DXY would regain strength. 

Analysts from Danske Bank, take a look into next week events in the US, that include a Fed meeting and the US official employment report...

Analysts from Danske Bank, take a look into next week events in the US, that include a Fed meeting and the US official employment report. Key Quotes: “In the US, the coming week brings several important events. The first is the FOMC meeting ending on Wednesday. This meeting is one of the small meetings (no updated projections and no press conference) and we do not expect any changes in monetary policy or any major changes in the statement.” “The labour market report for April is due on Friday. The report for March was surprisingly weak – also taking into account the weather effects. Our models based on PMIs point to yet another weak jobs report, with an increase in employment of around 100,000. However, given that the report for March was very weak, we expect the figures for April to reflect some correction of these numbers. Hence, we expect total jobs growth of 170,000, with manufacturing contributing 15,000 and services 140,000. Our estimate of job creation is a bit below consensus among analysts, probably because we do not expect as strong a correction of the March numbers as other analysts given that February was stronger than usual.” “Note that we are due to get ADP employment for April on Wednesday, which should give us a first impression of the shape of the labour market in April.” “On Monday, we also get ISM manufacturing figures for April and final PMI manufacturing figures for April. Over the past few months, we have seen a divergence between ISM, PMI and regional manufacturing indices. The preliminary PMI figures for April fell a bit back but the regional indices continued climbing higher. We estimate ISM fell further in April. Our models continue to point towards a deceleration of economic growth and, therefore, we put less weight on the regional manufacturing indices.”

According to analysts from Wells Fargo, the Australian dollar is likely to decline against the US dollar taking into account recent dynamics and...

According to analysts from Wells Fargo, the Australian dollar is likely to decline against the US dollar taking into account recent dynamics and the divergence of monetary policy between the Reserve Bank of Australia (RBA) and the Federal Reserve. Key Quotes: “The RBA is facing somewhat conflicting concerns at present, with a soft domestic economy supporting the case for a maintenance of accommodative policy, while mounting debt imbalances could perhaps be curbed by tighter policy. In all, the RBA is likely to hold policy steady well into next year, at which point it may begin the gradual process of normalizing interest rates.” “Given the outlook for further policy tightening from the Federal Reserve, and considering recent dynamics and trends in Australian capital flows, we see trend weakness ahead for the Australian dollar against the greenback.”“Despite our overall negative view on the Australian dollar against the greenback throughout the balance of 2017 and into 2018, by the middle of next year, the Australian currency may be stabilizing and indeed beginning to stage a mild recovery against the greenback. Our view of a more favorable backdrop for the Australian dollar as 2018 progresses is primarily informed by the relative monetary policy outlooks for the United States and Australia.” “We would not expect a significant and sudden turn from trend weakness to trend strength in the Australian dollar against the greenback, as eventual tightening from the RBA is likely to be gradual in nature.”
 

The USD/JPY pair rose to a daily high at 111.70 following today's macro data from the United States but lost momentum there as the market's focused sh

The USD/JPY pair rose to a daily high at 111.70 following today's macro data from the United States but lost momentum there as the market's focused shifted to the UN Security Council meeting on the situation in North Korea. After a mild pullback, the pair is now trading at 111.45, up 0.15% on the day. Following his meeting with Chinese Foreign Minister Wang Yi, U.S. Secretary of State Rex Tillerson said that the situation with North Korea has reached a very dangerous level and argued that the threat of a nuclear attack on Japan and South Korea were real.British PM May: North Korean missile tests represent threat to global peace and stabilityEarlier in the day, in an exclusive interview with Reuters, U.S. President Trump suggested that although his administration was looking for ways to take control of the situation through economic sanctions, there was a chance that the U.S. could end up having a major conflict with North Korea.  Despite the fluctuation witnessed in the NA session, the USD/JPY pair is still trading in a three-day-old trading range between 111 and 111.80. Today's mixed data helped the greenback retrace some of its losses against its rivals but the US Dollar Index is yet to make a decisive break above the 99 handle. Following the sharp fall after the first round of French election, the Index failed to make a daily close above 99 and is now at 98.88, losing 0.14% on the day.Technical outlookThe initial hurdle for the pair aligns at 112 (psychological level) ahead of 112.70 (100-DMA) and 113.50 (Mar. 17 high). On the flip side, with a break below 111 (lower band of the recent trading range) the pair could target 110.35 (Apr. 5 low) and 110 (psychological level/200-DMA).   

United States Baker Hughes US Oil Rig Count up to 697 from previous 688

United States Baker Hughes US Oil Rig Count: 97 vs previous 688

USD/CAD continued to move to the upside and for the second day in a row reached multi-month highs. During the American session, the pair climbed...

USD/CAD continued to move to the upside and for the second day in a row reached multi-month highs. During the American session, the pair climbed to 1.3696, the highest level since February 2016. From the highs, it pulled back and it is trading at 1.3665, rising for the sixth day in a row.  The Loonie remained unaffected by US and Canadian economic data. Yesterday it made a modest recovery despite the rebound in crude oil prices. Today the WTI barrel is falling marginally, down 0.06% at $48.95.  Today’s GDP data in Canada came in line with expectation. It showed a 0.0% growth rate in February. In the US, according to the first estimate, the economy expanded at a 0.7% rate, below the 1.0% expected. The data had a minor impact on the market.  Canada: GDP was unchanged in February following three months of growth US: Real GDP increased at an annual rate of 0.7% in the first quarter of 2017Technical levels USD/CAD showed overbought reading in many time frame and indicators, but so far, no major signals of a correction. The short-term trend remains bullish, reinforced by the break of the 1.3600 zone.  To the upside, the immediate barrier is the 1.3700 handle. Above the next resistance level might be seen at 1.3735 (Feb 25, 2016 high) and 1.3780 (Feb 09 low). On the flip side, support could be located at 1.3645 (20-hour moving average), 1.3620 (daily low) and 1.3580/85. 
 

According to the latest IFOP poll, Macron is seen beating Le Pen in the second round 60% to 40% (prev. 60.5% vs. 39.5%).

According to the latest IFOP poll, Macron is seen beating Le Pen in the second round 60% to 40% (prev. 60.5% vs. 39.5%).

Reuters just released key highlights from the latest S&P report on Germany: Germany 'AAA/A-1+' ratings affirmed; outlook stable Germany's diversif

Reuters just released key highlights from the latest S&P report on Germany: Germany 'AAA/A-1+' ratings affirmed; outlook stable Germany's diversified and competitive economy will sustain current growth momentum, predominantly supported by strong domestic demand Stable outlook reflects view that over next 2 years, Germany's public finances, balance sheet to continue to withstand potential economic shocks Another grand coalition is most likely parliamentary election outcome Germany's surpluses on external and fiscal balance sheet will enable the country to weather external shocks Despite potential tax reductions, other pre-election promises, expect germany's fiscal performance will remain a ratings strength in medium term

According to the Federal Reserve Bank of New York Staff Nowcast report, today’s advance estimate of GDP growth for 2017:Q1 from the Commerce Departmen

According to the Federal Reserve Bank of New York Staff Nowcast report, today’s advance estimate of GDP growth for 2017:Q1 from the Commerce Department was 0.7%, substantially weaker than the latest FRBNY Staff Nowcast of 2.7%. This week’s positive news from manufacturing and housing data pushed up the 2017:Q2 nowcast by 0.2 percentage point to 2.3%.

Marc Chandler, Global Head of Currency Strategy at Brown Brothers shares his views on the emerging markets: "Moody's moved the outlook on Vietnam’s B

Marc Chandler, Global Head of Currency Strategy at Brown Brothers, shares his views on the emerging markets: "Moody's moved the outlook on Vietnam’s B1 rating from stable to positive.  The agency said the main factors for the move were strong FDI inflows coupled with ongoing economic reforms, which is seen leading to continue macroeconomic stability.  An upgrade is long overdue, as both S&P and Fitch already have Vietnam at BB-."   "Nigeria’s central bank introduced a new FX window for portfolio investors.  Some foreign purchases of NGN through this window have reportedly been executed at a rate above 400 per USD, which is well above both the official (315) and black market (385) rates.   This is a good sign.  Governor Emefiele said the bank will let the market determine the exchange rate, though we believe it will still be managed when needed."   "Moody’s moved the outlook on Romania’s Baa3 rating from positive to stable.  The agency cited expansionary fiscal policy as a major factor behind the negative move, as it will likely lead to an upward trajectory for the debt/GDP ratio." "Central Bank of Russia accelerated its easing cycle.  After restarting the cycle with a 25 bp cut in March, the bank cut rates by a larger than expected 50 bp in April.  We think the strong ruble was the deciding factor in the cut after Putin talked down the currency recently." "Central Bank of Turkey delivered a hawkish surprise.  It hiked the Late Liquidity Window (LLW) rate by 50 bp, while no change was expected.  All other rates were left steady, but the bank has made banks utilize the LLW and so that rate has become more important with regards to policy.  The bank has already snugged the weighted average COF for Turkish banks higher." "Brazil’s lower house easily approved the labor reforms, but popular resistance is rising.  The vote was 296-177 in favor, which was more than needed.  Note that 308 votes will be necessary to pass pension reforms, which will face even greater resistance.  Indeed, protests and strikes have erupted this week in opposition to the reforms even as unemployment rose to a record high 13.7% in March."   

The XAU/USD pair dropped to a session low at $1263.70 following the Consumer Sentiment data from the United States but quickly recovered as the latest

The XAU/USD pair dropped to a session low at $1263.70 following the Consumer Sentiment data from the United States but quickly recovered as the latest headlines suggested that the geopolitical tension continued to rise with North Korea. As of writing, the XAU/USD was trading at $1267.75, 0.26% up on the day. On Friday, U.S. Secretary of State Rex Tillerson said called upon the U.N. to implement sanctions and suspend diplomatic relations with North Korea and added that all options of responding to future provocation by North Korea remain on the table. Also speaking at the U.N. meeting, UK Prime Minister Theresa May noted that they would continue to work with international partners to maintain pressure on North Korea.U.S. Secretary of State Tillerson: Threats of nuclear attack on Japan and South Korea 'are real'British PM May: North Korean missile tests represent threat to global peace and stability Boosted by the increasing demand for safe havens, the precious metal gathered strength against the greenback and inched closer to $1270, where a strong resistance have formed after continuous failed attempts.  On the other hand, despite a renewed buying interest surrounding the greenback, the US Dollar Index is having a difficult time moving above the 99 handle and is further supporting XAU/USD's recent upsurge. At the moment, the DXY is at 98.90, down 0.12% on the day.Technical outlookWith a clean break above $1270, the XAU/USD could aim for $1288 (Apr. 21 high) and $1295 (Apr. 17 high). To the downside, $1260 (Apr. 26 low) could be seen as the first support ahead of $1249 (50-DMA) and $1239 (200-DMA).

Analysts from Wells Fargo, explained that today’s Q1 GDP report showed lower than expected numbers reflecting, in part, significantly slower...

Analysts from Wells Fargo, explained that today’s Q1 GDP report showed lower than expected numbers reflecting, in part, significantly slower consumer spending growth and a sizeable inventory drag. They still expect a strong rebound in Q2. Key Quotes: “Hampered by perennial residential seasonality issues and one-off items, which have materially factored into the calculation, the first quarter of each year in this expansion cycle has more times than not resulted in a lower than-trend GDP growth performance. That turns out to be the case this year as U.S. real GDP increased at a modest 0.7 percent annualized rate in Q1, down from the 2.1 percent gain registered in Q4 2016.”“Weakness was primarily centered on a much slower pace of consumer spending. After registering a strong 3.5 percent gain in Q4, real consumer spending advanced just 0.3 percent in Q1, the weakest annualized pace of growth since Q4-2009.” “With the Q1 growth performance unfolding largely as expected, we remain confident with our rebound call for Q2. Since 2000, Q1 U.S. GDP has averaged 1.0 percent, followed by an average growth print of 2.6 percent in Q2. Business/consumer sentiment continues to suggest the weakness in Q1 was not the start of a new trend. On early signs of strengthening consumer spending, resilient BFI and residential construction activity, and incorporating a modest drag from trade, conditions continue to suggest U.S. GDP will rebound solidly in Q2–our current call stands at 2.9 percent.”
 

EUR/GBP pulled back during the American session and erased all gains. The pair is trading at 0.8415/20, slightly above Asian... EUR unabl

EUR/GBP pulled back during the American session and erased all gains. The pair is trading at 0.8415/20, slightly above Asian session lows. EUR unable to hold The euro jumped earlier today after the release of Eurozone inflation data, that showed higher-than-expected numbers. EUR/GBP peaked at 0.8461. Then it consolidated between 0.8435 and 0.8455 before breaking to the downside on American hours. So far, the recent decline has been capped above 0.8410 (daily low).  The pair is still higher compared to the level it closed a week ago. It still has a bullish gap (between last Friday’s closing price and the weekly opening). The euro opened the week sharply higher following French presidential elections.  UK Q1 2017 prelim GDP grows at the slowest rate since Q1 2016 Eurozone: Stronger than expected preliminary April CPI numbers – BBHEUR/GBP technical outlook The pair is testing the short-term support area at 0.8410, a break lower would expose 0.8400. Below, the pair could attempt to close the mentioned gap with a decline to 0.8370. The key medium-term support could be seen around the 0.8300 handle.  On the opposite direction, resistance might be located at 0.8460 (daily high / Apr 17 low), 0.8510 (Apr 6 low / Apr 24 high) and 0.8530 (weekly high).

U.S. House begins to vote to extend the deadline until May 5 for passing a spending bill to avert a government shutdown, reports Reuters. Majority

U.S. House begins to vote to extend the deadline until May 5 for passing a spending bill to avert a government shutdown, reports Reuters. Majority of U.S. house votes to avert government shutdown with one-week extension of federal funds; voting continues

EUR/USD retreated further after the release of US consumer sentiment data and fell to 1.0895. Currently is back above 1.0900, still hovering above the

EUR/USD retreated further after the release of US consumer sentiment data and fell to 1.0895. Currently is back above 1.0900, still hovering above the 20-hour moving average.  The pair peaked at 1.0946 before the release of US Q1 GDP data. Then it turned to the downside and slide further after the US consumer sentiment report showed a rise from 96.9 to 97, below the 98 expected by analyst.  US: Real GDP increased at an annual rate of 0.7% in the first quarter of 2017 US: Consumer sentiment eases to 97 in final (Apr) reading - UoM The pair is still higher for the day and it stands at 1.0905, far from the highs and 200 pips above the level it had a week ago. The recent decline was boosted by a recovery of the US dollar across the board. The DXY trimmed losses during the American session, after bouncing from 98.55 to 98.90.  The euro remains among the top performers in the currency market on Friday and also during the week. Most gains on Friday came after the release of Eurozone inflation data.  Eurozone: Stronger than expected preliminary April CPI numbers – BBHTechnical levels To the upside, short-term resistance levels might be located at 1.0920, 1.0945/50 (weekly high) and 1.0985. On the opposite direction, support might now lie at 1.0890 (20-hour moving average), 1.0850/55 (Apr 26, 27 & 28 low) and 1.0830. 

U.S. Secretary of State Rex Tillerson crossed the wires, via Reuters, suggesting that failing to act now on the most pressing security issue in the wo

U.S. Secretary of State Rex Tillerson crossed the wires, via Reuters, suggesting that failing to act now on the most pressing security issue in the world may bring catastrophic consequences.Key quotes (via Reuters):Tillerson urges U.N. security council to act 'before North Korea does' Tillerson calls on U.N. to implement sanctions, suspend or downgrade diplomatic relations with North Korea Will not hesitate to impose sanctions on third party individuals or parties that have ties with North Korea 'Business as usual' is not an option on North Korea Catastrophic effects of nuclear strike by North Korea outweigh economic benefits All options of responding to future provocation by North Korea must remain on the table Diplomatic, financial measures will be backed up by willingness to counteract North Korean aggression with military action if necessary For years North Korea has dictated terms of its 'dangerous course of action and it's time for us to retake control of the situation'

UK Prime Minister Theresa May is crossing the wires, via Reuters, saying that they will work with international partners to maintain pressure on North

UK Prime Minister Theresa May is crossing the wires, via Reuters, saying that they will work with international partners to maintain pressure on North Korea.Key quotes (via Reuters):Have reaffirmed with Japan's Abe our commitment to free trade This is not the time for the UK to step back from the world Have told Japan's Abe that we are determined to remain the best place in Europe for companies to do business Agreed with Japan's Abe that we need to stand firm in face of Russia's destabilising activity Have highlighted our opposition to any activity on the south and east China Sea that is likely to increase tension Agreed with Japan's Abe that North Korea continues to take provocative action We stand steadfast in our condemnation of such destabilising activity North Korean missile tests represent threat to global peace and stability Will work with international partners to maintain pressure on North Korea

The USD/CHF pair started a recovery move during the first trading hours of the American session as the PCE data came in above expectations and gained

The USD/CHF pair started a recovery move during the first trading hours of the American session as the PCE data came in above expectations and gained further momentum following the consumer confidence figures. Driven by the USD strength, the pair took back its daily losses and is now trading flat at 0.9940. Investors largely ignored the weaker than expected real GDP growth from the U.S. for the first quarter of 2017 and reacted to the Personal Consumption Expenditures, which rose to 2.4% from 2% in Q1. Additionally, the Michigan Consumer Sentiment Index eased to 97 in April final reading, but the details of the report revealed that the consumer spending in 2017 is expected to grow at about a 2.5% pace.US: Consumer sentiment eases to 97 in final (Apr) reading - UoMAfter falling to 98.60 in the European session, the US Dollar Index, boosted by the data, rose to 98.96. At the moment, the index is at 98.90, still down 0.12% on the day.Technical outlook0.9985 (200-DMA) remains as the first important technical resistance for the pair ahead of 1.0000 (psychological level) and 1.0030 (100-DMA). On the downside, with a break below 0.9890 (daily low), the pair could aim for 0.9810 (Mar. 27 low) and 0.9735 (Nov. 8 low).

Brazil Nominal Budget Balance fell from previous -54.24B to -54.349B in March

Brazil Primary Budget Surplus rose from previous -23.5B to -11.047B in March

After bottoming out in the 99.60 region, the US Dollar Index (DXY) has regained some buying interest and it is now flirting with the 99.00 handle. US

After bottoming out in the 99.60 region, the US Dollar Index (DXY) has regained some buying interest and it is now flirting with the 99.00 handle.US Dollar up despite dataThe index has almost recovered the ground lost earlier in the session in spite of mixed results from the US docket today. Advanced US GDP figures showed the economy is expected to expand at an annualized 0.7% during the January-March period, less than initially forecasted. In addition, the Chicago PMI surprised to the upside for the month of April (58.3 act. vs. 56.5 exp.), while the final print of April’s Consumer Sentiment tracked by the Reuters/Michigan Index came in at 97.0 vs. the preliminary reading at 98.0.DXY stays firmly on its way to close the third consecutive week in red figures, including Monday’s gap lower and a breakdown of the critical 99.00/98.90 region, where sit the 200-day sma and the 11-month support (resistance) line. USD should remain under pressure ahead in the day, as the probability of a Federal shutdown stays alive unless the Congress pass a continuing resolution later in the day. Market consensus, however, seems to lean on a last-minute deal for the time being.US Dollar relevant levelsThe index is down 0.11% at 98.91 facing the next support at 98.58 (low Apr.28) followed by 98.56 (2017 low Apr.25). On the flip side, a break above 99.21 (high Apr.27) would aim for 99.24 (high Apr.24) and finally 99.59 (38.2% Fibo of the April drop).

Consumer sentiment continued to travel along the high plateau established following Trump's election, with only minor deviations from its five-month a

Consumer sentiment continued to travel along the high plateau established following Trump's election, with only minor deviations from its five-month average of 97.4, said Richard Curtin, Surveys of Consumers chief economist.Key quotes:There was widespread agreement among consumers on their very positive assessments of the current state of the economy as well as widespread disagreement on future economic prospects Favorable economic developments were cited by nearly all Republicans in April, while three-quarters of Democrats reported hearing negative news about the economy The level of optimism among Independents, who account for 42% of all consumers, points toward continued growth in consumer spending in 2017 at about a 2.5% pace

United States Michigan Consumer Sentiment Index registered at 97, below expectations (98) in April

Major US equity indices witnessed a mixed opening on the last trading day of the week as investors digested dismal US GDP print, showing the slowest p

Major US equity indices witnessed a mixed opening on the last trading day of the week as investors digested dismal US GDP print, showing the slowest pace of growth in 3 years. According to the advance GDP report, the US GDP increased at a meager 0.7% annual pace in the first three months of 2017. The growth was much lower than 2.1% recorded in the last quarter of 2016 and lower-than consensus estimates, but market reaction to the report seemed muted as investors preferred to remain on the sideline in wake of a possible government shutdown. Meanwhile, a goodish recovery in oil prices lifted energy stocks and helped limit any immediate corrective slide, at least for the time being.  At the time of writing, the Dow Jones Industrial Average down around 9-points to 20972, while the broader S&P 500 Index was little changed from yesterday's close at 2,388. Meanwhile, strong tech earnings propelled the Nasdaq to a fresh record high level of 6,060, up nearly 10-points.

United States Chicago Purchasing Managers' Index registered at 58.3 above expectations (56.4) in April

After testing highs near $49.80, prices for the barrel of West Texas Intermediate have now returned to the $49.35/30 band. WTI up on OPEC rumours, oi

After testing highs near $49.80, prices for the barrel of West Texas Intermediate have now returned to the $49.35/30 band.WTI up on OPEC rumours, oil rig count on sightPrices for the WTI regained buying interest following rising hopes of an extension of the OPEC/non-OPEC output cut deal beyond June. Saudi Oil Minister said earlier on Friday that it is important to agree on an extension of the agreement, while his Russian peer Novak said the country will define its position on the matter at the May 24 meeting. Rumours have helped prices to revert the recent bearish trend and to remove some scepticism over the effectiveness of the ongoing deal to balance the oil market. Later in the day, driller baker Hughes will publish its weekly report on US oil rig count (+5 to 688 active rigs prev.).WTI levels to considerAt the moment the barrel of WTI is gaining 0.76% at $49.34 and a surpass of $49.59 (61.8% Fibo of the March-April rally) would aim for $50.20 (high Apr.26) and finally $51.09 (20-day sma). On the downside, the immediate barrier emerges at $48.45 (78.6% Fibo of the March-April rally) followed by $48.20 (low Apr.27) and then $47.01 (2017 low Mar.22).

Russia's energy minister Novak crossed the wires, via Reuters, stating that they would define their position on the extension of oil output cut by May

Russia's energy minister Novak crossed the wires, via Reuters, stating that they would define their position on the extension of oil output cut by May 24.

The AUD/USD pair failed to build on early recovery move and has now slipped into negative territory for the fourth consecutive session. Spot ran thro

The AUD/USD pair failed to build on early recovery move and has now slipped into negative territory for the fourth consecutive session. Spot ran through fresh offers during early NA session and moved back within striking distance of 3-1/2 month lows touched in the previous session. The pair latest leg of downslide could be attributed to a fresh wave of up-surge in the US treasury bond yields, which tends to underpin the greenback demand and drive flows away from higher-yielding currencies - like the Aussie. Despite of the disappointing headline Q1 US GDP number, showing a dismal growth of 0.7% annualized growth, GDP Price Index and Employment Cost Index both pointed to prevailing inflationary pressures in the economy. Higher inflation expectations revived hopes for additional Fed rate-hike move through 2017 and helped the key US Dollar index to bounce of multi-month lows touched earlier during the day.  Apart from the advance GDP print, the US economic docket also features the release of Chicago PMI and Revised UoM Consumer Sentiment, which would now be looked upon for some fresh trading impetus.Technical levels to watchJim Langlands, Principal at FX Charts writes, “the dailies still look pretty neutral so cautious stance is required but the 4 hour momentum indicators are pointing lower, so a retest of 0.7440 seems possible, below which would then find only minor support until we reach 0.7385. On the topside, the initial resistance will be seen at Thursday’s high (0.7491) and then again at 0.7510 and 0.7525.”

After rising to a fresh seven-month high at 1.2955, the GBP/USD pair went into a consolidation phase and stayed in a narrow range until the release of

After rising to a fresh seven-month high at 1.2955, the GBP/USD pair went into a consolidation phase and stayed in a narrow range until the release of the US data. Despite the mixed data, the greenback gained momentum against its competitors and pushed the GBP/USD back towards the 1.29 handle. As of writing, the pair was trading at 1.2905, still up 0.02% on the day.UK Q1 2017 prelim GDP grows at the slowest rate since Q1 2016The data released by the U.S. Bureau of Economic Analysis revealed that the real GDP growth eased to 0.7% in the first quarter of 2017, missing the expectation of 1.2%. Despite the dismal GDP data, boosted by the PCE numbers, the US Dollar Index quickly erased its daily losses and is now making another attempt towards 99. At the moment, the DXY is down 0.12%, at 98.90. Personal Consumption Expenditures, released by US Department of Commerce, for Q1 (QoQ) rose to 2.4% from 2% and beat the consensus of 2.3%, suggesting that the inflation has been accelerating. Furthermore, the Employment Cost Index (ECI) also rose by 0.8%, pointing to an increasing wage inflation. The Chicago Purchasing Managers Index and the Michigan Consumer Sentiment Index numbers from the U.S. are coming up next in the session. The DXY movement could remain as the primary driver of the pair's price action.Technical outlookThe initial hurdle for the pair aligns at 1.2955/60 (daily/Oct. 4 high) ahead of 1.30 (psychological level) and 1.3060 (Sept. 28 high). On the flip side, supports could be seen at 1.2900 (psychological level), 1.2840 (Apr. 27 low) and 1.2760 (Apr. 21 low).

Belgium Gross Domestic Product (QoQ) remains unchanged at 0.5% in 1Q

The EUR/USD pair once again failed to break through the 1.0950 important hurdle and has now retreated back to 1.0910 region post US GDP report. Spot

The EUR/USD pair once again failed to break through the 1.0950 important hurdle and has now retreated back to 1.0910 region post US GDP report. Spot ran through some fresh offers despite of a yet another disappointment from the US macro that showed economy recorded a tepid growth of 0.7% (annualized rate) during the first quarter of 2017. The growth rate was not only worse than 2.1% recorded in the previous quarter but also fell short of 1.2% expected. US: Real GDP increased at an annual rate of 0.7% in the first quarter of 2017Looking at additional details, a higher-than-expected rise in GDP Price Index and Employment Cost remained supportive of inflationary pressure in the economy and prospects for additional Fed rate-hike action through 2017. The expectations were being reinforced by the post-data up-surge in the US treasury bond yields.  Rising bond yields underpinned the US Dollar demand and collaborated to the pair's retracement from closer to 5-1/2 month tops touched in the aftermath of upbeat Euro-zone CPI print. Next on tap would be the release of Chicago PMI and Revised UoM Consumer Sentiment, which would now be looked upon for some fresh trading impetus. Technical outlook“The next strong resistance comes at 1.0950, the weekly high and the level to surpass to see a stronger upward momentum, with 1.1000 and 1.1045 being the next short term bullish targets. 1.0850 on the other hand is the immediate short term support, followed by 1.0820, the weekly low. Below this last, the downside potential will firm up, with scope to extend the decline to 1.0730, where the pair will finally fill the weekly opening gap” writes Valeria Bednarik, Chief Analyst at FXStreet.

The Industrial Product Price Index rose 0.8% in March, mainly due to higher prices for motorized and recreational vehicles and primary non-ferrous met

The Industrial Product Price Index rose 0.8% in March, mainly due to higher prices for motorized and recreational vehicles and primary non-ferrous metal products, said Statistics Canada on Thursday. The Raw Materials Price Index decreased 1.6%, primarily due to lower prices for crude energy products. The IPPI (+0.8%) increased for a seventh consecutive month in March, following a 0.3% gain in February. This was the largest increase since June 2016. Of the 21 major commodity groups, 20 were up and 1 was down.

USD/JPY has now accelerated the daily upside, printing fresh daily highs in the 111.70 area following US data releases. USD/JPY moves higher on US yi

USD/JPY has now accelerated the daily upside, printing fresh daily highs in the 111.70 area following US data releases.USD/JPY moves higher on US yieldsSpot gathered extra pace after yields in the US money markets jumped to session highs following today’s data releases in the US calendar, where advanced GDP figures showed the economy is expected to expand at an annualized 0.7% during the January-March period, less than initially forecasted. In fact, the US 10-year benchmark advanced to 2-day peaks in the boundaries of 2.34%, just to recede to the current 2.33% region soon afterwards. Additional results saw Employment Cost Index rising 0.8% during the first quarter vs. a 0.6% gain forecasted and up from the previous 0.5% gain. Later in the session, the Chicago PMI is due seconded by the final print of the Reuters/Michigan Index for the month of April.USD/JPY levels to considerAs of writing the pair is gaining 0.31% at 111.62 and a surpass of 111.81 (50% Fibo of 115.51-108.11) would aim for 111.94 (55-day sma) and then 112.20 (high Mar.31). On the other hand, the next support aligns at 110.94 (38.2% Fibo of 115.51-108.11) followed by 110.85 (low Apr.26) and finally 110.04 (20-day sma).

Gross domestic product was unchanged in February following three months of growth said Statistics Canada on Thursday. Gains in service-producing in

Gross domestic product was unchanged in February following three months of growth said Statistics Canada on Thursday. Gains in service-producing industries were offset by declines in goods-producing industries Service-producing industries were up 0.2% in February following a 0.5% gain in January, the highest monthly growth rate since January 2013. Goods-producing industries were down for the first time since October, declining 0.3% in February.

Turkey Foreign Arrivals increased to -4% in March from previous -6.51%

The USD/CAD pair trimmed some of its early gains closer to multi-month tops, albeit has managed to hold in positive territory following macroeconomic

The USD/CAD pair trimmed some of its early gains closer to multi-month tops, albeit has managed to hold in positive territory following macroeconomic releases.  Currently trading around 1.3640 region, the pair had a muted reaction to US data showing that the economy registered a growth of 0.7% annualized growth during the first quarter of 2017. The growth was worse than previous quarter's 2.1% and lower-than estimates pointing to a reading of 1.2%. The data further fueled concerns of a sharp economic slowdown and did little to provide any immediate respite for the US Dollar bulls.  On the other hand, the monthly Canadian economic activity remained flat on a monthly basis during Feb., which was on expected lines and eased some of the bearish pressure surrounding Canadian Dollar. Adding to this, a rebound in oil prices, with WTI crude oil trading with gains in excess of 1.0% further extended support to the commodity-linked currency – Loonie, and collaborated towards capping further up-move, just below the highest level since late-Feb. 2016. Friday's US economic docket also features the release of Chicago PMI and Revised UoM Consumer Sentiment, which although is unlikely to hinder the pair strong bullish momentum but might provide opportunities for short-term traders. Technical levels to watchA follow through buying interest beyond 1.3665-70 area should lift the pair towards reclaiming the 1.3700 handle and open room for continuation of the upward trajectory further towards its next major hurdle near 1.3770-80 region. On the downside, retracement back below the 1.3600 handle might prompt additional profit taking slide towards 1.3570 level ahead of 1.3540-35 strong horizontal support.

Real gross domestic product (GDP) increased at an annual rate of 0.7 percent in the first quarter of 2017, according to the "advance" estimate release

Real gross domestic product (GDP) increased at an annual rate of 0.7 percent in the first quarter of 2017, according to the "advance" estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2016, real GDP increased 2.1 percent. The increase in real GDP in the first quarter reflected positive contributions from nonresidential fixed investment, exports, residential fixed investment, and personal consumption expenditures (PCE), that were offset by negative contributions from private inventory investment, state and local government spending, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP in the first quarter reflected a deceleration in PCE and downturns in private inventory investment and in state and local government spending that were partly offset by an upturn in exports and accelerations in both nonresidential and residential fixed investment.

Canada Industrial Product Price (MoM) came in at 0.8%, above expectations (0.3%) in March

United States Core Personal Consumption Expenditures (QoQ) in line with forecasts (2%) in 1Q

United States Employment cost index came in at 0.8%, above forecasts (0.6%) in 1Q

United States Personal Consumption Expenditures Prices (QoQ) above forecasts (2.3%) in 1Q: Actual (2.4%)

United States Gross Domestic Product Price Index came in at 2.2%, above expectations (2%) in 1Q

United States Gross Domestic Product Annualized below forecasts (1.2%) in 1Q: Actual (0.7%)

Canada Raw Material Price Index came in at -1.6%, below expectations (-0.4%) in March

Canada Gross Domestic Product (MoM) in line with forecasts (0%) in February

USD/JPY could reach the 112.20 area in the next weeks, suggested FX Strategists at UOB Group. Key Quotes “USD traded sideways as expected albeit at

USD/JPY could reach the 112.20 area in the next weeks, suggested FX Strategists at UOB Group.Key QuotesUSD traded sideways as expected albeit at a much narrower range than anticipated. The consolidation appears incomplete and we continue to expect range trading for now, likely between 111.00 and 111.70”. “The short-term consolidation phase is still intact and USD could continue to trade sideways for another 1 to 2 days before pushing higher towards 112.20. In other words, there is no change to the bullish view. Stop-loss us unchanged at 110.30 as well”.  

Axel Rudolph, Senior Technical Analyst at Commerzbank, noted Cable’s outlook remains bullish while above 1.2609 in the medium term. Key Quotes “Ster

Axel Rudolph, Senior Technical Analyst at Commerzbank, noted Cable’s outlook remains bullish while above 1.2609 in the medium term.Key QuotesSterling remains short term bid while trading above Friday’s low at 1.2760. We will remain medium term bullish while the currency pair stays above the 200 day ma at 1.2609. We allow for further strength to the 55 week ma at 1.2988 to be seen once a rise above the current April high at 1.2930 has been witnessed. Between it and the 1.3000 mark it is likely to run out of steam, however, at least temporarily”. “Below 1.2613 would trigger a slide back to 1.2515, the April 18 low and the 1.2347 February low”.

In an exclusive interview with Reuters on Thursday, U.S. President Donald Trump said that there was a chance that the U.S. could end up having a major

In an exclusive interview with Reuters on Thursday, U.S. President Donald Trump said that there was a chance that the U.S. could end up having a major conflict with North Korea.Key quotes (via Reuters):We'd love to solve things diplomatically but it's very difficult My administration is emphasizing by preparing a variety of new economic sanctions while not taking the military option off the table

The buying interest around the single currency remains well and sound at the end of the week, with EUR/USD now deflating from tops near 1.0950 ahead o

The buying interest around the single currency remains well and sound at the end of the week, with EUR/USD now deflating from tops near 1.0950 ahead of the opening bell in the NA session.EUR/USD looks to US docketSpot gained around a cent since daily lows in the mid-1.0800s to the vicinity of 1.0950 backed by a renewed and strong offered bias around the greenback, with the US Dollar Index re-testing recent lows near 98.60. The pair has been also well supported by higher-than-expected inflation figures in the region, as the CPI is seen rising at an annualized 1.9% during April. Core prices are expected to rise 1.2% over the last twelve months, also coming in above estimates. In the US data front, the first revision of Q1 GDP figures is due seconded by the Chicago PMI, Q1 PCE and the final gauge of April’s Consumer Sentiment.EUR/USD levels to watchAt the moment, the pair is gaining 0.52% at 1.0930 and a break above 1.0947 (high Apr.28) would target 1.0951 (2017 high Apr.25/26) en route to 1.1000 (psychological handle). On the downside, the immediate support aligns at 1.0850 (low Apr.27) seconded by 1.0833 (200-day sma) and finally 1.0805 (23.6% Fibo of the April rally).

The research team at Nomura suggests that the release of Q1 GDP, consumer sentiment, Chicago PMI and employment cost index data in the upcoming US ses

The research team at Nomura suggests that the release of Q1 GDP, consumer sentiment, Chicago PMI and employment cost index data in the upcoming US session will keep investors engaged today.Key QuotesQ1 GDP, first estimate: With spending data pointing to decelerating economic growth, we expect the BEA to report that Q1 GDP growth slowed to 0.2% q-o-q saar (Consensus: 1.0%) from 2.1% in Q4. Based on data that came out this week, our Q1 estimate was lowered by 0.8pp from our previous forecast of 1.0%. Although several special factors cloud the Q1 picture and increase the uncertainty surrounding our Q1 forecast the weakness cannot be entirely dismissed.”“Employment cost index, Q1: Wage growth during Q1 2017 slowed somewhat compared to previous quarters on a y-o-y basis. Average hourly earnings growth for production and nonsupervisory workers slowed slightly to 2.4% y-o-y in Q1 from 2.5% in Q4. By contrast, labor markets remain tight as payrolls have increased by an average of 178k during Q1 2017 and the ratio of vacancies to unemployed workers has increased over the past few quarters. We expect the wages and salaries index of the ECI report to have increased 0.5% q-o-q in Q1, resulting in a 2.1% y-o-y increase. This pace is slightly below the average for 2016 but in line with recent trends in average hourly earnings. Our expectation for ECI total compensation (of which 70% comes from wages and salaries) is a 0.5% q-o-q increase (Consensus: 0.6%), which translates to 2.1% y-o-y.”“Chicago PMI: This index reached 57.7 in March, a slight increase from 57.4 in February, suggesting that manufacturers’ optimism continued. In April, however, other regional manufacturing surveys showed sharp moderation in sentiment. Both the Empire State manufacturing survey and the Philly Fed survey posted a notable decline. Although still at high readings, the latest prints of these surveys suggest there may be some pullback in business sentiment which has surged strongly since the election despite a lack of notable improvement in spending. It is also possible that continued policy uncertainty has adversely affected business sentiment. Altogether, we forecast that the Chicago PMI inched down to 56.0 in April, slightly lower than the elevated reading in March (Consensus: 56.2).”“University of Michigan consumer sentiment: April’s preliminary reading from the University of Michigan indicated a slight uptick in consumer sentiment, from 96.9 in March to 98.0. There remains a deep partisan divide within the survey as Democrats and Republicans continue to view future economic conditions in diametrically opposed ways. With continued political partisanship, it is possible that lingering policy uncertainty, or even potential policy disappointments, would affect consumer sentiment materially. Consensus expects the final reading to be unchanged from 98.0. Median 1-year and 5-10 year ahead inflation expectations remained unchanged at 2.5% and 2.4%, respectively in the preliminary reading. While 1-year ahead inflation expectations have decreased across the distribution of respondents (with similar decreases seen in the 25th and 75th percentiles), 5-10 year ahead inflation expectations for the 75th percentile have decreased much more substantially compared to the median and 25th percentile, indicating some tightening in the distribution.”

According to the latest Q1 earning reports from the United States, via LiveSquawk: LyondellBasell Industries Q1 17 Earnings Results: -Adj EPS: $2.0

According to the latest Q1 earning reports from the United States, via LiveSquawk: LyondellBasell Industries Q1 17 Earnings Results: -Adj EPS: $2.00 (Estimate $2.33) -Revenue: $8.43B (Estimate $7.83B) Phillips 66 Q1 17 Earnings Results: -Adj EPS: $1.02 (Estimate $0.03) -Revenue: $23.7B (Estimate $22.30B) General Motors Q1 17 Earnings Results: -Adj EPS: $1.70 (Estimate $1.47) -Revenue: $41.2B (Estimate $40.5B) Exxon Mobil Q1 17 Earnings Results: -Adj EPS: $0.95 (Estimate $0.85) -Revenue: $63.29B (Estimate $68.78B)

Chile Unemployment rate rose from previous 6.4% to 6.6% in March

Chief Analyst at Danske Bank Arne Rasmussen noted the pair keeps pointing to a 1.06/1.10 range in the near term. Key Quotes “Despite a minor hawkish

Chief Analyst at Danske Bank Arne Rasmussen noted the pair keeps pointing to a 1.06/1.10 range in the near term.Key Quotes“Despite a minor hawkish twist in the introductory statement following the ECB meeting yesterday, EUR/USD settled more or less unchanged after a brief period of volatile price actions where the cross initially moved up one step up (on 'downside risks diminishing') and then one step down again (on rate hikes off the table for now)”. “EUR/USD still looks like a 1.06 -1.10 range near term, as the Fed will be there to keep some downside potential intact. However, there is clearly a risk that we could see at the June meeting the ECB change its forward guidance in a more hawkish direction provided the cyclical situation still looks good and provided that the inflation outlook has not deteriorated markedly (beyond base effects falling out) – and EUR/USD would be more sensitive to a signal on rates than to a possible extension of QE”.

According to FX Strategists at UOB Group, Cable’s outlook remains in the overbought territory. Key Quotes “We have held the same bullish view that G

According to FX Strategists at UOB Group, Cable’s outlook remains in the overbought territory.Key Quotes“We have held the same bullish view that GBP is “overbought but has room for extension to 1.2950” since last Wednesday”. “The target appears to be within reach and while upward momentum is not as strong as preferred; a break above this level would not be surprising”. “If GBP can close above this level, it would bode well for further extension towards 1.3000 and likely beyond. In order to maintain the current bullish momentum, any short-term pullback should not move back below 1.2800 (level adjusted from 1.2760)”.

Having posted a session high near 0.6890 region, the NZD/USD pair ran through some fresh offers and drifted into negative territory for the fifth cons

Having posted a session high near 0.6890 region, the NZD/USD pair ran through some fresh offers and drifted into negative territory for the fifth consecutive session. The pair extended its bearish slide through the course of current trading week and is now headed back to nearly 10-month lows touched in the previous session, despite of the prevalent negative sentiment surrounding the greenback.  In fact, the key US Dollar Index has now dropped back closer to 5-month lows touched earlier this week and hence, the latest leg of the pair's downfall in the past hour or so could be solely attributed to rising treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Kiwi. Meanwhile, the recent disappointment from incoming US macro docket has been pointing to a phase of economic slowdown. Hence, further downslide remained limited amid expectations of yet another disappointment from the quarterly growth numbers, due for release in a short while from now.    •  US: Q1 GDP release likely to confirm a slowdown - TDSApart from the advance GDP print, the US economic docket also features the release of Chicago PMI and Revised UoM Consumer Sentiment. Technical levels to watchA follow through weakness below yearly lows support near 0.6850 level is likely to get extended towards testing the 0.6800 handle ahead of 0.6775 horizontal support.  On the flip side, any recovery attempts beyond the 0.6900 handle, leading to a subsequent move above 0.6920 level, is likely to trigger a short-covering rally even beyond near mid-0.6900s back towards the key 0.70 psychological mark.

In view of Senior Technical Analyst at Commerzbank Axel Rudolph, a drop below 1.0683 is needed to allow further pullbacks. Key Quotes “The three mon

In view of Senior Technical Analyst at Commerzbank Axel Rudolph, a drop below 1.0683 is needed to allow further pullbacks.Key Quotes“The three month resistance line at 1.0957 capped EUR/USD as expected with the 200 day moving average at 1.0836 still being in focus”. “For a decline to be seen a fall below Friday’s low at 1.0683 will have to unfold, below which lies the 55 day moving average at 1.0676 and the 2017 support line at 1.0617. Failure at nearby Fibonacci support at 1.0555 should be enough to trigger weakness to the 1.0494 February low, then the 1.0340 January low. Our bias remains toppish”. “A close above the three month resistance line at 1.0957 would put the January 2015 low at 1.1098 on the agenda”.

In view of the analysts at TDS, the advance GDP release from US is likely to confirm a slowdown to a below-trend pace. Key Quotes “We are roughly in

In view of the analysts at TDS, the advance GDP release from US is likely to confirm a slowdown to a below-trend pace.Key Quotes“We are roughly in line with the market consensus and look for a 1.3% print, reflecting sub-par consumer spending and a drag from net exports. The reading would be in stark contrast to relatively bullish survey data, though we note that residual seasonality is partly at play. Because of this, the Fed is likely to look through below-trend Q1 growth given robust labor market conditions.” “US Congress Continuing ResolutionCongress needs to pass another continuing resolution to fund the US federal government by midnight on Friday, April 28, in order to avoid a government shutdown. If the past is any guide, negotiations will drag on to the last minute. A bill that satisfies both House Republicans and Senate Democrats will be difficult. We think an 11th-hour bipartisan agreement will be reached, but a shutdown lasting a few days remains a risk.”

The research team at Westpac, explains that in Q4, US GDP disappointed expectations, coming in at 2.1% annualised as the consumer was solid and reside

The research team at Westpac, explains that in Q4, US GDP disappointed expectations, coming in at 2.1% annualised as the consumer was solid and residential investment bounced back after a weak six months, but business investment was lacklustre.Key Quotes“Had it not been for inventories, the headline outcome would have been subtrend. Come 2017, there were expectations that growth would firm, particularly given the rapid rise of consumer and business confidence. However, partial data points to this not being the case. The market is now forecasting annualised growth only marginally above 1%. We are more positive at 1.6%.” “A softer consumer and still subdued business investment are the key themes. Inventories should subtract. Note that the nowcasts point to risks being greater than normal.”

India Bank Loan Growth up to 5.5% from previous 5.1%

The analysis team at TDS suggests that the Canada’s industry-level growth is forecast to rise by a healthy 0.2% m/m in February after a robust start t

The analysis team at TDS suggests that the Canada’s industry-level growth is forecast to rise by a healthy 0.2% m/m in February after a robust start to the quarter (0.6% in January).Key Quotes“We look for goods-producing industries to drive the moderation, led by a pullback in manufacturing and a weather-related drag from utility output. Oil extraction and construction should continue to firm albeit a softer pace than in January. On the services side, we expect some deceleration driven by minor corrections in retail and wholesale trade and in line the weaker trend in hours worked. Our forecast would lend upside risk to our Q1 GDP tracking toward the upper range of 3%, though not a game changer for the Bank of Canada who has already penciled in a relatively bullish 3.8%.” “Foreign Exchange The simultaneous release of the US and Canadian reports will muddy the signal from the Canadian GDP release. The market expectations for the US report show a nearly 50bp standard deviation with a 25 range in the Bloomberg consensus. The lean is for a softer report with 1% probably the sticking point for a decent number. While this report is highly volatile, backwardlooking, and prone to revisions, a softer headline is likely to weigh on the greenback. This comes of the heels of the Trump tax policy announcement that was lacking details and in turn unlikely to provide much support to the dollar in the nearterm. At the same time, we look for an above consensus print on the Canada side, suggesting further consolidation in USDCAD. Indeed, we believe that the NAFTA premium getting built into the pair is overdone and is disproportionate to the risks of a possible trade war, leaving us to fade the rally in USDCAD ahead of 1.3650. Our preferred trade is to sell AUDCAD, owing to stretched valuation, a shift in terms of trade and extreme levels of positioning.”

Analysts at Danske Bank suggests that today brings US GDP figures for Q1 in addition to the PCE core inflation figures for Q1 in US which are going to

Analysts at Danske Bank suggests that today brings US GDP figures for Q1 in addition to the PCE core inflation figures for Q1 in US which are going to be the most important economic releases for the day.Key Quotes“The Fed Atlanta GDP nowcast shows growth in Q1 of 0.5% q/q AR, soft data indicates growth in the region of 1.5-2.0%. We expect to land somewhere in between and forecast GDP growth of 1.0% q/q AR in Q1.” “We will also get PCE core inflation for Q1. If the current trend in monthly PCE core increases continues (implying increases of around 0.1% m/m), PCE core inflation would come in at 2.2% q/q AR. However, note that although this may give the impression that inflation has reached its target, the Fed is more concerned about PCE core inflation y/y, which will be significantly below 2% almost no matter what the March print comes in at.”

The GBP/USD pair built on to its break-out momentum and moved higher for the fourth consecutive day, rising to the highest level since late-Sept. near

The GBP/USD pair built on to its break-out momentum and moved higher for the fourth consecutive day, rising to the highest level since late-Sept. near mid-1.2900s. After initially wobbling around the 1.2900 handle, a fresh wave of US Dollar selling interest helped the pair to shrug-off dismal UK GDP figures and has been sole driver of the pair's up-move in the past hour of so. In fact, the key US Dollar Index has now dropped back closer to 5-month lows touched earlier this week, despite of a mild up-tick in the US treasury bond yields. Earlier today, data released from the UK showed the economy is expected to register a quarterly growth of 0.3% during the first quarter of 2017, down from 0.7% reported in the previous quarter. Meanwhile, the yearly growth rate is expected to tick higher to 2.1% from previous 1.9%.   •  UK household squeeze hits 1Q growth as GDP grows just 0.3% - INGInvestors now look forward to the advance release of US GDP number for some immediate respite for the US Dollar bulls. Against the backdrop of recent disappointment from the US macro data, disappointing growth numbers should continue to weigh on the greenback and assist the pair to extend its near-term upward trajectory. Apart from the quarterly GDP print, the US economic docket also features the release of Chicago PMI and Revised UoM Consumer Sentiment.   •  US: Focus on Q1 GDP, consumer confidence and Chicago PMI data - BBHTechnical levels to watchFrom current levels, immediate resistance is pegged near 1.2960-70 zone, above which a fresh leg of up-move has the potential to lift the pair beyond the key 1.30 psychological mark towards testing its next major hurdle near 1.3070-80 area in the near-term.  On the flip side, retracement below the 1.2900 handle, leading to a subsequent drop below 1.2885 level, might continued to find some fresh buying interest at a previous resistance, now turned support, near 1.2860-50 zone. Only a decisive break below mid-1.2800s might prompt additional profit taking and negate further bullish bias.

Analysts at BBH points out that Q1 GDP, consumer confidence and Chicago PMI data will be the key economic releases from today’s US session. Key Quote

Analysts at BBH points out that Q1 GDP, consumer confidence and Chicago PMI data will be the key economic releases from today’s US session.Key Quotes“The US reports Q1 GDP.  The median forecast in the Bloomberg survey is for a 1.0% annualized gain.  We suspect the risk is on the downside.  Beginning in 2010, Q1 growth in the US has averaged 1.1%, but our back of the envelope calculation warns that Q1 17 was likely weaker than average.  Outside of the headline shock, it has no implications for monetary policy.  The Federal Reserve hiked rates in March, rendering Q1 data moot.  The FOMC meets next week, and the statement is likely to look past the setback in Q1.  The US jobs report at the end of next week may be of greater importance than the FOMC meeting.”  “The US also sees the Chicago PMI for April and the final University of Michigan consumer confidence and inflation expectations survey.  It is important that the US Congress approves a spending authorization bill or some stop gap measure.  Otherwise, government closure cannot be ruled out.  Separately, although press reports suggest progress on health care, a resolution still seems elusive.  To appease the wing of the Republican Party (Freedom Caucus) that blocked the previous attempt appears to be alienating the moderate wing (e.g. Tuesday Group).”“Canada reports February GDP (expected to have risen by 0.1%).  The weekend sees the EU summit on Brexit.  Reports suggest the EU may press for considering a united Ireland within the EU. Merkel's speech earlier this week underscores the EU's interest in first agreeing to the terms of exit before a new, even if temporary, arrangement, can be made.    Also, ASEAN countries hold a summit as well.”

At its meeting today, the Russian central bank (CBR) has surprised markets reducing its key rate more than expected by 50 bp to 9.25%. The CBR said i

At its meeting today, the Russian central bank (CBR) has surprised markets reducing its key rate more than expected by 50 bp to 9.25%. The CBR said inflation expectations continue to decline, while domestic consumer prices are seen reaching the 4% target at some point before the end of 2017. In addition, the bank noted the economic recovery remains on track. According to the CBR’s statement, “Inflation slowdown was broadly facilitated by the ruble appreciation amid relatively higher oil prices, persistent interest in investment in Russian assets among external investors, and a drop in the sovereign risk premium”. Furthermore, “In order to maintain the propensity to save and anchor sustainable inflation slowdown driven by demand-side restrictions, monetary conditions should remain moderately tight”. Regarding economic growth, the central bank noted “Given the current recovery dynamics and the economy’s growing resilience to the fluctuations in the external economic climate, the Bank of Russia expects that the GDP will grow in 2017-2019 even if the conservative oil price scenario materialises”.

The research team at BBH suggests that Japan's end of the month data dump shows why many expect the BOJ to lag behind the ECB as the March CPI was a t

The research team at BBH suggests that Japan's end of the month data dump shows why many expect the BOJ to lag behind the ECB as the March CPI was a touch softer than expected at 0.2%, and the core rate was steady at 0.2%.  Key Quotes“Excluding food and energy, CPI slipped back into negative territory (-0.1% vs. 0.1%).  Although retail sales ticked up in March (0.2%), overall household spending disappointed.  It fell 1.3% year-over-year, which was more than twice the expected pace, though not as deep as the decline in February.”  “Industrial output was also weaker than expected, falling 2.1% in March, which gives back more of February's 3.2% gain than expected.  The median expectation was for a 0.8% decline.  Lastly, unemployment was unchanged at 2.8%, though the jobs-to-applicant ratio increased to 1.45 from 1.43.”

The Russian Ruble is picking up pace following the CBR meeting, with USD/RUB now testing daily lows in the 56.75/70 band. USD/RUB tumbles to lows on

The Russian Ruble is picking up pace following the CBR meeting, with USD/RUB now testing daily lows in the 56.75/70 band.USD/RUB tumbles to lows on CBRThe pair dropped from highs beyond the 57.00 handle after the Russian central bank (CBR) cut the key rate by 50 bp to 9.25% at today’s meeting, more than the forecasted 25 bp cut. The CBR noted that domestic inflation is moving closer to the 4% target, while inflation expectations are declining and the economic activity continues to recover. The central bank now expects to clinch the inflation target before year-end.RUB reverted the initial weakness so far today, following the current rebound in crude oil prices, with the barrel of Brent crude regaining the $52.00 mark and above. The pair, in the meantime, keeps navigating the area of 2-week peaks in the upper-56.00s, on its way to close its second consecutive week with gains.USD/RUB levels to watchAt the moment the pair is losing 0.1032 at 56.78 facing the next support at at 56.72 (low Apr.27) seconded by 56.49 (20-day sma) and finally 56.15 (low Apr.26). On the upside, a breakout of 57.36 (55-day sma) would aim for 57.55 (high Apr.10) and then 58.19 (high Mar.22).

The USD/CHF pair finally moved out of its 3-day old consolidative range and dropped to refresh weekly lows, below the 0.9900 handle.  The pair's shar

The USD/CHF pair finally moved out of its 3-day old consolidative range and dropped to refresh weekly lows, below the 0.9900 handle.  The pair's sharp downfall in the past couple of hours lacked any fundamental triggers and hence, the slide could be solely attributed to a fresh wave of greenback selling pressure. In fact, the key US Dollar Index has now dropped back closer to multi-month lows, near mid-98.00s, amid escalating worries over the US relation with N. Korea.   •  USD: a major rally appears unlikely – TDSMeanwhile, the incoming US macro data has also been pointing towards a possible phase of economic slowdown and traders seemed to build on bearish USD positions in anticipation of yet another disappointment from quarterly growth numbers.   •  US: Don’t entirely dismiss the weakness in Q1 GDP - NomuraHence, investors' attention will remain glued to the advance release of US GDP print, later during the day. A dismal growth figure would surely aggravate the bearish sentiment surrounding the major and pave way for continuation of the ongoing downward trajectory.Technical levels to watchA follow through weakness below 0.9890 level might continue dragging the pair further towards 0.9855-50 horizontal support en-route late-March lows support near 0.9815 area. On the upside, any recovery attempt might now confront immediate resistance near 0.9930 region, which is closely followed by the very important 200-day SMA hurdle near mid-0.9900s. A convincing break through 200-day SMA might now trigger a short-covering rally back towards reclaiming the parity mark ahead of 1.0020 horizontal resistance.

Analysts at BBH explain that the Eurozone reported stronger than expected preliminary April CPI numbers as the headline rose to 1.9% from 1.5%, and th

Analysts at BBH explain that the Eurozone reported stronger than expected preliminary April CPI numbers as the headline rose to 1.9% from 1.5%, and the core rate jumped to 1.2% from 0.7%.  Key Quotes“The data appears to have been flattered by the calendar effect of Easter and trip packages, for example, are included in the core.  It is the highest level since mid-2013.  The CPI report followed news of a stronger gain in M3 than expected, and an improvement in lending to both households and non-financial businesses.”  “The euro has rallied toward the week's high.  However, since the sharply higher opening on Monday after the first round of the French elections, the euro has chopped around the same one cent range of $1.0850-$1.0950.  Recall the $1.0935 area corresponds to the 61.8% retracement of the euro's decline since the US election last November.  And $1.0980 is the 50% retracement objective of the decline from last year's high near $1.1615.  Large option strikes at $1.09 (1.8 bln euros) and $1.0950 (2.4 bln euros) roll-off later today.”

Bert Colijn, Senior Economist at ING, notes that the Eurozone’s headline inflation surged to 1.9% in April and core inflation increased to 1.2%, its h

Bert Colijn, Senior Economist at ING, notes that the Eurozone’s headline inflation surged to 1.9% in April and core inflation increased to 1.2%, its highest level since June 2013.Key Quotes“A large part of this rebound can be attributed to the late Easter we had this year. Expect next month’s release to show weaker price growth though as underlying inflation remains weak.” “Even though the detailed breakdown of inflation is not yet available, regional CPIs from Germany suggest a surge in holiday related inflation, like package holidays, which is related to the timing of Easter. Last month inflation dropped due to this effect and now we see the increase related to this. This clouds the more fundamental movement in inflation as a result of the decline in the base effects of energy on inflation. While energy prices still grew by 7.5% YoY this month, we expect that growth rate to come down significantly in May. That means that this month’s jump in price growth is likely to be followed by a decline, which also holds good for core inflation due to the package holiday effect.” “While the Eurozone economy is showing some signs of acceleration, underlying price pressures are slow to respond, as is usually expected. Wage growth is still very weak for the moment and unlikely to increase significantly in the coming months. Selling price expectations among businesses are becoming stronger, but the impact of this usually comes with a delay. Core inflation is therefore likely to remain well below 1.5% for the foreseeable future, which means that Draghi had a point in keeping his cards close to his chest at the ECB governing council meeting yesterday. Although expectations of hints at tapering are rising, it seems likely that inflation rates will be disappointing at the time of the coming June council meeting.”

With spending data pointing to decelerating economic growth, the research team at Nomura expects the Bureau of Economic Analysis (BEA) to report that

With spending data pointing to decelerating economic growth, the research team at Nomura expects the Bureau of Economic Analysis (BEA) to report that US Q1 GDP growth slowed to 0.2% q-o-q saar (Consensus: 1.0%) from 2.1% in Q4.Key Quotes“Based on data that came out this week, our Q1 estimate was lowered by 0.8pp from our previous forecast of 1.0%. Although several special factors cloud the Q1 picture and increase the uncertainty surrounding our Q1 forecast the weakness cannot be entirely dismissed.” “Growth in spending over the past few months was sluggish, and our Q1 GDP tracking estimate has been hovering below 1.0% q-o-q saar since the end of March. Similarly, the Atlanta Fed’s GDPNow tracking estimate has been below 1.0% since 5 April.” “Additionally, incoming information suggests that the BEA will not incorporate annual revisions to retail sales into the advance estimate of Q1 GDP. After annual revisions to retail sales lowered core retail sales in Q1, we revised down our tracking estimate to 0.8% from 1.0% on Wednesday. The reversal of the impact of these revisions on our Q1 GDP tracking model was positive to our tracking estimate. Combining these developments this week, we lowered our Q1 GDP tracking estimate by 0.6pp to 0.2% q-o-q saar from 0.8%.” “Given the slow growth in Q1, we expect to see some rebound in GDP growth in Q2. In particular, weak inventory accumulation in Q1 would provide a lower jumping-off point from Q1 to Q2, which means a small increase in the level of inventories could make a significant positive contribution to economic growth in Q2. However, a potential rebound in Q2 should be approached with caution.” “Final demand, which excludes changes in private inventories, will be a more important indicator for economic growth and our calculation suggests that real final demand grew only moderately at an annual rate of 1.5% q-o-q in Q1, following a 1.1% advance in the previous quarter. Moreover, our aforementioned analysis on the potential impact of residual seasonality suggests that most of the recent weakness in spending reflects the underlying trend of the economy as opposed to measurement issues.”

Russia Interest rate decision down to 9.25% from previous 9.75%

Arne Rasmussen, Chief Analyst at Danske Bank, recommends selling the cross on occasional upticks. Key Quotes “The biggest surprise yesterday came fr

Arne Rasmussen, Chief Analyst at Danske Bank, recommends selling the cross on occasional upticks.Key Quotes“The biggest surprise yesterday came from Sweden where the Riksbank delivered a slightly more dovish package than priced in markets as most had expected an announced end to QE”. “The announcement sent EUR/SEK to the upper end of what we consider to be the 9.45-9.65 trading range, and while the policy mix suggests a slightly stronger EUR/SEK in the short term, we see value in selling the cross from a tactical and strategic perspective on rallies towards the high end of the range”. “Long term, we stick to the view that EUR/SEK should depreciate from a fundamental point of view. Moreover, we note that, the Riksbank is 1) tapering after all, 2) three of six board members voted against the QE extension and 3) they have lowered the probability of a 10bp cut from 60% to 30%”.  

In opinion of FX Strategists at TD Securities, sustainable rallies in the greenback remain unlikely for the time being. Key Quotes “Despite some sof

In opinion of FX Strategists at TD Securities, sustainable rallies in the greenback remain unlikely for the time being.Key Quotes“Despite some soft data recently, US GDP remains on track for above-trend 2.2% growth for 2017. Fiscal uncertainty continues with the near-term risk of a government shutdown and unclear prospects for tax reform later this year. But full employment and gradually rising inflation should allow the Fed to hike i n June and September regardless. The risk i s for balance sheet reduction to start late this year; mid-2018 is our base case”. “While pockets of USD strength will appear, the case for another major rally has waned. Continued Fed tightening will remain supportive, but focus is shifting to prospects of central bank normalization elsewhere. Other currencies are likely to benefit disproportionately from global growth and inflation tailwinds, but this may remain a theme for H2 a s we look for range trading to prevail against the major G10 pairs”.

FX Strategists at UOB Group expects the pair to advance above the critical 1.10 handle in the near term. Key Quotes “EUR traded in a range of 1.0850

FX Strategists at UOB Group expects the pair to advance above the critical 1.10 handle in the near term.Key QuotesEUR traded in a range of 1.0850/1.0932 yesterday, lower than the expected consolidation range of 1.0860/1.0940. The daily closing is on the weak side but weak downward momentum suggests a slow drift lower towards the strong support at 1.0830 (next support at 1.0800). Resistance is at 1.0895 but only a break above 1.0930 would indicate that the current downward bias has eased”. “While the relatively weak daily closing has dented the upward momentum, it is still early to expect a short-term top. As long as 1.0830 is intact, we continue to anticipate a break a move above 1.1000 even though we must admit that the odds for such a move have diminished”.

The Japanese yen stays on the defensive at the end of the week, with USD/JPY now inching higher to the mid-111.00s, or daily highs. USD/JPY attention

The Japanese yen stays on the defensive at the end of the week, with USD/JPY now inching higher to the mid-111.00s, or daily highs.USD/JPY attention to US dataThe pair is moving higher in tandem with yields in the US money markets, which continue to rebound from lows seen earlier during the Asian trading hours. In the meantime, the pair continues to navigate the area of 4-week peaks in the 111.50/60 band, always looking at US yields as the main catalyst for price action. In fact, the US 10-year reference has managed to rebound to the vicinity of the 2.31% level, where it is now attempting to consolidate. Data wise in the US docket, market participants will closely follow the first revision of Q1 GDP figures, seconded by the Chicago PMI, PCE during Q1 and the final gauge of April’s Consumer Sentiment.USD/JPY levels to considerAs of writing the pair is gaining 0.17% at 111.46 and a surpass of 111.81 (50% Fibo of 115.51-108.11) would aim for 111.94 (55-day sma) and then 112.20 (high Mar.31). On the other hand, the next support aligns at 110.94 (38.2% Fibo of 115.51-108.11) followed by 110.85 (low Apr.26) and finally 110.04 (20-day sma).

Italy Producer Price Index (MoM) fell from previous 0.3% to 0% in March

Italy Producer Price Index (YoY) fell from previous 3.3% to 3.1% in March

Having refreshed weekly low near 0.8410 region, the EUR/GBP cross staged a goodish recovery and is now placed just few pips away from session tops tou

Having refreshed weekly low near 0.8410 region, the EUR/GBP cross staged a goodish recovery and is now placed just few pips away from session tops touched in the past hour.  A slight disappointment from the prelim UK GDP figures helped the cross to regain traction and bounce off from the vicinity of 0.8400 handle. According to the first estimate, the UK economy is expected to grow 0.3% q-o-q, down from 0.7% growth reported in the previous quarter and lower than 0.4% growth expected. Meanwhile, the yearly growth ticked higher to 2.1% during the first quarter of 2017, but was still slightly below consensus estimates.    •  UK household squeeze hits 1Q growth as GDP grows just 0.3% - INGAdding to this, upbeat Euro-zone inflation numbers revived positive sentiment surrounding the shared currency and provided an additional momentum to the pair's recovery move. According to the flash estimates, the composite Euro-zone headline inflation, as measured by CPI, is expected to have risen by 1.9% y-o-y during April, while core CPI is seen rise to 1.2% during the same period.    •  ECB’s Survey of Professional Forecasters revised up inflation figuresA larger-than-expected rise in prices eased concerns over inflation outlook raised by the ECB President Mario Draghi, during the post meeting press conference on Thursday, and resulted into fresh buying interest around the shared currency.  With macro data from the old continent out of the way, focus shifts to the US economic docket, which would have diverging effect on the shared currency and the British Pound, eventually providing some impetus for the EUR/GBP cross.Technical levels to watchOn a sustained recovery back above 0.8465-70 immediate resistance, the cross is likely to head towards reclaiming the key 0.8500 psychological mark before heading back towards two-week highs resistance near 0.8530 level. Meanwhile on the downside, 0.8425-20 region now becomes immediate support to defend, which if broken would turn the cross vulnerable to break below the 0.8400 handle and head towards testing 0.8385-80 support.

Ireland Retail Sales (YoY) rose from previous 1.1% to 3.2% in March

Teunis Brosens, Senior Economist at ING, notes that after a minor blip in February, Eurozone bank lending is growing as before in March while the cons

Teunis Brosens, Senior Economist at ING, notes that after a minor blip in February, Eurozone bank lending is growing as before in March while the consumer credit is growing fast in the South.Key Quotes“Eurozone bank lending growth to households accelerated to 2.4% YoY in March. The bulk of credit growth is being realised in mortgages. But in Spain and Portugal, loan growth is being solely realised in consumer credit (+14.8% and +14.6% YoY, respectively). Consumer credit is also growing strongly in Italy (+8.4%). Insofar consumer credit growth is linked to employment growth and thus truly increasing spending power, this is perfectly fine. Yet consumer credit is a variable to monitor to assess the sustainability of consumption growth.” “Loan growth to businesses dipped slightly in February to 1.9% YoY, but bounced back to 2.3% in March. Among the bigger economies, Italy and the Netherlands stand out with zero or negative business loan growth.” “Headline M3 money growth increased by 5.3% in March, up from 4.7%. While pre-2008 money growth was primarily driven by bank lending to the private sector, the steady growth of c.5% of the last two years is primarily related to QE, with increasing ECB government bonds holdings being the biggest counterpart to money growth.” “Narrower M1 money growth accelerated to 9.1% from 8.4%. M1 is one of the best leading indicators for the Eurozone business cycle in normal times, however its predictve qualities in times of negative rates are untested. Taking that into account, M1 growth points to a continuation of the current GDP growth trend for the remainder of the year.”

The single currency has quickly left behind the initial weakness and is now lifting EUR/USD to fresh tops near 1.0950. EUR/USD boosted by CPI The pa

The single currency has quickly left behind the initial weakness and is now lifting EUR/USD to fresh tops near 1.0950.EUR/USD boosted by CPIThe pair met increasing buying interest after inflation figures in the euro region are expected to rise at an annualized 1.9% during April, surpassing initial estimates for a 1.8% rise and up from March’s 1.5% advance. Core prices are also seen rising above expectations 1.2%, up from the 0.7% gain from the previous month. Spot stays underpinned by the now renewed offered bias surrounding the greenback, which is currently testing lows in the 98.60 region when tracked by the US Dollar Index.EUR/USD levels to watchAt the moment, the pair is gaining 0.61% at 1.0939 and a break above 1.0945 (high Apr.28) would target 1.0951 (2017 high Apr.25/26) en route to 1.1000 (psychological handle). On the downside, the immediate support aligns at 1.0850 (low Apr.27) seconded by 1.0833 (200-day sma) and finally 1.0805 (23.6% Fibo of the April rally).

James Smith, Economist at ING, explains that after a remarkably strong run through 2016, the UK economy has started to slow as consumers cut back on s

James Smith, Economist at ING, explains that after a remarkably strong run through 2016, the UK economy has started to slow as consumers cut back on spending.Key Quotes“The UK economy grew by just 0.3% in the first quarter, weaker than expected and is a noticeable slowdown on the fourth quarter. We only get limited details at this stage, but it’s clear that the all-important service sector is beginning to cool. At 0.3%, services output grew at the slowest rate in two years.” “When we talk about services, we are largely referring to consumer activity. That's started to take a hit as the fall in the value of the pound filters through to prices. We expect inflation to surge above 3% this year, and given that wage growth has been more subdued, real incomes are starting to fall. Having been ‘spend spend spend’ towards the end of 2016, we’re starting to see consumers respond to this squeeze. Consumer confidence has fallen and various measures of household spending have disappointed.” “This household squeeze is likely to be compounded by the effect of Brexit uncertainty, which may increasingly deter firms from hiring/investing. Whilst trade should perform better thanks to the weaker pound, we don’t expect this to be enough to prevent growth gradually slowing through this year.” “For these reasons, we don’t expect any action from the Bank of England until the outcomes of the Brexit negotiations become clearer and uncertainty dissipates. We aren’t expecting a rate hike before 2019.”

Greece Producer Price Index (YoY): 7.7% (March) vs previous 11.3%

Having dropped closer to 100-day SMA support, the EUR/JPY caught fresh bids and extended its up-ward trajectory to fresh session tops beyond mid-121.0

Having dropped closer to 100-day SMA support, the EUR/JPY caught fresh bids and extended its up-ward trajectory to fresh session tops beyond mid-121.00s after Euro-zone inflation data.  According to the flash estimates, released just a while ago, the composite Euro-zone headline inflation, as measured by CPI, is expected to have risen by 1.9% y-o-y during April, while core CPI is seen rise to 1.2% during the same period, sharply up from 1.5 and 0.7% rise reported in the previous month.  The readings surpassed consensus estimates eased concerns raised by the ECB President Mario Draghi, during the post meeting press conference on Thursday, and triggered a fresh wave of optimism surrounding the shared currency.  Meanwhile, an offered tone surrounding the Japanese Yen further collaborated to the pair's up-move back closer to over 1-month highs touched on Wednesday, in the aftermath of Emmanuel Macron’s victory in the first round of the French Presidential election. Technical levels to watchImmediate resistance on the upside is seen near the 122.00 handle and any further up-move beyond the said handle now seems to confront strong resistance near 122.20-25 region. On the flip side, weakness below 120.65-60 immediate support (100-day SMA) is likely to accelerate the slide towards the key 120.00 psychological mark.

Greece Retail Sales (YoY) up to 9.6% in February from previous -0.1%

Livesquawk reports comments from an EU official, stating that the EU Brexit Summit scheduled on Saturday is expected to be a short meeting. On March

Livesquawk reports comments from an EU official, stating that the EU Brexit Summit scheduled on Saturday is expected to be a short meeting. On March 21, European Union (EU) President Tusk announced that the EU's 27 leaders will meet on April 29 to agree their negotiating lines for Brexit talks once Article 50 was triggered on March 29. Meanwhile, Tusk was on the wires earlier today, via Reuters, noting that a phased approach is suitable for Brexit talks.

Italy Consumer Price Index (EU Norm) (YoY) came in at 2%, above forecasts (1.6%) in April

European Monetary Union Consumer Price Index - Core (YoY) registered at 1.2% above expectations (1%) in April

Italy Consumer Price Index (EU Norm) (MoM) above forecasts (0.5%) in April: Actual (0.8%)

Italy Consumer Price Index (YoY) above expectations (1.7%) in April: Actual (1.8%)

Italy Consumer Price Index (MoM) above expectations (0.2%) in April: Actual (0.3%)

European Monetary Union Consumer Price Index (YoY) came in at 1.9%, above forecasts (1.8%) in April

The ECB has published its Survey of Professional Forecasters for Q2 2017. Respondents now see inflation figures tracked by the CPI rising 1.6% in 2017

The ECB has published its Survey of Professional Forecasters for Q2 2017. Respondents now see inflation figures tracked by the CPI rising 1.6% in 2017, 1.5% in 2018 and 1.7% in 2019. The CPI is seen higher in this year and the next one, while expectations are unchanged for 2019. The average longer-term inflation expectations stayed anchored at 1.8%. Regarding GDP, the survey now expects the economy to expand 1.7% this year, 1.6% in 2018 and 1.5% in 2019.

The British Pound is easing some ground following the GDP releases today, now dragging GBP/USD to the 1.2920/10 band. GBP/USD weaker on data The pai

The British Pound is easing some ground following the GDP releases today, now dragging GBP/USD to the 1.2920/10 band.GBP/USD weaker on dataThe pair shed some ground after UK’s advanced GDP figures showed the economy is expected to expand at a monthly 0.3% (vs. 0.4% forecasted) and  2.1% on a yearly basis (vs. 2.2% estimated). Further data saw the Index of Services rising in line with expectations 0.5% on the three months ended in February, while Mortgage Approvals decreased to 41.2K during March.GBP/USD levels to considerAs of writing the pair is gaining 0.17% at 1.2925 and a breakout of 1.3000 (psychological level) would open the door to 1.3060 (high Sep.29 2016) and then 1.3125 (high Sep.22 2016). On the other hand, the immediate support aligns at 1.2834 (low Apr.27) followed by 1.2803 (low Apr.26) and finally 1.2770 (low Apr.20).

United Kingdom BBA Mortgage Approvals came in at 41.1K below forecasts (42.1K) in March

The UK GDP first estimate revealed that the pace of growth in the UK economy slowed more-than expected in the first quarter of this year. The report

The UK GDP first estimate revealed that the pace of growth in the UK economy slowed more-than expected in the first quarter of this year. The report showed that the GDP figures came in at 0.3% q/q in the first quarter of 2017, weaker than 0.7% booked in the fourth quarter, missing expectations of a 0.4% reading. While on an annualized basis, the growth rate stood at +2.1% in Q1, when compared to forecasts of +2.2% and 1.9% previous.Key Headlines from ONS:Slower growth in Quarter 1 2017 was mainly due to services, which grew by 0.3% compared with growth of 0.8% in Quarter 4 (Oct to Dec) 2016.  

The GBP/JPY cross continued building on to its strong bullish momentum and held closer to near three-month tops, around the 144.00 handle, following t

The GBP/JPY cross continued building on to its strong bullish momentum and held closer to near three-month tops, around the 144.00 handle, following the UK GDP print. The initial UK GDP estimate for the first quarter of 2017 showed a q-o-q growth of 0.3%. The growth rate was slower than 0.7% recorded in the previous quarter and was also lower than consensus estimates pointing to a 0.4% growth.  Adding to the disappointment, yearly growth rate came-in at 2.1% as compared to 2.2% expected, but was still better-than 1.9% reported in the previous quarter.    •  Moody's: Macroeconomic conditions in the UK remain firm overallDespite of the slightly lower-than-expected GDP figures, the cross held stable just below the 144.00 handle, led by the prevalent positive sentiment surrounding the British Pound in wake of last week's surprise announcement by the UK PM Theresa May.  Moreover, an offered tone surrounding the Japanese Yen further collaborated to the pair's bid tone near its highest level since late-Jan., at least for the time being.Technical levels to watchImmediate resistance is pegged near 144.40 level, which if cleared is likely to accelerate the up-move further towards the key 145.00 psychological mark en-route 145.75 hurdle. On the downside, retracement below 143.35-30 immediate support could get extended the downslide even below 143.00 round figure mark towards its next important support near 142.65-60 zone.

United Kingdom Gross Domestic Product (QoQ) came in at 0.3% below forecasts (0.4%) in 1Q

United Kingdom Index of Services (3M/3M) meets expectations (0.5%) in February

United Kingdom Gross Domestic Product (YoY) came in at 2.1%, below expectations (2.2%) in 1Q

China's foreign ministry came out with a statement on the North Korean issue, noting the following: China says peaceful resolution is the only way to

China's foreign ministry came out with a statement on the North Korean issue, noting the following: China says peaceful resolution is the only way to resolve North Korea issue Key to resolution of issue does not lay with China Won't comment on what China would do if N Korea carries our another nuclear test Xi and Trump have close communication and that's good for the world UN meeting focussing on putting pressure on N Korea would be a missed opportunity

Spain Current Account Balance dipped from previous €0.41B to €-0.2B in February

The Swiss National Bank (SNB) Chairman Thomas Jordan is on the wires now, via Reuters, making his scheduled speech on monetary and investment policy a

The Swiss National Bank (SNB) Chairman Thomas Jordan is on the wires now, via Reuters, making his scheduled speech on monetary and investment policy at SNB's General Meeting of Shareholders, in Bern.Key Headlines:Maintain its expansionary monetary policy. The Swiss franc is still significantly overvalued. The negative interest rate and the SNB’s willingness to intervene in the foreign exchange market are necessary and appropriate to ease pressure on the Swiss franc The SNB’s investment policy has to help it fulfil its monetary policy mandate and give it the necessary room for manoeuvre. A growing balance sheet inevitably leads to greater fluctuations in annual results: both absolute potential profit and absolute potential loss become higher. Complete Text of the speech

A bout of USD selling is now helping GBP/USD to clinch fresh 2017 tops around 1.2940, levels last seen in late September 2016. GBP/USD attention to d

A bout of USD selling is now helping GBP/USD to clinch fresh 2017 tops around 1.2940, levels last seen in late September 2016.GBP/USD attention to dataCable’s march north stays unabated so far today, advancing for the third week in a row and reaching at the same time fresh multi-month peaks in the vicinity of 1.2940 for the time being. The now softer tone surrounding the buck lent extra support to the pair, which has been posting gains since Tuesday amidst a generalized buying bias around the Sterling. Data wise in the UK, advanced GDP figures for the first quarter are due later. Consensus expects the economy to expand 0.4% inter-quarter and 2.2% on a yearly basis. Across the pond, the first revision of the GDP figures for the first quarter is due seconded by the Chicago PMI, Q1’s PCE and the final gauge of April’s Consumer Sentiment.GBP/USD levels to considerAs of writing the pair is gaining 0.26% at 1.2936 and a breakout of 1.3000 (psychological level) would open the door to 1.3060 (high Sep.29 2016) and then 1.3125 (high Sep.22 2016). On the other hand, the immediate support aligns at 1.2834 (low Apr.27) followed by 1.2803 (low Apr.26) and finally 1.2770 (low Apr.20).

The EUR/USD pair seems to have regained some fresh traction and snapped two-consecutive days of losing streak, reversing part of downslide led by caut

The EUR/USD pair seems to have regained some fresh traction and snapped two-consecutive days of losing streak, reversing part of downslide led by cautious ECB. The pair quickly reversed early losses and inched back closer to the 1.0900 handle amid some renewed US Dollar selling interest, against the backdrop of escalating tension between the US and N. Korea.  Market seems to have digested Thursday's cautious comments by the ECB President Mario Draghi, during the post meeting press conference, pointing to uncertainty over Euro-zone’s inflation and growth outlook. Should today's flash release of Euro-zone inflation figures confirms central bank's outlook, it could lead to additional weakness for the shared currency.  When is Eurozone flash CPI and how could affect EUR/USD?Meanwhile, disappointment from recent US macro data, pointing to a possible phase of economic slowdown, further collaborated to the prevalent bearish sentiment surrounding the greenback. Hence, investors on Friday eagerly await for the first estimate US GDP numbers, due later during the day.  US: Q1 GDP tracking estimate lowered by 0.6pp to 0.2% from 0.8% - NomuraTechnical levels to watchA follow through momentum above the 1.0900 handle could get extended towards 1.0925-30 resistance ahead of multi-month highs resistance near mid-1.0900s. On the downside, 1.0850 area (nearing 200-day SMA) now seems to have emerged as immediate support, which if broken might drag the pair below weekly lows support near 1.0820 level towards testing the 1.0800 handle.

European Monetary Union Private loans (YoY) meets expectations (2.4%) in March

European Monetary Union M3 Money Supply (3m) remains unchanged at 4.9% in March

Norway Registered Unemployment n.s.a fell from previous 2.9% to 2.8% in April

Norway Registered Unemployment s.a down to 97.16K in April from previous 97.85K

European Monetary Union M3 Money Supply (YoY) registered at 5.3% above expectations (4.7%) in March

Austria Gross Domestic Product (QoQ) up to 0.6% in 1Q from previous 0.5%

Turkey Trade Balance declined to -4.49B in March from previous -3.69B

Geoffrey Minne, Economist at ING, explains that after 2 consecutive quarters at 0.7% QoQ, Spanish GDP growth accelerated in 1Q17, hinting at another y

Geoffrey Minne, Economist at ING, explains that after 2 consecutive quarters at 0.7% QoQ, Spanish GDP growth accelerated in 1Q17, hinting at another year of GDP growth hovering around 3%.Key Quotes“1Q GDP growth was higher than in the two previous quarters and as we expected, the momentum does not seem to be fading away in 2017. No details are available for the moment but we can reasonably infer that domestic demand remains the engine of Spanish growth. With still strong gains in employment (400K exited unemployment in one year) and consumer confidence improving (be it about concerns on unemployment, saving or the economic situation), it is difficult to be pessimistic about private consumption in Spain. In parallel, today, the national institute of statistics showed that retail sales growth rebounded in March by 2.6% YoY after two months in negative territory, suggesting that the consumer is set for a strong contribution to GDP growth this year. In 2016, private consumption’s contribution to GDP growth was 1.8ppt and we do not expect a lower figure in 2017.” “A second driver of GDP growth – and maybe a more surprising one – could be external demand. Thanks to growing external demand (particularly within the Eurozone) and to a growing number of exporting firms, we expect net exports to have contributed decently in 1Q and to become a stronger growth driver by the end of the year. Export of services is the main contributor to the trade surplus, thanks notably to the buoyant tourism sector. Despite the Brexit and the plunge of the pound Sterling, British tourists surprisingly continue to travel to Spain (+14% YoY in February). The low euro might also have attracted tourists from outside the Eurozone. In the first two months of 2017, the number of tourists flying from the US increased by 31% as compared to the first two months of 2016. On the other hand, the export of industrial goods is also improving (though from a lower basis) and at one point could trigger new investment in the manufacturing sector.” “Stronger GDP figures also mean the government is winning its bet on the excessive deficit issue. Even without new fiscal cuts, the deficit to GDP ratio could shrink through an increase of its denominator. This strategy isn’t a game changer for the growth pattern but at least it avoids public spending becoming a drag on GDP growth in the short run.” “All in all, it lacks only a little to forecast a third consecutive year above the 3% threshold for GDP growth. On the back of steady private consumption and strengthening external demand, the Spanish recovery should continue to support job creation. As Luis De Guindos mentioned, GDP growth could exceed 2.5% for the next 2 to 4 years, a necessary step to bring the unemployment rate back to pre-crisis levels.”

Gold traded with mild positive bias and eroded part of previous session losses, albeit remained closer to two-week lows. Currently trading around $12

Gold traded with mild positive bias and eroded part of previous session losses, albeit remained closer to two-week lows. Currently trading around $1266 region, a slight deterioration in investors' risk-appetite, amid growing political tensions between the US and N. Korea, boosted the precious metal's safe-haven appeal. Adding to this, softer tone surrounding the US treasury bond yields failed to provide any additional lift to the US Dollar and further benefitting dollar-denominated commodities - like gold.    •  US Dollar clings to 99.00 ahead of US GDPDespite of the tepid recovery move the yellow metal remains on track for its second consecutive week of declines. Focus shifts to the US economic docket, with spotlight on the first US GDP growth estimates, which is likely to influence Fed rate-hike expectations and eventually provide fresh impetus for the non-yielding metal. Apart from the US GDP print, a slew of important macroeconomic releases from other major economies might also infuse some volatility and derive demand for traditional safe-haven assets, including gold.Technical levels to watchImmediate resistance is pegged near $1270 level, above which a bout of short-covering could lift the commodity towards $1275 horizontal resistance en-route $1279-80 hurdle. On the downside, $1260 level now seems to have emerged as immediate support, which if broken seems to accelerate the slide towards the very important 200-day SMA support near $1253 region.

Sweden Retail Sales (YoY) dipped from previous 2.7% to 1.9% in March

The upside momentum in EUR/JPY seems to have run out of steam in the boundaries of 121.20 for the time being. EUR/JPY gains capped around 122.00 Aft

The upside momentum in EUR/JPY seems to have run out of steam in the boundaries of 121.20 for the time being.EUR/JPY gains capped around 122.00After reaching fresh monthly lows in the 122.00 neighbourhood earlier in the week, the cross shed some ground following a renewed offered bias around the single currency, although the bearish note surrounding the safe haven JPY continues to limit the downside. EUR/JPY surged near 122.00 the figure during the first half if the week in response to a sharp pick up in the risk appetite trends following Sunday’s elections in France. The bull run, however, fizzled out somewhat since then, finding some decent support in the 120.60/50 band, where currently sits the 100-day sma. Later in the session, flash inflation figures in Euroland for the month of April should keep the attention on EUR after yesterday’s dovish message from the ECB.EUR/JPY relevant levelsAt the moment the cross is up 0.08% at 121.11 facing the immediate hurdle at 121.91 (high Apr.27) followed by 122.00 (high Apr.26) and finally 122.89 (high Mar.13). On the flip side, a breach of 120.65 (100-day sma) would expose 120.57 (low Apr.27) and finally 119.50 (55-day sma).

Inga Burk, Economist at ING, explains that after ending 2016 on a solid footing, the Austrian economy performed even better in the first quarter of th

Inga Burk, Economist at ING, explains that after ending 2016 on a solid footing, the Austrian economy performed even better in the first quarter of this year as the flash estimate for 1Q GDP growth came in at 0.6% QoQ from 0.5% QoQ in 4Q16, preliminary figures from the Austrian Institute of Economic Research show.Key Quotes“The more volatile Eurostat measure confirmed the positive picture for first quarter growth, coming in at 0.5% QoQ.” “Domestic demand remained the most important growth driver in the first quarter, although other sectors supported the upturn as well. The broadening of the Eurozone recovery is positively affecting exports, which had been subdued at the end of last year. Employment dynamics have been positive, and the high number of vacancies suggests that these positive dynamics will continue in the months to come. It is no wonder that economic sentiment surged to its highest level since April 2011.” “Looking ahead, the Austrian economy should remain on a robust growth path in the first half of the year. While the Austrian economy had been one of the Eurozone’s growth laggards early last year, the latest data shows that the economy has successfully caught up with the group of fast-growers.”

In view of the analysts at Nomura, markets were slightly disappointed by Riksbank’s dovish stance and no change in forward guidance by ECB, in their r

In view of the analysts at Nomura, markets were slightly disappointed by Riksbank’s dovish stance and no change in forward guidance by ECB, in their respective meets yesterday.Key Quotes“The market started the week on a positive note following Emmanuel Macron’s success in the first round of the French elections. The market has largely priced out the possibility of Marine Le Pen winning in the second round on 7 May, rightly so in our view. We entered long EUR/USD positions on Sunday night, and expect EUR/USD to move towards 1.15 by year end.” “The strength of the Eurozone economy and our expectations for gradual ECB normalisation are key factors behind this view. However, we did not expect President Draghi to announce a change in the ECB’s forward guidance today, and markets were slightly disappointed when he said no discussions about changing forward guidance and about the exit strategy had taken place at the meeting today. He also said there was no need to discuss forward guidance sequencing at the moment. We see this as a good opportunity to buy the euro on dips.” “The Riksbank this morning also came out on the dovish side, in line with our own expectations but catching the market off-guard. SEK depreciated around the meeting, with deposit rate projections pushing back the timing of the first hike and a SEK15bn QE extension. Longer-term, we maintain our constructive view on SEK. Strong growth domestically and abroad, the ECB turning more hawkish and inflation recovering should see the Riksbank turn more hawkish over the coming months. Governor Ingves is the one to watch, along with inflation prints as usual. We expect EUR/SEK to move lower as the ECB starts to discuss normalisation and 9.65-9.70 would be good levels to short EUR/SEK in our view. Medium-term USD/SEK shorts are also attractive from the 8.90-95 level.” “There were also developments on the US politics front this week. The Trump administration stepped up its rhetoric on tax reform, presenting a modest set of guidelines for tax reform yesterday, which were scant on details. The key elements included a reduction in the top corporate tax rate from 35% to 15%, a shift to a territorial system for corporate taxes, a temporary tax reduction for the repatriation of profits earned abroad, a reduction in the number of personal tax brackets and a decline in the top rate to 35%. That said, the details provided were insufficient to assess the budgetary impact. According to our US economists, the announcements do not change their expectations that only modest tax cuts with little reform will end up being passed by Congress.”

Arne Rasmussen, Chief Analyst at Danske Bank, sees the likeliness of NOK gathering some traction in the very near term. Key Quotes “In Norway, EUR/N

Arne Rasmussen, Chief Analyst at Danske Bank, sees the likeliness of NOK gathering some traction in the very near term.Key Quotes“In Norway, EUR/NOK has edged lower aided by short-covering in NOK/SEK post the Riksbank’s message”. “On the domestic front, the LFS labour market report released yesterday had some positive aspects. While the unemployment rate (as expected) rose to 4.3%, the rise was driven by a higher labour force as employment rose”. “Moreover, the Norges Bank lending survey showed a significant tightening of credit standards, which is a key factor for why we expect house price growth to ease in the coming months”. “Today, we have a very tight data calendar in Norway with retails sales, Norges Bank FX sales, NAV unemployment and a phone update to the Regional Network Suvery (very short version of regular update). We see some upside risk to NOK on the releases”.

Spain Gross Domestic Product - Estimated (QoQ) registered at 0.8% above expectations (0.7%) in 1Q

Spain Retail Sales (YoY) up to 0.9% in March from previous 0%

Austria Producer Price Index (MoM) down to -0.1% in March from previous 0.1%

Austria Producer Price Index (YoY) down to 2.7% in March from previous 2.9%

Eurozone CPI flash estimate Overview Eurostat will publish the euro zone's inflation first estimate for April at 09.00GMT today. Consumer prices are

Eurozone CPI flash estimate OverviewEurostat will publish the euro zone's inflation first estimate for April at 09.00GMT today. Consumer prices are expected to show an increase to 1.8% on a yearly basis, following a 1.5% reading seen previously. While the core figures are also expected to rise to 1% versus 0.7% last.Deviation impact on EUR/USDReaders can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 40 pips in deviations up to 1.5 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 50 pips. How could affect EUR/USD?If the CPI comes weaker-than-expected, it would knock-off EUR/USD back towards 1.0850 levels. On the other hand, a stronger CPI data could lift the rate back above 1.09 handle, as the bulls would eye a test of 1.0950 barrier.Key notesEurozone CPI to surge to 1.8% y/y for April - TDS Eurozone: Inflation to likely increase to 1.8% y/y in April – Danske BankAbout Eurozone CPI flash estimateThe Euro Zone CPI released by the Eurostat captures the changes in the price of goods and services. The CPI is a significant way to measure changes in purchasing trends and inflation in the Euro Zone. Generally, a high reading anticipates a hawkish attitude which will be positive (or bullish) for the EUR, while a low reading is seen as negative (or bearish).

Denmark Unemployment Rate remains at 3.4% in March

Spain Gross Domestic Product - Estimated (YoY) came in at 3%, above forecasts (2.9%) in 1Q

Switzerland KOF Leading Indicator came in at 106, below expectations (107.8) in April

The USD/CAD pair continued gaining traction and has now moved back closer to 14-month highs touched in the previous trading session. With an initial

The USD/CAD pair continued gaining traction and has now moved back closer to 14-month highs touched in the previous trading session. With an initial sharp drop of 100-pips to 1.3530 region on NAFTA news, and subsequent sharp recovery of over 140-pips in wake of a slump in oil prices, it was a highly volatile session for the pair on Thursday. The pair event shrugged off disappointing US economic data and jumped to its highest level since late Feb. 2016. On Friday, the pair built on previous session's sharp recovery move despite of a goodish recovery in WTI crude oil prices, which tends to boost demand for commodity-linked currency - Loonie. The pair even shrugged-off a slightly weaker tone around the US treasury bond yields, and subdued US Dollar price-action.  Today's up-move lacked any fresh fundamental drivers and could be solely attributed to a follow through break-out momentum above the 1.3600 handle. Hence, it would be interest to see if the pair is able to build on the momentum or traders would be prompted to take some profits off the table ahead of today's important macro releases. Today's economic docket features the release of GDP growth number from the US (quarterly) and Canada (monthly), which would help investors determine the pair's next leg of directional move.   •  US: Q1 GDP tracking estimate lowered by 0.6pp to 0.2% from 0.8% - NomuraTechnical levels to watchA follow through buying interest above 1.3670 level (multi-month highs) is likely to lift the pair towards reclaiming the 1.3700 handle ahead of 1.3735 level (Feb. 25, 2016 high). On the downside, retracement below 1.3635-30 immediate support now seems to attract some fresh buying interest near the 1.3600 handle. Any further slide below the said handle would now be looked upon as buying opportunity and hence, is likely to be limited near 1.3575-70 support.

The greenback is extending its sideline theme today, gravitating around the 99.00 handle when tracked by the US Dollar Index. US Dollar attention on

The greenback is extending its sideline theme today, gravitating around the 99.00 handle when tracked by the US Dollar Index.US Dollar attention on US GDPThe index is struggling to clinch its third consecutive daily advance so far today, coming up from fresh 2017 lows in the mid-98.00s recorded on Tuesday as the risk-on trade sentiment continues to dwindle. The buck picked up extra pace after President Draghi delivered a dovish tone at Thursday’s ECB meeting, fuelling the selling bias around the single currency and thus lending extra support to the greenback. USD should remain under pressure nonetheless, as the probability of a Federal shutdown stays alive unless the Congress pass a continuing resolution later in the day. Market consensus, however, seems to lean on a last-minute deal for the time being. Later in the NA session, the first revision of the GDP figures for the first quarter is due, with forecasts seeing the economy to have expanded at an annualized 1.3% during the January-March period. In addition, the Chicago PMI is also due along with the final gauge of April’s Consumer Sentiment.US Dollar relevant levelsThe index is down 0.02% at 99.00 facing the next support at 98.88 (11-month support line) followed by 98.61 (low Apr.26) and finally 98.56 (2017 low Apr.25). On the flip side, a break above 99.21 (high Apr.27) would aim for 99.24 (high Apr.24) and finally 99.59 (38.2% Fibo of the April drop).

France Producer Prices (MoM) dipped from previous -0.2% to -0.5% in March

France Consumer Price Index (EU norm) (YoY) meets forecasts (1.4%) in April

France Consumer Spending (MoM) came in at -0.4% below forecasts (1%) in March

Geoffrey Minne, Economist at ING, explains that the French GDP growth disappointed in 1Q17 with growth of 0.3% QoQ after 0.5% in 4Q16 while on a year-

Geoffrey Minne, Economist at ING, explains that the French GDP growth disappointed in 1Q17 with growth of 0.3% QoQ after 0.5% in 4Q16 while on a year-on-year basis the 0.8% GDP growth is the slowest figure since 4Q14.Key Quotes“Another signal hinting that it will take time, a new Government and reforms, to see a significant growth acceleration.”“Figures published this morning showed that French GDP growth slowed down in the first quarter of 2017. GDP growth reached 0.3% QoQ after 0.5% in 4Q16. Important to note that the previous quarter was revised upwards by one tenth. YoY, GDP growth remains stuck at 0.8%. That said, in aggregate these two last quarters are not that bad as they followed six months of near-stagnation (-0.1% and 0.2% QoQ respectively in 2Q16 and 3Q16).” “The disappointment mainly comes from private consumption growth, at 0.1% QoQ in 1Q17 after 0.6% QoQ in 4Q16. Despite the fact that consumer confidence has slowly been recovering since 2015 and is now at levels not seen since 2007, the first quarter might have been dented by the political uncertainty. The outlook for 2017 remains however relatively positive as unemployment is gradually coming down which, as confidence surveys show, is now felt by households. At this stage however, it is still hard to see private consumption growth overtaking its 2016 growth (1.8%) in 2017.” “On a more positive note, investment saw some improvement in 1Q for a third consecutive quarter. The improving sentiment and the level of interest rates allowed for housing investments to continue their recovery for the 8th quarter in a row at 0.9% QoQ. This contributed to total investment growth in 1Q17, which came out positive at 0.9% QoQ. After the rebound registered in 4Q16, business investments accelerated further in 1Q17 (by 1.3% QoQ after -0.1% and 0.1% respectively in 2Q16 and 3Q16).” “The business confidence index from the INSEE keeps on improving and recently reached its highest level since 2011. This development surely drives companies to invest, though it might come as a surprise as one might think that some companies are keeping powder dry until the Presidential election outcome. Although a Le Pen victory looks unlikely, it remains to be seen which kind of support Emmanuel Macron would get in the Assembly after June’s legislative elections. Only then French companies will have a better idea of which reforms and fiscal support they can expect.” “Finally, net exports were a drag on GDP growth as imports rebounded by 1.5% while export growth decreased by 0.7% (the lowest figure since 2009). We expect external trade to be a drag on GDP growth in 2017.” “All in all, French growth has slowed from 1.2% in 2015 to 1.1% in 2016 and the acceleration should be very limited this year; we expect it to reach 1.3%. Afterwards, if the new government can take advantage of the recovery to implement reforms, GDP growth could accelerate towards 1.7% in 2018. On this front, after the victory of Mr Macron and Mrs Le Pen in the first round of the election last week, the next steps are the second round on 8 May, when one of these two will be chosen. Then, on 18 June, the new National Assembly will be constituted which should allow for the formation of a new government. However, this government is likely to be less stable than the previous ones as the next President will have to find support for his/her reforms outside his/her own party, as neither En Marche! nor the FN are likely to gather a governing majority in the Assembly. It is therefore too early to assess the potential support of future policies on the growth outlook.”

UK prelim Q1 GDP Overview The UK docket has the preliminary Q1 GDP report, which will be published later this session at 8.30GMT. The first estimate

UK prelim Q1 GDP OverviewThe UK docket has the preliminary Q1 GDP report, which will be published later this session at 8.30GMT. The first estimate of the United Kingdom GDP is expected to decelerate to 0.4% in the first quarter, against 0.7% growth seen in Q4. The annualized reading is also expected to show that the pace of expansion has increased to 2.2% in Q1 versus 1.9% previous.Deviation impact on GBP/USDReaders can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 40 pips in deviations up to 2.5 to -2.5, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips. How could affect GBP/USD?The spot could take a beating on a softer GDP print and test 1.28 handle, as investors would take profits off the table after the recent upsurge. On an upside surprise, the GBP/USD pair is likely to rally hard in a bid to conquer 1.30 handle, extending the ongoing unwinding of GBP shorts. Technically, a break above 1.2916 (6-month highs) could lift the pair above 1.2950 (psychological levels), beyond which a test of 1.2948 (flash crash high) is imminent. Conversely, a break below 1.2859 (5-DMA), leading to a subsequent break below 1.2836 (10-DMA) is likely to drag the pair towards testing its next support near 1.2800 (round figure).Key notesUK: GDP to decelerate from 0.7% q/q in Q4 to only 0.4% q/q in Q1 - TDS GBP/USD Forecast: likely to extend the bullish momentum on GDP figures (UK, US)About UK prelim GDPThe Gross Domestic Product released by the National Statistics is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).

Analysts at Nomura explains that the ECB announced no policy changes yesterday and nor were there any formal changes to the ECB’s forward guidance. K

Analysts at Nomura explains that the ECB announced no policy changes yesterday and nor were there any formal changes to the ECB’s forward guidance.Key Quotes“President Draghi confirmed the Bank’s commitment to buy EUR60bn of assets per month until at least the end of the year. And he reiterated that the pace or duration of asset purchases could be increased if needed.”“The most noteworthy development yesterday instead concerned President Draghi’s comments on the growth outlook. Here he suggested that the eurozone’s economic recovery was increasingly solid, that downside risks had diminished and that the ECB is “moving toward a more balanced configuration”. In other words, we think the Central Bank is getting a little more confident that a process of policy normalisation may be appropriate in the coming months. However, it is not yet confident enough to offer meaningful language shifts that would convince the market that this process is imminent.” “The question that this then begs is what will it take to convince the ECB that a policy normalisation is appropriate? The answer is a more sustained and broadly based increase in core inflation. As we have stressed, we think core inflation will rise over the next two to three months. Most of the recent dataflow tends to support that conclusion, including higher-than-expected inflation prints for April from Spain and Germany yesterday. This should pave the way for a more balanced assessment from the ECB at the next meeting on 8 June including a shift in its forward guidance. And that in turn should generate an announcement of a tapering of the QE programme at the September meeting for enactment at the start of next year. At this stage, and in line with the ECB’s communication on this matter, we do not believe that policy rates will be lifted until QE purchases have come to an end and specifically not until the latter half of 2018.”

The EUR/GBP cross well-offered for the third consecutive session and is currently placed at fresh weekly lows near 0.8415 region. Spot extended its r

The EUR/GBP cross well-offered for the third consecutive session and is currently placed at fresh weekly lows near 0.8415 region. Spot extended its reversal move from two-week highs, touched earlier this week, and has now filled majority of its weekly bullish gap led by Emmanuel Macron's victory in the first round of the French Presidential election. With markets looking beyond the initial euphoric reaction to election results, cautious comments on EZ's inflation and economic outlook by the ECB President Mario Draghi, during the post meeting press conference on Thursday, weighed on the shared currency.    •  ECB Review: Draghi, a bull in dove’s clothing – TDSMeanwhile, persistent positive sentiment surrounding the British Pound, against the backdrop of a possible 'soft Brexit' scenario following the UK PM Theresa May's announcement for snap election, further collaborated to the heavily offered tone surrounding the cross. Moving ahead, investors now look forward to important macro releases - the advanced Euro-zone inflation figures and prelim UK GDP growth numbers, and determine the next leg of directional move for the cross.   •  UK: GDP to decelerate from 0.7% q/q in Q4 to only 0.4% q/q in Q1 - TDSTechnical levels to watchWeakness below 0.8415 level could get extended towards 0.8385-80 support, which if broken is likely to accelerate the slide further towards 0.8355-50 strong horizontal support. On the upside, any recovery attempts beyond 0.8450-55 zone might now confront strong hurdle near the key 0.8500 psychological mark, above which a bout of short-covering could lift the cross beyond two-week highs resistance near 0.8530 level towards its next barrier near the 0.8570 region.

The latest Reuters poll of economists showed that a majority of them expect RBA to keep its monetary policy steady at its May 2 policy meeting. Key

The latest Reuters poll of economists showed that a majority of them expect RBA to keep its monetary policy steady at its May 2 policy meeting.Key findings from the survey:65/65 economists say there will be no change to RBA policy at the 2nd May meeting Majority see a steady rate outlook over the next 12 months 23/56 see the RBA hiking by mid-2018. 4 see a cut

Germany Retail Sales (MoM) came in at 0.1%, above forecasts (-0.3%) in March

South Africa M3 Money Supply (YoY): 5.62% (March) vs previous 6.63%

Germany Import Price Index (YoY) below expectations (6.5%) in March: Actual (6.1%)

Germany Import Price Index (MoM) came in at -0.5%, below expectations (-0.1%) in March

Norway Retail Sales : 0.1% (March) vs previous 1%

Germany Retail Sales (YoY) registered at 2.3% above expectations (1.9%) in March

United Kingdom Nationwide Housing Prices n.s.a (YoY) below forecasts (3.3%) in April: Actual (2.6%)

United Kingdom Nationwide Housing Prices s.a (MoM) registered at -0.4%, below expectations (0.2%) in April

The research team at Danske Bank points out that today, the euro area flash inflation figure is due for release and following the decline in headline

The research team at Danske Bank points out that today, the euro area flash inflation figure is due for release and following the decline in headline inflation to 1.5% y/y in March, DB look for an increase to 1.8% y/y in April (revised from 1.7% after higher German and Spanish data yesterday).Key Quotes“In line with the fall in March, this is due mainly to the early timing of Easter in 2016, which is causing volatility in prices of package holidays. This is also reflected in core inflation, which we estimate will increase to 1.0% y/y in April from 0.7% y/y in March. Looking beyond the Easter volatility, we expect headline inflation to decrease below 1.5% y/y, as the support from the oil price fades, while core inflation should also be back around 0.8-0.9% y/y.” “ECB's Survey of Professional Forecasters is also due for release. The longer term (five-year) inflation expectations in the survey have been stable at 1.8% over the past year.”

Analysts at Bank of America Merrill Lynch explains that while they expect only a very modest 25bp rate cut today by CBR as a baseline, they think a mo

Analysts at Bank of America Merrill Lynch explains that while they expect only a very modest 25bp rate cut today by CBR as a baseline, they think a more aggressive 50bp move is possible.Key Quotes“Apart from signs of resilient inflation, all other major indicators continue to improve, which could warrant a greater cut. Reasons for a more aggressive cut are possible signs of a renewed inflation slowdown next week and rather optimistic inflationary expectations, which have already reached the 4% target. On top of that, we also note the persistently weak macro, as well as a strong RUB, which both call for further easing.” “A cut alone is not enough to undermine the RUB We think that the expected 25bp or even a more aggressive 50bp rate cut would not have much of a negative impact on the RUB by itself. Thus, the real policy rate in Russia remains one of the highest and will likely remain so due to the expected inflation slowdown. As a result, we keep our positive view on the RUB despite the easing cycle as the curve has already priced a large part (if not all) of the expected easing. However, the easing could start to impact the RUB, if the CBR further softened its rhetoric, potentially guiding for more aggressive rate cuts in excess of the 150-200bp that is already priced in over the next 12-18 months. We think that such potential dovish guidance could come in the form of comments on the likely stabilization of inflation below the 4% target in the near future. We believe this could signal acceleration of the CBR’s easing cycle towards an equilibrium real policy rate of 2.5%. So far, we do not regard such a scenario as likely. However, the CBR’s rhetoric could change as soon as inflation finally reaches its ambitious 4% target.”

FX option expiries for today NY cut at 10:00ET, via DTCC, can be found below.  USDJPY 109.00/05/10 (2.86bn), 109.25, 109.35 110.00 (1.02bn), 110.

FX option expiries for today NY cut at 10:00ET, via DTCC, can be found below. USDJPY109.00/05/10 (2.86bn), 109.25, 109.35110.00 (1.02bn), 110.15, 110.35, 110.50 (522m), 110.75111.00 (881m), 111.50, 111.60 112.00, 112.50EURUSD1.0600 (2.83bn)1.0700/05, 1.0720, 1.0750/541.0800/15 (605m), 1.0850 (963m), 1.0875/85 (643m)1.0900 (1.91bn), 1.0915/25 (824m), 1.0950 (2.44bn)1.1000 (1.02bn), 1.1035GBPUSD1.2650 (925m)1.27001.2800 (613m), 1.2850, 1.28751.2900 (787), 1.2920/251.3000 (971m)AUDUSD0.7500, 0.7550, 0.7560 0.7600, 0.7615, 0.7640, 0.7650USDCAD1.3550EURJPY116.00, 116.30, 116.75 (1.2bn)119.50 121.86/122.00 123.30USDCHF0.9890 1.0095EURGBP0.8300, 0.8350 (1.05bn)0.8400

The single currency is prolonging its correction lower from peaks near 1.0930 vs. the buck earlier in the week, now sending EUR/USD to test the lower

The single currency is prolonging its correction lower from peaks near 1.0930 vs. the buck earlier in the week, now sending EUR/USD to test the lower bound of the range near 1.0860.EUR/USD attention to EMU, US dataThe pair has quickly faded the spike to level beyond 1.0900 the figure on Thursday following an initial hawkish tone by President M.Draghi at his press conference after the ECB left unchanged its monetary status quo. However, the selling pressure started to gather pace around EUR after the Governing Council said it did not discussed easing the current accommodative bias while Draghi asserted once again that the bank’s assessment on inflation stays unchanged. In the data space, EMU’s advanced inflation figures for the month of April are the salient point in Euroland today, while flash Q1 GDP figures will take centre stage in the US docket.EUR/USD levels to watchAt the moment, the pair is losing 0.09% at 1.0863 facing the immediate support at 1.0850 (low Apr.27) seconded by 1.0833 (200-day sma) and finally 1.0805 (23.6% Fibo of the April rally). On the flip side, a break above 1.0933 (high Apr.27) would target 1.0951 (2017 high Apr.25/26) en route to 1.1000 (psychological handle).

The USD/JPY pair edged lower on Friday and eroded part of previous session's up-move, albeit has managed to hold its neck above the 111.00 handle. Th

The USD/JPY pair edged lower on Friday and eroded part of previous session's up-move, albeit has managed to hold its neck above the 111.00 handle. The Japanese Yen got a safe-haven boost following the US President Donald Trump's comments on the geopolitical conflict in the Korean peninsula. Trump said that a major conflict with N. Korea is possible, although he wants the crisis to be resolved peacefully.  Meanwhile, market seems to have largely ignored mixed Japanese economic data - national CPI, industrial production and household spending missing expectations, while retails sales, jobs and Tokyo CPI printing stronger-than expectations reading.    •  Japan: Core inflation still on uptrend – NomuraAgainst the backdrop of recent disappointments from the incoming US economic data, including Thursday's dismal durable goods orders data, investors now await the release of US advance Q1 GDP figures for some fresh impetus.    •  US: Q1 GDP tracking estimate lowered by 0.6pp to 0.2% from 0.8% - NomuraIn the meantime, the broader market risk-sentiment would remain an exclusive driver of the pair's movement through Friday's trading session. Technical levels to watchImmediate support is pegged near the 111.00 handle, below which the pair is likely to accelerate the slide back towards 110.60-55 horizontal support ahead of the key 110.00 psychological mark. On flip side, momentum above 111.35 level (session top) might continue to face fresh support near 111.60-80 region, which if cleared decisively has the potential to lift the pair beyond the 112.00 handle towards testing 112.20 hurdle (March 31 high).

Analysts at Nomura explains that they have been – and remain – positive about the growth and inflation outlook for the eurozone and continue to expect

Analysts at Nomura explains that they have been – and remain – positive about the growth and inflation outlook for the eurozone and continue to expect incoming dataflow to surprise the consensus on the upside.Key Quotes“One of the important – and, in our view, under-appreciated – reasons for our optimism is the improvement that is taking place in many European economies’ labour markets. Labour market activity in nearly every major European sector and every major country has been improving in recent months. Youth unemployment has fallen very sharply in a number of economies and most notably in Italy. That bodes well for wages inflation and thus for retail sales in the period ahead. On that last point falling youth unemployment tends to be very positive for consumer spending trends. Not only does it generate firmer household income growth. It also tends to unleash strong pent-up demand via higher spending on consumer durables.”

France Gross Domestic Product (YoY) declined to 0.8% in 1Q from previous 1.1%

Analysts at TDS note that the ECB left rates, QE, and forward guidance all unchanged at this week’s meeting, as had been fully expected. Key Quotes

Analysts at TDS note that the ECB left rates, QE, and forward guidance all unchanged at this week’s meeting, as had been fully expected.Key Quotes“The question for us going into the opening statement was what the ECB would say about the balance of risks around growth, which were found to still be tilted to the downside, but the language is getting closer to balanced. Draghi once again sounded more upbeat on the outlook for growth, both domestically and abroad.” “In the press conference though, Draghi sounded increasingly comfortable with the forward guidance as is, and while consensus is looking for the ECB to drop the “or lower” guidance on rates in June, it’s not clear that this is the most likely outcome.” “Because of this, markets took a slightly dovish view of today’s ECB decision, with bund yields slipping from a high of just over 0.36% during the more upbeat opening statement to 0.33% by the end of the press conference, while the EUR followed a similar path, slipping from a high of 1.0933 to around 1.0870.” “FX Outlook & Strategy: We see notable risks that the recent rally in EURUSD has run out of steam – for now. We simply do not think investors have enough justification to chase a push above 1.0950 should one occur. As a result, this leaves EURUSD looking a little toppy for the time being.”

The GBP/USD pair retreats slightly from six-month tops reached at 1.2916 last hour, although remains slightly bid above 1.29 handle, as we progress to

The GBP/USD pair retreats slightly from six-month tops reached at 1.2916 last hour, although remains slightly bid above 1.29 handle, as we progress towards the European opening bells. Cable enters a consolidative mode, as the bulls take a breather and await fresh impetus from the UK prelim GDP report, which will be reported at 8.30GMT later today. Markets are expecting the UK Q1 growth to have slowed its pace of expansion to 0.4% q/q from the previous quarter’s 0.7% reading. The spot could take a beating on a softer GDP print and test 1.28 handle, as investors would take profits off the table after the recent upsurge. On an upside surprise, the prices are likely to rally hard in a bid to conquer 1.30 handle, extending the ongoing unwinding of GBP shorts. However, the extent of the move in cable would also depend on the upcoming US Q1 GDP report, followed by Chicago PMI and revised consumer sentiment data.GBP/USD Levels to consider             A break above 1.2916 (6-month highs) could lift the pair above 1.2950 (psychological levels), beyond which a test of 1.2948 (flash crash high) is imminent. Conversely, a break below 1.2859 (5-DMA), leading to a subsequent break below 1.2836 (10-DMA) is likely to drag the pair towards testing its next support near 1.2800 (round figure).

The research team at Nomura has lowered their Q1 GDP tracking estimate for the US economy by 0.6pp to 0.2% from 0.8% Key Quotes “The weakness in Mar

The research team at Nomura has lowered their Q1 GDP tracking estimate for the US economy by 0.6pp to 0.2% from 0.8%Key Quotes“The weakness in March retail and wholesale inventories suggests that inventory accumulation in Q1 was weaker than we expected. This development implies that the drag from inventory accumulation was stronger than we estimated. However, the advance estimate of March goods trade deficit, released with the inventory data, was slightly narrower than we expected, which is positive to our tracking model. Additionally, incoming information suggests that the BEA will not incorporate retail sales annual revisions into the advance estimate of Q1 GDP growth.” “The reversal of the impact of these revisions on our Q1 GDP tracking model was positive to our tracking estimate. Combining these developments, we are lowering our Q1 GDP tracking estimate by 0.6pp to 0.2% from 0.8%. Note that the advance estimate of Q1 GDP growth by the Bureau of Economic Analysis (BEA) will be released today.”

France Gross Domestic Product (QoQ) came in at 0.3%, below expectations (0.4%) in 1Q

According to the analysts at ANZ, stronger than expected Q1 CPI print of NZ has understandably led to increased debate around the appropriateness of t

According to the analysts at ANZ, stronger than expected Q1 CPI print of NZ has understandably led to increased debate around the appropriateness of the RBNZ’s neutral stance.Key Quotes“We remain comfortable with their view of the OCR on hold until next year, with global uncertainties, mandate uncertainty, tighter credit conditions, two false tightening cycles in recent years, and the lack of broad based inflation pressures all flagging a high hurdle to kick off another tightening cycle. Against this backdrop, we expect any lift in short end rates to be bought/ received into.” “New Zealand long end rates remain inextricably linked to US rates, which continue to edge lower and are now in a new trading range. Absent a break back through the key 2.3% level in US 10 year Treasuries, with the US data pulse softening abruptly, it’s difficult to envisage US bond yields rising too far for now. Increased talk of delayed Fed hikes is having a dampening impact, as are geopolitical risks.”

Analysts at TDS expect the CBR to cut its key Rate by 25 bps to 9.5% at its board meeting today; this is in line with the consensus.  Key Quotes “At

Analysts at TDS expect the CBR to cut its key Rate by 25 bps to 9.5% at its board meeting today; this is in line with the consensus. Key Quotes“At the March meeting the CBR cut the Key Rate by 25 bps, the first cut since September 2016, mainly on the grounds that inflation had slowed down faster than they had forecast. The press statement said that the CBR admitted “the possibility of cutting the key rate gradually in coming Q2-Q3”. The CBR has its eyes fixed on achieving its 4% inflation target by end-2017, but with CPI inflation at 4.3% Y/Y in March and USDRUB trading near the recent lows, we think the CBR can risk cutting by another 25bps. We expect the CBR to keep cautiously cutting its Key Rate over the rest of this year, bringing it to 8.25% by year-end.”

Japan Construction Orders (YoY): 1.1% (March) vs previous 5.7%

The analysis team at Nomura notes that the March all-Japan core CPI was 0.2% y-y, flat from February and in line with the consensus forecast. Key Quo

The analysis team at Nomura notes that the March all-Japan core CPI was 0.2% y-y, flat from February and in line with the consensus forecast.Key Quotes“The breakdown shows an ongoing marked upward contribution from energy prices (energy prices boosted the core CPI by +0.17ppt more than in February), but this was cancelled out by weakness in the core portion.” “The all-Japan core CPI was -0.3%, which is a wider margin of decline than February's -0.1%. The larger decline in the core CPI itself, however, was no major surprise, having to some extent been flagged in the Tokyo area data for February.” “April Tokyo core CPI above market consensus forecastThe April Tokyo core CPI (general, excluding fresh food) was -0.1% y-y, above the consensus (Bloomberg survey median) forecast of -0.2% and a substantial improvement from March's -0.4%. The breakdown shows that the energy and core foods portions pushed up the core CPI. In addition, mobile phone prices, which contributed substantially to the decline in March, pushed up y-y growth in the April core CPI by 0.08ppt. At the same time, the Tokyo core CPI, which excludes energy and food (except alcoholic beverages) was -0.4% in April, maintaining the pace of decline seen in March (-0.4%). Price movements for durables and other goods varied by category, but overall growth remained sluggish. Although we have noted the possibility of a gradual lifting of downward pressure on prices caused by the lingering effect of past yen appreciation, we also note the risk that the timing of this could be put back slightly.” “Note near-term risk of delays in core recovery We think the primary takeaway from today's data release is that the Tokyo core CPI remained weak despite the various price hikes since the beginning of 2017. Looking ahead, we expect a continued uptrend in core inflation on the positive contribution from energy prices and a gradual recovery in the core portion. We advise caution, however, as we see a risk that momentum for core inflation could slow as the recovery in the core portion is put back slightly.”

BBC reporting latest Brexit headlines, citing that the UK is urgently drawing up new laws that will enable it to continue imposing sanctions on foreig

BBC reporting latest Brexit headlines, citing that the UK is urgently drawing up new laws that will enable it to continue imposing sanctions on foreign countries after Brexit.Key Quotes:“The official consultation over the new laws began last Friday only hours before the pre-election ban on announcing new legislation - known as purdah - came into force.” “It will be rushed through in just nine weeks so a new bill can be put to parliament as soon as possible after the general election in June.” “The new laws will allow the UK for the first time to impose substantial sanctions on another country's trade by itself.”

Japan Housing Starts (YoY) registered at 0.2% above expectations (-2.4%) in March

Japan Annualized Housing Starts increased to 0.984M in March from previous 0.94M

The research team at TDS points out that the markets are looking for UK GDP to decelerate from 0.7% q/q in Q4 to only 0.4% q/q in Q1. Key Quotes “We

The research team at TDS points out that the markets are looking for UK GDP to decelerate from 0.7% q/q in Q4 to only 0.4% q/q in Q1.Key Quotes“We think that the risks lie to the upside and look for +0.5%. GDP has come in above consensus in 3 of the last 5 quarters, and on consensus the other 2 quarters, so we’ve seen a long pattern of markets underestimating the strength of the UK economy.”

In view of the analysts at Nomura, Japanese economic momentum is strengthening as the BOJ upgraded its assessment on the economy yesterday, while high

In view of the analysts at Nomura, Japanese economic momentum is strengthening as the BOJ upgraded its assessment on the economy yesterday, while highlighting that exports have been on an increasing trend.Key Quotes“In fact, Japanese industrial production and real exports have been recovering since mid-last year. Japan’s manufacturing PMI has recovered too, with the latest reading pointing to an ongoing rise in exports. The improved Asian export cycle will also likely support Japanese exports for the time being.” “Stronger export volumes have been boosting Japan’s trade balance since mid-last year. In contrast, import volumes have been roughly flat over the past 12 months. As a result, the trade balance has improved in real terms since last summer.” “In nominal terms though, Japan’s trade balance has been roughly flat, as prices of imports and exports are working negatively for it. This is primary owing to the recovery in energy prices in JPY terms. Nominal mineral fuel imports recovered to JPY17.9trn (annualized) in March, while they reached just JPY9.4trn in April 2016. The estimated contribution from price changes (terms-of-trade changes) to the trade balance has deteriorated by JPY5.3trn between February 2016 and March 2017, offsetting much of the positive impact from real exports during the period (+JPY6.3trn).” “The latest US Treasury FX report advocated that Japan needs to use all policy levers including accommodative monetary policy to support domestic demand growth, as weak domestic activity is contributing to Japan’s trade imbalances. In fact, as the oil price recovery has stalled recently, with no recovery in imports and domestic demand Japanese external balance could start widening again, as real exports will increase further. The positive exports data and higher energy prices have been offsetting each other, but the momentum of real imports will be important for Japan’s external balance (and hence trade policy discussions) going forward.”

Andrew Hanlan, Economist at Westpac, explains that Australian credit growth to the private sector was relatively soft for a third consecutive month, w

Andrew Hanlan, Economist at Westpac, explains that Australian credit growth to the private sector was relatively soft for a third consecutive month, with weakness in the month once again centred on the volatile business segment.Key Quotes‘Total credit grew by 0.3% in March, matching the February outcome and following a 0.2% rise in January. Results for the month of March were mixed by segment, with housing posting a gain of 0.5%, business being flat and personal credit declining by 0.3%.” “Annual total credit growth is now 5.0%, well below the peak of 6.7% in September 2015. For housing, annual growth is 6.5%, below the 7.5% of late 2015. While for business, annual growth has slipped to 3.4%, down from a high of 7.3% in April 2016.” “For the March quarter, monthly growth in total credit averaged 0.3%, representing a correction to the above par 0.6% average in the final quarter of 2016.” “It appears that momentum in investor credit has already peaked, with 3 month annualised growth in March 2017 moderating a little to 8.2%. A further moderation is in prospect. In March, APRA announced additional prudential measures aimed at strengthening lending standards for housing, with a focus on investors. In addition, there have been out of cycle rate increases from the banks.” “Volatility in business lending has generated what we would describe as a 'stop-start' profile for business credit. In the March quarter 2017, business credit edged 0.5% lower, partially reversing a 2.2% surge in the December quarter. Annual growth has slowed to 3.4%, following outcomes of 4.7% for 2014; 6.4% for 2015; and 5.5% for 2016.” “Fundamentals point to moderate growth in business credit over the coming months. Business confidence has trended higher in 2017, to be mildly positive, against the backdrop of improved conditions globally. Still relatively low interest rates are supportive and surveys report that finance is relatively 'easy to find'. However, a constraint is that investment in the real economy by the non-mining sectors remains relatively sluggish.”

Analysts at Nomura note that the BOJ left its policy unchanged as widely expected in its latest meet and while the Bank’s view on the economy has impr

Analysts at Nomura note that the BOJ left its policy unchanged as widely expected in its latest meet and while the Bank’s view on the economy has improved, but its inflation forecast was lowered.Key Quotes“The Bank’s risk assessment is also still skewed to the downside. The BOJ’s dovish stance has not changed materially. Governor Kuroda repeated that it is premature to discuss the exit strategy. He said the BOJ needs to achieve the 2% inflation target before talking about the exit, although CPI inflation is unlikely to exceed 2% in a stable manner until after FY2018.” “The market now likely expects the BOJ’s next policy change to be tightening/normalisation, but Governor Kuroda’s stance suggests the likelihood of near-term normalisation remains low. The BOJ’s reluctance to discuss its exit strategy should limit upside risk for JPY, while the BOJ still needs external tailwinds for JPY weakness.”

The research team at TDS points out that we have several data releases of varying importance, with the top one Eurozone CPI at 10am BST. Key Quotes

The research team at TDS points out that we have several data releases of varying importance, with the top one Eurozone CPI at 10am BST.Key Quotes“After the upside surprises in Germany and Spain yesterday, we revised our forecast from 1.7% y/y to on-consensus 1.8% y/y for April (a larger bounce in services prices than we anticipated).  Other data releases this morning include French Q1 GDP (consensus +0.4% q/q) and Eurozone M3 data, plus French and Italian CPI.”

The EUR/JPY pair is seen consolidating yesterday’s drop in the upper bound of 120 handle, remaining well offered amid risk-aversion and dovish ECB. E

The EUR/JPY pair is seen consolidating yesterday’s drop in the upper bound of 120 handle, remaining well offered amid risk-aversion and dovish ECB.EUR/JPY: Yen firmer, despite mixed Japanese dataThe EUR/JPY pair now drops -0.18% to 120.80, clinging to strong support near 120.70 region. The spot stalled its selling spiral, as the bears take a breather before the next push lower. The cross remains under pressure, in wake of a dovish tilt from the ECB, which disappointed markets, as they had expected Draghi to offer some hints on tapering. Meanwhile, persisting risk-aversion on the back of lingering geo-political tensions around North Korea, boosts the safe-haven bids for the yen, thus, collaborating to the downside in the cross. Later today, the pair will get influenced by the German retail sales, Eurozone CPI and US Q1 GDP report.EUR/JPY: Technical Levels                                Higher side: 121.50 (psychological levels) 121.73 (classic R1), 122 (6-week tops) Lower side: 120.39/28 (classic S2/ 100-DMA), 120 (zero figure), 119.37 (50-DMA)

The research team at ANZ explains that while the lift in NZ’s headline inflation can be discounted to some degree, the latest CPI figures still reinfo

The research team at ANZ explains that while the lift in NZ’s headline inflation can be discounted to some degree, the latest CPI figures still reinforce that core inflation is grinding higher, albeit gradually and not broadly enough to shift the RBNZ’s stance at this stage.Key Quotes“Slow rises in core inflation are something we expect to continue amidst a lot of economic uncertainty (the impact of a sizeable tightening in financial conditions being a major one; the global situation is another).” “The RBNZ will welcome headline inflation back at the target midpoint. It certainly feels like it has been a while in the making.” “But we doubt the figures will spur the RBNZ to dramatically shift its stance just yet. Yes, the figures were well above the RBNZ’s February forecasts, and some measures of core inflation (weighted median and trimmed mean especially) are now back over 2%. However, the signals were far from unanimous. The RBNZ’s own Sectoral Factor Model was unchanged at 1.5% y/y (reinforcing that a lot of the price rises in Q1 were due to idiosyncratic factors), and there remains limited evidence of domestic inflation pressures broadening beyond housing (annual non-tradable inflation excluding housing was stable at 1.9%). Not only this, but there is still only tentative evidence at best that price pressures are spilling into the labour market (wages). And we’ve had two false tightening starts before, only to see inflation fade.” “Our forecasts depict headline inflation continuing to bob around the 2% level. However, there are offsetting moves at the components level, with domestic inflation expected to continue to slowly grind higher, while tradable inflation should ease from current levels.”

According to the latest Reuters survey of five Japan-based fund managers, the respondents increased their equity exposure in April at the expense of t

According to the latest Reuters survey of five Japan-based fund managers, the respondents increased their equity exposure in April at the expense of the Japanese bonds.Key Details:“Respondents on average wanted to allocate 39.1 percent of their model portfolios to stocks in April, from 38.7 percent in March Respondents kept their allocations to North American, euro zone and Japanese equities unchanged from the previous month at 28.0 percent, 8.3 percent and 43.8 percent, respectively Raised their overall bond exposure to 55.5 percent in April from 55.1 percent in March Reduced their North American bond holdings to 31.9 percent from 35.1 percent while increasing euro zone debt exposure to 20.5 percent from 16.8 percent. The respondents trimmed their Japanese bond exposure to 37.3 percent in April from 38.4 percent in March.”            

Qatar's Minister of Energy and Industry HE Dr Mohamed bin Saleh al-Sada at the Atlantic Council summit in Istanbul late-Thursday, noted that the glo

Qatar's Minister of Energy and Industry HE Dr Mohamed bin Saleh al-Sada at the Atlantic Council summit in Istanbul late-Thursday, noted that the global energy markets are heading in the right direction.Key Points via Gulf Times:A decade of high oil prices had led to a dangerous oversupply, price falls and now an "unprecedented shrinkage" in investment "A balancing was bound to happen. What we want to do is to hasten that process of balancing" "The agreement was very successful and it helped the process of rebalancing" "It (the market) is picking up. We hope to get a more accelerated balancing process in the second half of the year" 

After the Kremlin meeting with the Japanese PM Abe late-Thursday, Russian President Vladimir Putin warned that the crisis over North Korea’s nuclear p

After the Kremlin meeting with the Japanese PM Abe late-Thursday, Russian President Vladimir Putin warned that the crisis over North Korea’s nuclear program is deepening, Bloomberg reports. Putin and Abe are also trying to settle the dispute over the sovereignty of islands known as the Northern Territories in Japan and the South Kurils in Russia.Key Quotes:The situation on the Korean peninsula has “seriously deteriorated.”  “We call on all states involved in the region’s affairs to refrain from military rhetoric and seek peaceful, constructive dialogue.”

As per FT report, European stock funds enjoyed their largest weekly inflows since late-2015 on French election relief. “Investors added $2.4bn to fun

As per FT report, European stock funds enjoyed their largest weekly inflows since late-2015 on French election relief. “Investors added $2.4bn to funds that invest in Western European stocks in the week to April 26, up nearly fourfold from a week prior”, the report says. Macron, who supports European integration, came out victorious in the first round of the French elections. More importantly, Macron maintains a healthy lead and is seen beating the anti-EU candidate Marine Le Pen in the second round by a big margin. The increased fund flow into European stocks clearly explains the surge in the EUR pairs seen this week. 

Asian equities trade on the back foot on the last trading day of the month on geopolitical risks. The MSCI Asia Pacific Index edged lower after climb

Asian equities trade on the back foot on the last trading day of the month on geopolitical risks. The MSCI Asia Pacific Index edged lower after climbing for six straight sessions. Japan’s Nikkei fell 44 points as the bullish momentum in the Dollar-Yen pair ran out of steam. Shanghai Composite Index dipped 11 points, but remained above the 200-DMA line of 3135 levels. Geopolitical tensions resurfaced by after President Trump said there is a chance of a “major, major” conflict with North Korea. Despite the pullback today the regional benchmark index is still set to end higher for the fourth straight month. On the data front, the preliminary US GDP due later today is expected to show the economy expanded at a 1% annualised rate in the first quarter, the weakest pace in a year.

The EUR/USD pair found support once again near 1.0855 region, and attempted a minor-bounce from there in a bid to regain 1.0875 amid waning US dollar

The EUR/USD pair found support once again near 1.0855 region, and attempted a minor-bounce from there in a bid to regain 1.0875 amid waning US dollar demand across the board. The greenback came under fresh selling pressure against most its major peers, following headlines from the US President Trump on North as well as on South Korea. Also, reports of the US House delaying the Trumpcare bill again until next week weighed down on the sentiment around the buck, lifting the EUR/USD pair. However, the bulls lack momentum, despite persisting risk-off moods, as a dovish tone maintained by the ECB continues to hurt the Euro. The ECB left the monetary policy settings unchanged at its policy meeting a day before, noting that the governing council hadn’t discussed a QE exit strategy and reiterated that bank could extend the QE beyond 2018 if necessary. Looking ahead, the US Q1 GDP figures and French election R2 will remain the two biggest drivers for the spot, with the US advance GDP data expected to come in at 1.3% q/q versus 2.1% last. BBG Survey: US Q1 GDP seen bouncing back but not reaching Trump’s targetIn the meantime, the German retail sales, Eurozone flash CPI estimate and money supply data will be eyed for fresh impetus on the prices.EUR/USD Technical LevelsTechnical resistances for the pair are aligned at 1.0920/33 (classic R1/ Apr 27 high), 1.0950/51 (psychological levels/ 5-month tops) and finally 1.1000 (key resistance). On the flip side, the spot finds next support at 1.0857/50 (daily & Apr 27 low), a break below that level could open the door to 1.0820/19 (10-DMA/ Apr 24 low) and 1.0802 (classic S2/ Fib S3).

It’s been a frustrating 1-1/2 month for GBP/USD bears as the pair continues to strengthen despite weak economic data, Brexit uncertainty and May’s cal

It’s been a frustrating 1-1/2 month for GBP/USD bears as the pair continues to strengthen despite weak economic data, Brexit uncertainty and May’s call for UK snap elections.UK Q GDP - is the bad news already priced-in?Pair’s rally from the low a low of 1.2109 (Mar 14 low) has been partly fuelled by broad based US dollar weakness and partly due to expectation that Theresa May will secure a larger majority in the June 8 general election. However, on the way higher, the British Pound has totally ignored the sharp rise in inflation and the resulting pressure on real incomes. There is evidence that UK consumer spending has taken a hit. The resilience in Sterling suggests much of the negative news has been priced-in. Consequently, the preliminary UK GDP release could turn out to be a non -event for the markets, unless the number prints way below the estimates. The UK Q1 growth rate is seen slowing to 0.4% q/q from the previous quarter’s 0.7% reading. A weaker-than-expected figure could yield a technical pull back, given the overbought conditions on the intraday charts. Strong support at 1.26 could be put to test over the next few days. On the other hand, a positive surprise would shake out a few more GBP bears, thus opening doors for 1.30 handle. There is consensus in the market that Pound’s sharp rally this month is the result of the unwinding of the shorts.GBP/USD Technical LevelsThe pair jumped above 1.29 handle in Asia and was last seen trading around 1.2910 levels. The unwinding of shorts could gather pace if the spot breaks above 1.30, thus opening doors for 1.3119 (June 2016 low). On the downside, failure to hold above the weekly 50-MA level of 1.2845 could yield a sell-off to 1.2631 (weekly 5-MA).    

Politico reports latest headlines from the US, citing that House Republican leaders delayed a vote on their Obamacare repeal bill until next week at t

Politico reports latest headlines from the US, citing that House Republican leaders delayed a vote on their Obamacare repeal bill until next week at the earliest, denying President Trump a major legislative win during his first 100 days in office.Key Quotes:“Speaker Paul Ryan and his top lieutenants decided during a late-night huddle in the Capitol that they still do not have the votes to pass the stalled health-care legislation. At least 15 House Republicans remain solidly opposed to the bill, with another 20 leaning no or still undecided, according to GOP lawmakers and aides. House Republicans can only lose 22 votes.”

More comments hitting the wires from the US President Trump, as he continues to speak in an interview with Reuters. Headlines: Trump tells Reuters b

More comments hitting the wires from the US President Trump, as he continues to speak in an interview with Reuters.Headlines:Trump tells Reuters bailing out Puerto Rico for "billions and billions of dollars" is not fair to people in US states Says "if there's a shutdown, there's a shutdown;" it would be Democrats' fault Says upcoming trade deals will make up for deficits under his tax-cut proposals

The AUD/JPY cross wiped-out gains and fell back into the red zone near 83 handle, following the release of mixed Australian datasets. The Australian

The AUD/JPY cross wiped-out gains and fell back into the red zone near 83 handle, following the release of mixed Australian datasets. The Australian PPI data better estimates, arriving at 0.5% in the reported month, versus 0.3% expectations, while the private sector credit data disappointed, coming in at 0.3% versus 0.5% estimated. Moreover, the cross came under renewed selling pressure, as the yen regained ground amid moderate risk-aversion persisting in Asia, with the Asian indices trading in negative territory. Also, the yen markets appear to ignore a slew of mixed Japanese macro news, and continue to benefit from risk-off trades, weighing down on the AUD/JPY cross. Next of relevance for the cross remains the US GDP data due later in the NA session. In the meantime, risk trends will play a crucial role.Technical LevelsHigher side: 83.84/81 (classic R2/ Apr 25 high), 84.47/50 (Apr 5 high/ psychological levels), 85 (round number) Lower side: 82.72 (20 & 10-DMA), 82.28 (classic S2/ Fib S3), 82.00 (key support)

AUD/USD remains flat lined around 0.7470 (resistance offered by trend line coming from Mar 21 high and Mar 30 high) following the Aussie PPI release.

AUD/USD remains flat lined around 0.7470 (resistance offered by trend line coming from Mar 21 high and Mar 30 high) following the Aussie PPI release. The Producer Price Index (PPI) came-in at 1.3% y/y in the first quarter, which is significantly higher than the previous quarter’s 0.7% reading. The quarter-on-quarter reading remained unchanged at 0.5%. The uptick in the annualised figure suggests CPI inflation may pick up pace ahead, but, the AUD is in no mood to strengthen. Moreover, the data released earlier this week showed a drop in the Australia headline consumer price inflation in the first quarter. With treasury yields going nowhere, there is little incentive for traders to boost the American dollar. However, things might change later if the US preliminary Q1 GDP betters estimates.AUD/USD Technical LevelsA break below 0.7455 (Apr 26 low) would open up downside towards 0.7430 (Jan 12 low) and 0.70 (zero figure). On the other hand, a break above 0.75 (5-DMA) would expose hurdle at 0.7522 (10-DMA) and 0.7530 (100-DMA).  

Reuters reporting additional headlines from the US President Trump, speaking on North Korea and NAFTA. Key Headlines: US President Trump tells Reute

Reuters reporting additional headlines from the US President Trump, speaking on North Korea and NAFTA.Key Headlines:US President Trump tells Reuters he will renegotiate or terminate "horrible" trade deal with South Korea Says he wants South Korea to pay for $1-billion THAAD missile defense system Tells his administration is in discussions with Israel and Saudi Arabia for possible visits Says Saudi Arabia has "not treated us fairly," US  is losing money defending kingdom Tells he was "psyched to terminate NAFTA " before telephone calls from Canadian and Mexican leaders

US President Donald Trump, while talking to Reuters in an Oval Office interview ahead of his 100th day in office on Saturday, said “there is a chance

US President Donald Trump, while talking to Reuters in an Oval Office interview ahead of his 100th day in office on Saturday, said “there is a chance that we could end up having a major, major conflict with North Korea. Absolutely” and added “we would love to solve things diplomatically but it’s very difficult”.

Australia Private Sector Credit (YoY) unchanged at 5% in March

Australia Producer Price Index (QoQ) remains at 0.5% in 1Q

Australia Private Sector Credit (MoM) remains unchanged at 0.3% in March

Australia Producer Price Index (YoY) up to 1.3% in 1Q from previous 0.7%

China’s central bank, the PBOC injects a net 70 bln Yuan from the market for the week via Open Market Operations (OMOs), versus a net drainage of 17

China’s central bank, the PBOC injects a net 70 bln Yuan from the market for the week via Open Market Operations (OMOs), versus a net drainage of 170 bln Yuan a week ago, Reuters reports. Meanwhile, the PBOC injects CNY 40 bln via 7 day reverse repos, CNY 20 bln via 14 day reverse repos and CNY 20 bln via 28 day reverse repos, traders cited.

The steady recovery in NZD/USD pair met fresh supply just below 0.69 handle, with downbeat ANZ business confidence data now pushing the rate towards d

The steady recovery in NZD/USD pair met fresh supply just below 0.69 handle, with downbeat ANZ business confidence data now pushing the rate towards daily lows reached at 0.6875. The sentiment around the Kiwi remains weighed down by poor NZ fundamentals, in the wake of below estimates trading surplus figures and weaker business confidence data. New Zealand ANZ Business Confidence down to 11 in April from previous 11.3Moreover, risk-off seeps back into Asia amid negative Asian stocks and latest comments from the US President Trump on North Korea, keeps any bounce in the risk currency – NZD short-lived.Further, the spot also feels the heat of a broad based US dollar recovery, as attention now turns towards the key US Q1 GDP data due later in the NA session.NZD/USD Levels to consider                                                                               To the upside, the next resistance is located at 0.6890/0.6900 (daily top/ round number), above which it could extend gains to 0.6920/24 (classic R1/ 5-DMA) and from there to 0.6976/89 (10 & 20-DMA/ 50-DMA). To the downside immediate support might be located at 0.6948 (10-month lows), and from there to 0.6811 (classic S2/ Fib S3), below 0.6750 (psychological levels) would be tested.

The People's Bank of China (PBOC) set the Yuan midpoint rate/reference rate at 6.8931 vs. 6.8896 on Thursday.

The People's Bank of China (PBOC) set the Yuan midpoint rate/reference rate at 6.8931 vs. 6.8896 on Thursday.

Brent oil is trading flat around $52.00/barrel this Friday morning in Asia following a sharp rebound from the 200-DMA level in the overnight trade. A

Brent oil is trading flat around $52.00/barrel this Friday morning in Asia following a sharp rebound from the 200-DMA level in the overnight trade.Are we witnessing a repeat of technical pattern?Over the last eight months, dips below 200-DMA proved to be short lived and were followed by a fresh uptrend as the RSI was oversold/close to being oversold. Such a move was first seen in early Aug 2016 and was repeated November 2016 and March 2017.Glass half fullThe sell-off in Brent from the recent high of $56.62 came to halt at the 200-DMA line earlier this week. Prices dipped below the 200-DMA yesterday, only to recovery sharply by NY closing. So will the rebound from the 200-DMA result in fresh rally as seen in Aug 2016, Nov 2016 and March 2017?Glass half emptyWhat is different this time is the fact that the daily RSI is nowhere close to being oversold (below 30.00). The RSI currently stands at 40.00. Hence, it will be interesting to see if the rebound from 200-DMA continues or fizzles out. Oil traders would closely watch the Baker Hughes weekly US oil rig count report due for release in the late NY session today.Brent Oil Technical LevelsA break above $52.13 (previous day’s high) would open doors for $52.60 (resistance offered by Jan 2016 low and Nov 2016 low) and $53.00 (zero levels). On the other hand, a breakdown of support at $51.37 (200-DMA) would expose support at $50.88 (Mar 13 low) and $50.44 (Apr 27 low).  

In a Reuters’ interview, the US President Trump warns that there is a chance of "a major, major conflict with North Korea." Key Points: There is a c

In a Reuters’ interview, the US President Trump warns that there is a chance of "a major, major conflict with North Korea."Key Points:There is a chance of "a major, major conflict with North Korea" North Korea is his biggest global worry Would like to resolve North Korea situation diplomatically "but it's very difficult" Chinese president Xi "is doing everything in his power" to help with North Korea situation He credits North Korean leader Kim, "Not many 27-year-old men could go in and take over a regime"

New Zealand ANZ Activity Outlook down to 37.7% in April from previous 38.8%

New Zealand ANZ Business Confidence down to 11 in April from previous 11.3

After the US President Trump agreed not to terminate the NAFTA at the current time and expressed optimism about winning better US terms in a renegotia

After the US President Trump agreed not to terminate the NAFTA at the current time and expressed optimism about winning better US terms in a renegotiated deal on Thursday, the Canadian PM Trudeau and Mexican President Nieto showed their willingness to negotiate NAFTA with Trump early Friday.

Analysts at Nomura offered their projections for today's USD/CNY fix. Key Quotes: "Our model1 projects the fix to be 88 pips higher than the previou

Analysts at Nomura offered their projections for today's USD/CNY fix.Key Quotes:"Our model1 projects the fix to be 88 pips higher than the previous fix (6.8984 from 6.8896) and 62 pips higher than the previous official spot USD/CNY close of 6.8922. The basket implied change is 72 pips higher than the previous official spot USD/CNY close (6.8994 from 6.8922)."

Livesquawk reports latest headlines from the RBNZ, after the central bank published its latest banking industry newsletter. Key Points: Remains conc

Livesquawk reports latest headlines from the RBNZ, after the central bank published its latest banking industry newsletter.Key Points:Remains concerned over high house prices Expects debt-to-income consultation paper within 6 weeks Full text here

Following are the headlines from RBA board member Ian Harper, from an interview with the Wall Street Journal (WSJ) published late-Thursday. Harper sa

Following are the headlines from RBA board member Ian Harper, from an interview with the Wall Street Journal (WSJ) published late-Thursday. Harper said he was upbeat about recent growth in fulltime employment and a rise in hours worked across the economy "These latest figures [for March] are an encouraging sign that maybe the weakness in the labour market is beginning to turn" Mr. Harper said the increased focus on employment was linked directly to concerns that softness in the job market could stymie already record low wages growth, and hold back rises in inflation "While the labour market is weak, wages growth will be low, and while wages growth is low you can't expect to see much of a pick-up in inflation"

US Secretary of State Rex Tillerson, while speaking to Fox News, said China has asked North Korea not to conduct any more nuclear tests; else it would

US Secretary of State Rex Tillerson, while speaking to Fox News, said China has asked North Korea not to conduct any more nuclear tests; else it would impose unilateral sanctions. “We were told by the Chinese that they informed the regime that if they did conduct further nuclear tests, China would be taking sanctions action on their own”, said Tillerson. So far there has been no confirmation from Beijing.

The JPY bulls retain control following a slew of mixed Japanese economic data released last hour, fuelling fresh supply in USD/JPY, in an attempt to c

The JPY bulls retain control following a slew of mixed Japanese economic data released last hour, fuelling fresh supply in USD/JPY, in an attempt to cap the recovery once again near 111.35 levels. Japan’s national CPI, industrial production and household spending missed expectations, while the Japanese retails sales, jobs and Tokyo CPI figures came in stronger-than expectations. However, the Japanese macro news painted a mixed picture of the economy, leaving markets largely unimpressed. The spot caught a fresh bid tone last hour, in response to the extension of broad USD, with the USD index now breaking higher above 99 handle. Markets looked past yesterday’s downbeat US dataflow, as focus shifts towards the much-awaited US advance Q1 GDP report and revised consumer sentiment data, which will wrap up an eventful week. However, the upside attempts remain capped amid negative Japanese stocks, which boost safe-haven flows into the yen. Meanwhile, markets digest the Japanese data dump and look forward for fresh impetus from risk sentiment ahead of the US macro news due later in the NA session.USD/JPY Technical levels                  A break above 111.60 (Apr 27high) would expose 111.78 (4-week tops) and 112 (round figure). On the other hand, a breach of support at 111 (key support) could yield a test of 110.88 (5-DMA) and 110.01/00 (10-DMA/ zero figure).  

Currently, EUR/JPY is trading at 120.86, down -0.09% on the day, having posted a daily high at 121.09 and low at 120.77. US: Don’t Entirely Dismiss t

Currently, EUR/JPY is trading at 120.86, down -0.09% on the day, having posted a daily high at 121.09 and low at 120.77.US: Don’t Entirely Dismiss the Weakness in Q1 GDP - NomuraEUR/JPY has been inching to the downside and testing the bull's commitments at the 120.80 level in early Asia. In Tokyo, the mood is equally subdued. The main event for the euro crosses was, of course, the ECB, and while the ECB stuck to their guns, many were disappointed that they did not comment on monetary policy in respect to a possible exit from its ultra-loose monetary policy. Meanwhile, the BoJ was more optimistic in its growth forecast but less so on inflationary pressures and markets are now back to US fundamentals and awaiting tomorrow's GDP outcome for first estimates of the performance in Q1.EUR/JPY levelsAnalysts at Commerzbank explained that so far EUR/JPY shot up to its current April high at 121.90, close to the five-month resistance line at 122.25 which represents our next upside target. "While no rise above the next higher March peak at 122.88 is seen the gap with last week’s high from 119.00 to 117.81 is still to be at least partially closed. Medium term the cross should still target the 112.62 October 2016 low and the 112.53 2012-2017 support line, which we look to hold and provoke reversal longer term, provided that no weekly close above the December high at 124.08 is made."

Japan’s core consumer price index (CPI) rose for the third straight month in March, following 12 months of contraction, although the uptick was slight

Japan’s core consumer price index (CPI) rose for the third straight month in March, following 12 months of contraction, although the uptick was slightly less than expected. The core CPI, which excludes the cost of fresh food, rose 0.2% y/y in March as opposed to the expected figure of 0.3%. February print was 0.2%. Core CPI, which excludes both food and energy dropped 0.1%, compared to 0.1% growth seen in February. The fact that the core CPI stalled in March adds credence to the peak inflation argument and BOJ’s downward revision of the FY 2017/18 core CPI forecasts.Spending continues to fallHousehold spending contracted 1.3% y/y in March, which was a slight improvement following February’ 3.8% fall. The markets were expecting a drop of just 0.3% in March. Meanwhile, job-to-applicant ration inched higher to 1.45; the highest level since 1974.

Japan Large Retailer's Sales climbed from previous -2.7% to -0.8% in March

Japan Retail Trade s.a (MoM) remains unchanged at 0.2% in March

Japan Industrial Production (YoY) fell from previous 4.7% to 3.3% in March

Japan Overall Household Spending (YoY) came in at -1.3% below forecasts (-0.3%) in March

Japan Industrial Production (MoM) registered at -2.1%, below expectations (-0.8%) in March

Japan Retail Trade (YoY) registered at 2.1% above expectations (1.5%) in March

Currently, AUD/USD is trading at 0.7465, up 0.01% on the day, having posted a daily high at 0.7473 and low at 0.7462. Forex today: trading political

Currently, AUD/USD is trading at 0.7465, up 0.01% on the day, having posted a daily high at 0.7473 and low at 0.7462.Forex today: trading political and Central Bank ricochets, awaiting US GDPAUD/USD is currently sidelined in early Asia while markets await the next catalyst in US GDP tonight. The Aussie was -0.03% down at 0.7472 within a range of 0.7440-0.7492 during the US session and it doesn't look anymore lively for today. The US data came with durable goods orders that rose 0.7% in March (vs 1.3% expected), with ex-transport orders falling 0.2% - the first decline since June 2016. Wholesale inventories fell 0.1% (vs +0.2% expected). Analysts at Westpac explained that the earlier break below the 0.7500-0.7600 range has been sustained, and targets the 0.7400 area; "The US Administration’s trade protectionist policies are weighing."AUD/USD 1-3 month: The same analysts at Westpac noted that the modestly weaker than expected Australian CPI outcome has added yet another factor capping the AUD/USD and softer commodity prices; "a more protectionist stance from US President Trump, and higher US yields if the Fed raises rates in June as we expect. These leave the AUD/USD with strong resistance at 0.76. We expect to see it heading towards 0.74 by year end, (26 Apr)."AUD/USD levelsValeria Bednarik, chief analyst at FXStreet explained that the technical indicators have barely bounced from oversold readings, " Additional declines will likely depend on of Asian markets' behaviour and the above mentioned macroeconomic releases. Should the pair challenge the mentioned daily low, the main bearish target comes at 0.7250 a mid-term strong static support."

Japan National CPI Ex-Fresh Food (YoY) below expectations (0.3%) in March: Actual (0.2%)

Japan Tokyo CPI ex Fresh Food (YoY) came in at -0.1%, above expectations (-0.2%) in April

Japan Tokyo CPI ex Food, Energy (YoY) up to -0.1% in April from previous -0.2%

Japan Tokyo Consumer Price Index (YoY): -0.1% (April) vs -0.4%

Japan Unemployment Rate registered at 2.8%, below expectations (2.9%) in March

Japan Jobs/applicants ratio registered at 1.45 above expectations (1.43) in March

Japan National Consumer Price Index (YoY) dipped from previous 0.3% to 0.2% in March

Japan Tokyo CPI ex Food, Energy (YoY) climbed from previous -0.2% to 0.1% in April

Japan National CPI Ex Food, Energy (YoY) declined to -0.1% in March from previous 0.1%

Japan Tokyo CPI ex Fresh Food (YoY) above forecasts (-0.2%) in April: Actual (0.1%)

Currently, NZD/USD is trading at 0.6881, up 0.07% on the day, having posted a daily high at 0.6885 and low at 0.6872.  New Zealand Trade Balance (YoY

Currently, NZD/USD is trading at 0.6881, up 0.07% on the day, having posted a daily high at 0.6885 and low at 0.6872. New Zealand Trade Balance (YoY) rose from previous $-3.79B to $-3.67B in MarchNZD/USD is slightly bid in a quiet session so far in early Asia with the release of the trade balance. Meanwhile, from the US session, the bird was down by -0.1% within a range of 0.6848-0.6921 at 0.6883 up to the close. The US data was mixed with durable goods orders that rose 0.7% in March (vs 1.3% expected), with ex-transport orders falling 0.2% - the first decline since June 2016. Wholesale inventories fell 0.1% (vs +0.2% expected). Analysts at Westpac noted that the kiwi was breaking lower and targeting the 0.6800 area next. The US Administration’s trade protectionist policies are weighing.NZD/USD 1-3 month: The analysts at Westpac expect that the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down towards 0.6900. "The RBNZ’s persistent reminders it is on hold for a long time should also weigh."NZD/USD levelsNZD/USD has broken the critical support level at 0.6933/50 and has challenged the support of the 0.6885 mark down to 0.6841 as being the recent previous low as of the European session. Next support is down to 0.6675 as the 29th May 2016 high on a break of the 0.67 handle. On the flip side, a run back on t the 0.70 handle, the previous bulls have the 17th April highs of 0.7035 is sight protecting 0.7060/70 and recent high today around the 200-d ema (0.7067). There is a double bottom at 0.7130 as the mid-Feb lows.

South Korea Industrial Output (YoY) declined to 3% in March from previous 6.6%

United Kingdom Gfk Consumer Confidence meets forecasts (-7) in April

South Korea Industrial Output Growth increased to 1% in March from previous -3.4%

South Korea Service Sector Output climbed from previous 0.1% to 0.4% in March

New Zealand Trade Balance (YoY) rose from previous $-3.79B to $-3.67B in March

New Zealand Trade Balance (MoM): $332M (March) vs $-18M

New Zealand Building Permits s.a. (MoM) declined to -1.8% in March from previous 14%

New Zealand Exports: $4.65B (March) vs $4.01B

New Zealand Imports up to $4.31B in March from previous $4.02B

Analysts at Scotiabank noted that the BoJ made no policy changes and no material adjustments to its growth and CPI forecasts.  Key Quotes: "Relative

Analysts at Scotiabank noted that the BoJ made no policy changes and no material adjustments to its growth and CPI forecasts. Key Quotes:"Relative central bank policy remains bearish for JPY, with downside risk on the back of a renewed widening in interest rate differentials.' "Measures of implied JPY volatility are softening, and risk reversals hint to an erosion in the premium for protection against JPY strength. We remain bearish JPY." "We look to gains through the 50 day MA and this week’s high in the 111.80 area, toward 112.50. Near-term support is expected at 111." 

Analysts at Nomura explained that there were developments on the US politics front this week. Key Quotes: "The Trump administration stepped up its r

Analysts at Nomura explained that there were developments on the US politics front this week.Key Quotes:"The Trump administration stepped up its rhetoric on tax reform, presenting a modest set of guidelines for tax reform yesterday, which were scant on details.  The key elements included a reduction in the top corporate tax rate from 35% to 15%, a shift to a territorial system for corporate taxes, a temporary tax reduction for the repatriation of profits earned abroad, a reduction in the number of personal tax brackets and a decline in the top rate to 35%. That said, the details provided were insufficient to assess the budgetary impact.  According to our US economists, the announcements do not change their expectations that only modest tax cuts with little reform will end up being passed by Congress."

Analysts at UOB noted that the Trump administration outlined its long-awaited tax plan on Wednesday – slashing the federal income tax rate to 15% for

Analysts at UOB noted that the Trump administration outlined its long-awaited tax plan on Wednesday – slashing the federal income tax rate to 15% for corporations from the current rate of 35%. Key Quotes:"It also levies a one-time tax on an estimated $2.6 trillion in profits that U.S. multinationals have stashed away overseas. The plan would also adopt a territorial tax system, which means most profits earned overseas would not be subject to U.S. taxes. Trump’s plan also seeks to streamline the nation’s inefficient tax system, including cutting the number of income tax brackets from seven to three. It would also eliminate tax deductions with few exceptions. Overall, the plan offered too few details to immediately assess its economic impact. Trump’s goal of reforming the nation’s tax code is expected to face fierce resistance among congressional Democrats and even members of his own Republican Party, who are divided about whether the plan should be “revenue neutral”. The one-page summary of the tax plan said the Trump administration will hold listening sessions with stakeholders and continue working with both houses of Congress during the month of May."

Analysts at Westpac offered their outlook for today's event risks. Key Quotes: "Event Risk Australia: Mar private sector credit is forecasted to be

Analysts at Westpac offered their outlook for today's event risks.Key Quotes:"Event Risk Australia: Mar private sector credit is forecasted to be 0.4% following a softer start to 2017 due to the volatile business segment. Housing is expected to be similar to Feb’s 0.57% ahead of the impact from regulation. Q1 PPI is forecasted to be 0.5% with a stronger AUD offsetting rising energy costs. Japan: Mar CPI is out. Inflation has recovered of late to 0.3%yr in Feb with core a touch softer at 0.2%yr. Euro Area: Apr CPI (advance) follows a pullback in Mar with headline inflation falling to 1.5%yr from 2.0%yr. Core CPI fell, but to a lesser degree, moving to 0.7%yr from 0.9%yr. US: Q1 GDP is forecasted to be 1.6% annualised vs market expectations of 1.0%. A softer consumer and still subdued business investment are the key themes with partials indicating a weaker quarter, while inventories should also subtract. Note that Nowcasts point to risks being greater than normal. Fedspeak includes Brainard on Fintech and Harker on STEM education."

Analysts at Nomura explained that with spending data pointing to decelerating economic growth, we expect the Bureau of Economic Analysis (BEA) to repo

Analysts at Nomura explained that with spending data pointing to decelerating economic growth, we expect the Bureau of Economic Analysis (BEA) to report that Q1 GDP growth slowed to 0.2% q-o-q saar (Consensus: 1.0%) from 2.1% in Q4.Key Quotes:"Based on data that came out this week, our Q1 estimate was lowered by 0.8pp from our previous forecast of 1.0%. Although several special factors cloud the Q1 picture and increase the uncertainty surrounding our Q1 forecast the weakness cannot be entirely dismissed. Growth in spending over the past few months was sluggish, and our Q1 GDP tracking estimate has been hovering below 1.0% q-o-q saar since the end of March. Similarly, the Atlanta Fed’s GDPNow tracking estimate has been below 1.0% since 5 April. Today’s trade and inventory data from the March Advance Economic Indicators Report by the Census Bureau, on balance, lowered our tracking estimate. The advance estimates of both retail and wholesale inventories for March were weaker than expected. Plus, February wholesale inventories were lowered. These readings imply weaker than expected inventory accumulation in Q1. Previously, we had expected some pick-up in inventory buildup in March as a result of weakness in final sales, but that was not the case.  The advance estimate of March goods trade deficit was slightly narrower than we anticipated, but this was not enough to offset the drag from inventories. Additionally, incoming information suggests that the BEA will not incorporate annual revisions to retail sales into the advance estimate of Q1 GDP. After annual revisions to retail sales lowered core retail sales in Q1, we revised down our tracking estimate to 0.8% from 1.0% on Wednesday. The reversal of the impact of these revisions on our Q1 GDP tracking model was positive to our tracking estimate. Combining these developments this week, we lowered our Q1 GDP tracking estimate by 0.6pp to 0.2% q-o-q saar from 0.8%."

Analysts at Westpac explained today that the ECB remained on hold and retained its easing bias, disappointing those expecting hints that a QE tapering

Analysts at Westpac explained today that the ECB remained on hold and retained its easing bias, disappointing those expecting hints that a QE tapering signal may be in the pipeline. "Market WrapGlobal market sentiment: The ECB remained on hold and retained its easing bias, disappointing those expecting hints that a QE tapering signal may be in the pipeline. German interest rates fell in response, and US rates fell in sympathy.   Interest rates: US 10yr treasury yields fell from 2.32% to 2.28% following the ECB, while 2yr yields fell from 1.28% to 1.25%. Fed fund futures yields slipped, now pricing a June rate hike as a 75% chance (from 80% yesterday). Currencies: The US dollar index initially rose and fell for little net change. EUR fell from 1.0920 to 1.0853 and then recovered to 1.0880. USD/JPY eked a sideways range of 111.05-111.57. Commodity currencies were again under pressure, coinciding with the Trump Administration’s latest attack on imports – aluminium. AUD made a fresh four-month low of 0.7440 before rebounding to 0.7470 in NY. NZD similarly fell to 0.6848 – an 11-month low – before recovering to 0.6880. AUD/NZD rose from 1.0820 to 1.0876.Economic WrapThe ECB left its policy rates unchanged, maintained its QE schedule at EUR 60bn per month for the remainder of the year, and retained its implicit easing bias. Draghi did not give any hints a QE tapering signal may be forthcoming at the June meeting, saying said there had been no discussion of exit strategies. German HICP inflation jumped from 1.5% to 2.0% in April, mainly due to Easter effects. Some payback in May is likely, but combined with other survey measures of inflation pressures suggests a rising trend. US durable goods orders rose 0.7% in March (vs 1.3% expected), with ex-transport orders falling 0.2% - the first decline since June 2016. Wholesale inventories fell 0.1% (vs +0.2% expected)."

South Korea BOK Manufacturing BSI up to 79 in May from previous 78

After rising 200 pips above Friday's closing level during the first three days of the week, the EUR/USD pair is marching towards a negative daily clos

After rising 200 pips above Friday's closing level during the first three days of the week, the EUR/USD pair is marching towards a negative daily close for the second time in a row. Hurt by Draghi's comments, EUR/USD slipped to mid-1.08's on Thursday and found support there. The pair went into a consolidation phase afterward and is trading at 1.0870, down 0.3% on the day. The ECB didn't make any changes to its monetary policy. The only somewhat surprising factor was a slight change to the wording of Draghi's pre-prepared opening statement. Instead of 'moderate,' Draghi said that the recovery in the euro area was broad-based and strong.  However, he also highlighted that the Governing Council hadn't discussed a QE exit strategy and repeated that they could extend the QE beyond 2018 if it were deemed necessary. Following Draghi's statements, Euro bulls lost control of the market.Draghi does nothing and talks about It - BBHECB meeting: Superfluous - INGThe only noteworthy data for the euro tomorrow will be the retail sales change from Germany. Later in the day, the GDP growth from the U.S., which is expected to ease to 1.3% from 2.15 (YoY) for the first quarter of 2017, will be watched closely by the participants.Technical outlookThe initial support for the pair could be seen at 1.0850 (daily/yesterday's low) ahead of 1.0785 (200-DMA) and 1.0740 (Mar. 29 low).  To the upside, resistances align at 1.0900 (psychological level), 1.0950 (Apr. 27 high) and 1.10 (psychological level).