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Forex News Timeline

Thursday, May 24, 2018

The multiple long-tailed daily doji candles and a strong bullish price relative strength index (RSI) divergence in the 4-hour chart indicates scope fo

Gold (XAU/USD) looks set for a corrective rally to $1,302, the technical charts indicate.Dovish Fed fails to put a bid under the yellow metal.The multiple long-tailed daily doji candles and a strong bullish price relative strength index (RSI) divergence in the 4-hour chart indicates scope for a corrective rally in gold (XAU/USD) to $1,302 levels. However, the yellow metal continues to have a tough time scaling the resistance offered by the descending (bearish) 50-candle moving average (MA) in the 4-hour chart, currently seen at $1,295.Gold fails to cheer dovish FedThe Fed minutes released yesterday used the word “symmetric” nine times in reference to inflation, indicating the policymakers would allow inflation to run above the 2 percent target for some time. Further, the minutes warned about the negative impact of Trump administration's get-tough trade policy. The dollar index (DXY) retreated from 94.19 to 93.86 in response to dovish Fed minutes. Meanwhile, the 10-year treasury yield fell below 3 percent. Still, the metal failed to catch a bid, which is usually the case when the bearish sentiment is strong.Gold Technical LevelsAs of writing, gold is trading at $1,295/Oz. The resistance is seen at$1,297 (10-day MA), $1,300 (psychological hurdle), and $1,307 (200-day MA). Meanwhile, support is lined up at $1,293 (5-day MA), $1,287 (previous day's low), and $1,282 (May 21 low).  

The US President Trump, in his latest tweet, announced his interview on Fox TV at 0600 AM NY Time (1000 GMT) later on Thursday.

The US President Trump, in his latest tweet, announced his interview on Fox TV at 0600 AM NY Time (1000 GMT) later on Thursday.

Japanese Chief Cabinet Secretary Suga is on the wires now, via Reuters, responding to the US President Trump’s fresh plans to slap tariffs on US auto

Japanese Chief Cabinet Secretary Suga is on the wires now, via Reuters, responding to the US President Trump’s fresh plans to slap tariffs on US auto imports. Suga noted that Japan is closely monitoring the situation over the US moves on imports while adding that any trade steps should be in accordance with the World Trade Organisation (WTO) rules.  Also Read: Trump's new US auto tariff proposal to weigh on risk

The Wall Street Journal (WSJ) reports comments from Choe Son Hui, North Korea’s Vice Minister of Foreign Affairs, with further insights on the earlier

The Wall Street Journal (WSJ) reports comments from Choe Son Hui, North Korea’s Vice Minister of Foreign Affairs, with further insights on the earlier headlines that cited ‘North Korean official to suggest reconsidering US summit meeting - Korea press’.Key Details:North Korea senior envoy (Choe Son Hui, the North's vice minister of foreign affairs) renewed a threat to call off a planned summit with President Donald Trump Warned that Pyongyang could "make the U.S. taste an appalling tragedy it has neither experienced nor even imagined." Ms. Choe's statement, issued through official state media, called out Vice President Mike Pence, who she referred to as "a political dummy."

Crude is retreating slightly, and WTI is backing into 71.50 as supply increases threaten oil's recent run-up on the charts. With oil supplies expecte

Oil falls back as OPEC ponders ramping up production.Oversupply in the US continues to blow out expectations of crude stock contractions.Crude is retreating slightly, and WTI is backing into 71.50 as supply increases threaten oil's recent run-up on the charts. With oil supplies expected to contract from Venezuela and Iran, the former struggling to produce crude in the midst of a tumultuous crisis, and the latter looking down the barrel at stiff sanctions from the US. With oil expected to be constrained from the two critical oil-producers, the OPEC is considering ramping up production in response, and the concept of OPEC upping their output is clamping down on oil prices. On the US side, weekly crude stocks rose unexpectedly, with commercial inventories rising by 5.8 million barrels, going in the complete opposite direction of the forecast 1.6 million barrel contraction expected by analysts.WTI levels to watchWTI crude prices have eased back from the 73.00 major level, and that will become the bull's next challenge, but if a slide were to begin to form, supports sit at May's low near 66.80 and the last swing low of 61.80, while the next resistance point beyond 73.00 could begin to form up near the 161.8 Fibonacci expansion level near 75.70.

The USD/JPY pair closed yesterday below the 200-day moving average (MA) and the accelerated trendline (sloping upwards from March 26 low), opening doo

USD/JPY closed yesterday below the 200-day MA and ascending trendline.The bearish move seems to have boosted demand for JPY calls, the risk reversals show.The USD/JPY pair closed yesterday below the 200-day moving average (MA) and the accelerated trendline (sloping upwards from March 26 low), opening doors for a deeper pullback towards the key support at 108.64. Consequently, the demand for the JPY calls (bullish bets) increased, pushing the USD/JPY one month 25 delta risk reversals (JPY1MRR) to -1.27 - the lowest level since March 27. A week ago risk reversals stood at -0.65. The drop from -0.65 to -1.27 represents a rise in the implied volatility premium for the JPY calls (or demand for JPY calls has been rising), meaning the investors are hedging against a deeper pullback in the USD/JPY pair.JPY1MRR

Bank of Japan (BOJ) board member Sakurai said on Thursday expressed confidence the stimulative effect of yield curve control policy will boost inflati

Bank of Japan (BOJ) board member Sakurai said on Thursday expressed confidence the stimulative effect of yield curve control policy will boost inflation expectations and stressed the BOJ needs to hit the price goal at the earliest date possible. Key quotes (Source: Reuters)BOJ board member Sakurai says monetary policy must seek to maintain as long as possible current tightened supply-demand conditions Boj must aim to hit price goal at earliest date possible but that doesn't mean it will do so recklessly The stimulative effect of the yield curve control will heighten as inflation expectations, economy's long-term growth strengthen Boj must seek most appropriate policy with no preset idea with an eye on the balance of economy's demand, supply Undesirable for a specific timeframe, indicator to come under too much focus as monetary policy must take into account various uncertainties Given weak inflation, now is time to patiently maintain the easy monetary policy Leaving distortions in economy's supply-demand balance unattended for long could cause unnecessary swings in economy Boj must ensure prolonged easy policy does not destabilise financial system Financial intermediation may be affected if financial institutions' profits come under pressure from low rate environment

Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr is out with an article on the RBNZ's role in maintaining a healthy banking environment. Key qu

Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr is out with an article on the RBNZ's role in maintaining a healthy banking environment.Key quotes"A key task of the Reserve Bank is to promote a sound and efficient financial system. An important part of our financial ecosystem are New Zealand registered banks.  New Zealand’s financial ecosystem has been remarkably robust over recent decades but it is not immune to threats.  The general public hear plenty of noise from these institutions and local commentators as to whether we are doing too much, or too little, too often. The noise is confusing to the non-expert.  Our most innovative step in transparency is the pending launch of our Bank Financial Strength Dashboard on 30 May.  Our challenge is to ensure everyone gets treated fairly based on their specific activities and risk characteristics – to ensure New Zealanders continue to benefit from a global-class banking system. Recent bankers’ complaints about our activities tend to focus on three issues: NZ-specific capital, the role of attestation requirements, and the need to prove their ability to resolve a bank failure inside the legal and fiscal bounds of New Zealand. These are all part of doing business here in New Zealand."

The People's Bank of China (PBOC) set the Yuan reference rate 6.3816 vs. previous day's fix of 6.3773.

The People's Bank of China (PBOC) set the Yuan reference rate 6.3816 vs. previous day's fix of 6.3773.

The Aussie tripped lower against the US Dollar in the early Asia session for Thursday following statement by the US that they are seeking yet more tar

Aussie struggles to hold onto Wednesday's late lift as trade headlines sap risk appetite.A clear data docket for Thursday sees the AUD/USD exposed to overall market sentiment.The Aussie tripped lower against the US Dollar in the early Asia session for Thursday following statement by the US that they are seeking yet more tariffs, this time targeting foreign vehicles. The AUD/USD slipped to 0.7550 on the news, but the pair seems to be recovering and is trading back into 0.7565. Little is on the docket for the Aussie for Thursday, but markets are still finding some moves in Asia following tense headlines from the US. President Trump has instructed the US Department of Commerce to make a formal investigation into foreign vehicle imports, so that the US can impose hefty tariffs on foreign cars under the guise of national security. Markets knocked back briefly on the news as the early week's hopes of a cooldown in trade rhetoric begins to flub.AUD/USD levels to watchAs FXStreet's own Valeria Bednarik noted earlier, "the pair is currently below the 0.7565 Fibonacci resistance, but the risk leans to the upside, as, in the 4 hours chart, the pair held above its 100 SMA and is currently battling to overcome a bullish 20 SMA, while technical indicators stand within positive territory, the RSI actually advancing at around 53. Further recoveries above the mentioned Fibonacci resistance should see the pair extending its recovery up to the 0.7620 region, the 50% retracement of its latest weekly decline." Support levels: 0.7520 0.7470 0.7435   Resistance levels: 0.7665 0.7590 0.7620

Singapore Gross Domestic Product (QoQ) above expectations (1.4%) in 1Q: Actual (1.7%)

South Korea BoK Interest Rate Decision: 1.5% (May)

USD/JPY has dropped on headlines that the Trump administration will consider 232 probe of auto imports. Elsewhere, we hear that China will enjoy more

USD/JPY: loses out to risk turning sour, drops below the 100 handle and the lowest level since European trade.USD/JPY: mixed headlines leave uncertainties dominant and risk offeredUSD/JPY has dropped on headlines that the Trump administration will consider 232 probe of auto imports. Elsewhere, we hear that China will enjoy more US farm products and that the N.Korean summit has gained some traction again, (RTRS reporting):  N Korea foreign ministry official says will suggest to N Korea leadership to reconsider US / NK summit - KCNA N Korea says future of N Korea-US summit is entirely up to Washington - KCNA  In any case, the equities are taking a hit in Tokyo and yen picks up a bed. As for price action overnight. Bargain hunters picked up USD/JPY back to 110.10/36 from 109.59 in Europe. The fairly dovish FOMC minutes anchored the pair here and bears pilled in at 110.05 down to a NY session low of 109.93 before Asia took over and USD/JPY trades 109.65 the session low so far. USD/JPY levelsValeria Bednarik, chief analyst at FXStreet explained that the pair is now trading at around 110.20, recovering above the daily ascendant trend line and the 100 SMA in the 4 hours chart, both pierced early Europe: "Technical indicators in the mentioned chart have managed to bounce from overbought levels, but are rather reflecting the ongoing correction than suggesting more gains ahead. Nevertheless, if the pair manages to extend its recovery beyond 110.45, May 15th high, chances are of further recoveries ahead for the upcoming sessions." 109.40/50 guards a run towards and a break below the 108.50 level; This will open risk towards the 50-D SMA before the 2018 low at 104.63 as a key support.

As reported by Reuters, the United States military has 'disinvited' China from major naval drills following accusations from the US that Beijing is mi

As reported by Reuters, the United States military has 'disinvited' China from major naval drills following accusations from the US that Beijing is militarizing islands in the South China Sea. China responded by calling the decision "unconstructive". “As an initial response to China’s continued militarization of the South China Sea we have disinvited the PLA Navy from the 2018 Rim of the Pacific (RIMPAC) Exercise,” said Lieutenant Colonel Christopher Logan, a Pentagon spokesman. Logan did not specify what else the U.S. government might do to respond but stressed there was “strong evidence” that China had deployed anti-ship missiles, surface-to-air missile systems and electronic jammers to contested features in the Spratly Islands. “We find that a very unconstructive move,” China’s top diplomat, Wang Yi, told reporters in Washington after meeting with U.S. Secretary of State Mike Pompeo.  - Reuters Tensions are already on the rise once again between the US and China as US President Trump poured water on hopes that things were cooling down this week. Trump has noted his dissatisfaction with current trade negotiations.

The Aussie is tripping lower once again in Asia trading against the Yen, slipping into 82.85 as of writing as risk-off spikes the early Thursday sessi

Risk aversion sends traders back into safe havens as US considers yet more tariffs.Japanese foreign investment numbers deliver little action.The Aussie is tripping lower once again in Asia trading against the Yen, slipping into 82.85 as of writing as risk-off spikes the early Thursday session. US President Trump confirmed he is instructing the US Department of Commerce to make a formal investigation of whether imported vehicles falls under Section 232, allowing the United States to impose a 25% tariff on imported vehicles. Markets have recoiled from the news, sending traders into the safe haven Yen on reaction. Japan saw Foreign Investment figures early in the day, and the figures came in mixed, with foreign investment in Japanese stocks contracting from a revised ¥126.5 billion to ¥99.1 billion to May 18th, while foreign investment in Japanese bonds lifted to ¥948.9 billion from a revised ¥835.3 billion.AUD/JPY levels to watchThe pair has slipped further down after making a new high near 84.50, and the Aussie is trudging lower amid floundering risk sentiment and is approaching support from the 50-day EMA at 82.80. Bullish traders may be looking for a jumping-in point as the pair approaches the 50.0 Fibo retracement level near the same value, though with confidence continuing to falter in the AUD a further drop into the last swing low at 81.10 could be on the cards.

Analysts at Nomura offered their model's projection for today's fix in USD/CNY. Key quotes: "Our model1 projects the fix to be 28 pips lower than th

Analysts at Nomura offered their model's projection for today's fix in USD/CNY.Key quotes:"Our model1 projects the fix to be 28 pips lower than the previous fix (6.3745 from 6.3773) and 107 pips lower than the previous official spot USD/CNY close of 6.3852. The basket implied change is 131 pips lower than the previous official spot USD/CNY close (6.3721 from 6.3852)."

Forex markets today started out on the backfoot, with the yen starting and ending as the top performer in the G10's, (TRY stood out in the EM's, highe

Forex markets today started out on the backfoot, with the yen starting and ending as the top performer in the G10's, (TRY stood out in the EM's, higher vs the dollar by +387), the euro dragged its heels after correcting from YTD low down at 1.1675. The NY session started out as a bit of a bloodbath in Europe, with EZ PMIs falling short of what could be considered by markets as a catalyst for the ECB to get a move on, while UK CPI also missed expectations, pushing prospects of a BoE hike further over the horizon. This all came against a backdrop of political uncertainty as the Italian coalition parties sought to agree on a prime minister - however, behind those scenes, Trump's dissatisfaction with how trade talks with China have been going pins markets down as well.  Trade was tight ahead of the release of the FOMC minutes, with majors vs the greenback, such as the euro and pound, consolidating in close distances from fresh YTD lows. At first take, there did not seem to be any significant shifts from already divulged outlook from the FOMC, but at closer inspection, there was a dovish tilt, as analysts at Westpac pointed out: "In the FOMC minutes, a few lines stood out: (1) A strong hint re the 13 June meeting, "it would likely soon be appropriate for the Committee to take another step in removing policy accommodation"; (2) There seems to be a lack of urgency to tighten more aggressively given that “modestly above 2 percent would be consistent with the committee’s symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations,” and "many" saw only "muted" wage pressure; while a "few" noted neutral will be in sight...before too long," which would require rewording the existing guidance that policy is accommodative." On the back of this, risk bounced late in the day and recoveries were underway vs the greenback and the benchmark indexes rallied. the DXY bled within the 93.5140-94.1880 range. As far as yields go, the US 10yr treasury yield dropped from 3.05% to 2.99% and 2yr yields fell from 2.59% to 2.53% after the FOMC minutes, (2yr's are usually sensitive to FOMC minutes).  All in all, a June hike still seems to be on the cards and September is an additional possibility.Currency summary:Euro was all one-way traffic until the moments before the FOMC minutes. EUR/USD recovered from the YTD lows at 1.1675 after opening NY around 1.1715. the slide was extending throughout the US morning until a 1.1709 bounce on the minutes and extending to meeting the opening level.  GBP/USD made a fresh low as well to 1.3347 due to the softer than expected UK CPI print that arrived as 2.4% vs 2.5% forecasted. For NY, the pair recovered to 1.3359. for the cross, EUR/GBP ended NY 0.8765, -0.14% and within the 0.8753/88 range. The yen was taking on Sydney bears with a test down at 109.56 vs the dollar before bargain hunters picked up USD/JPY back to 110.10/36. The fairly dovish minutes anchored the pair here and bears pilled in at 110.05 down to a NY session low of 109.93.  The Aussie dropped 0.7580 to 0.7523 in London trade ahead of the FOMC minutes where commodities and higher beta were somewhat relieved of pressures. AUD/USD got off from 0.7535 to 0.7565 the high and closing near there into Asia. Key notes from US session:Wall Street stocks break higher on lukewarm FOMC’s minutes and easing geopolitical pictureFunda-FX wrap: never mind the FOMC minutes, UK/EZ data and Trump caused the volatility

According to statements from KCNA, North Korea's state-run news agency, A North Korean foreign ministry official will be formally suggesting to the No

According to statements from KCNA, North Korea's state-run news agency, A North Korean foreign ministry official will be formally suggesting to the North Korean leadership to reconsider the North Korea-US summit coming up. North Korea went on to state that they condemn US Vice President Pence's remarks that North Korea may "end up like Libya". Currently, North Korea has taken the stance that the future of the upcoming summit is entirely up to Washington D.C. Trump has been adamant that he will be seeking denuclearization from North Korea's Kim Jong Un, and Kim Jong Un has stated recently that denuclearization is not on the table for the summit meeting.

Singapore Gross Domestic Product (YoY) above forecasts (4.3%) in 1Q: Actual (4.4%)

Japan Foreign investment in Japan stocks down to ¥99.1B in May 18 from previous ¥126.3B

Japan Foreign bond investment up to ¥948.9B in May 18 from previous ¥827B

Australia's Reserve Bank of Australia head, Philip Lowe, spoke on Wednesday about the hazards posed to Australia from China due to the interconnected

Australia's Reserve Bank of Australia head, Philip Lowe, spoke on Wednesday about the hazards posed to Australia from China due to the interconnected nature of their economies, as noted by the Australian Financial Review. Lowe has appealed for calm over Australia's increasingly troubled political relationship with China. Warning that its ballooning debt mountain and opaque financial system pose a threat to prosperity here. Lowe said it was important to build understanding, connections and multiple lines of communication.  - The Australian Financial Review. Some prickly language between Australia and China has developed some strains lately, after China's Foreign Minister Wang Yi stated that Australia must take a "more proactive approach" to China relations if they want to get bilateral trade back on track.

The WSJ has run an article in recent trade which could be a weight on market sentiment as trade war risk comes back to the fore. "The Trump administ

The WSJ has run an article in recent trade which could be a weight on market sentiment as trade war risk comes back to the fore. "The Trump administration is looking into using national-security laws to impose new tariffs on vehicle imports, according to administration officials and industry executives briefed on the plan. President Donald Trump has asked his team to investigate using a legal provision known as “Section 232” of the 1962 Trade Expansion Act to find whether tariffs or other restrictions are needed on imported cars. It is the same legal justification the administration used to impose tariffs on steel and aluminum imports in March," - the WSJ wrote. Previously, Trump's administration had also imposed hefty import tariffs on steel and aluminum under Section 232 of the 1962 U.S Trade Expansion Act, which allows safeguards based on “national security.”      

Analysts at Nomura noted that in the May FOMC minutes the Committee indicated that they expect to raise rates again at next month’s meeting. Key Quot

Analysts at Nomura noted that in the May FOMC minutes the Committee indicated that they expect to raise rates again at next month’s meeting.Key Quotes:"However, in our opinion, the minutes did not send a clear signal regarding what the Committee expects to do in the second-half of the year." "The Committee highlighted a number of risks to the outlook. Moreover, they continued to express some uncertainty about the resilience of inflation and inflation expectations." "It appears that the Committee remains divided on whether one or two additional interest rate increases will be needed in the second-half of this year."

NZD/USD is consolidating the bid and strong recovery attempt of the recent slide from 0.6970's after the FOMC minutes left some room for inflation to

FOMC minutes, a few lines stood out and can be taken dovishly.NZD/USD: consolidating the bid and strong recovery attempt, trade was a bigger surplus.NZD/USD is consolidating the bid and strong recovery attempt of the recent slide from 0.6970's after the FOMC minutes left some room for inflation to run higher before the Fed would become more aggressive than what markets have already priced in, (two further hikes for 2018). Currently, NZD/USD is trading at 0.6929 with a high of 0.6933 in early Asia and a low of 0.6923, (overnight low was 0.6887). Analysts at ANZ noted that the risk-off sentiment was the dominant theme, although said that the majority of the NZD’s move lower occurred during the Asian time-zone. "In fact, Kiwi has had a late bounce on some perceived dovish comments in the FOMC minutes. We suspect today will be another range-bound day, but with NZD maintaining a downside bias overall." Analysts at Westpac pointed out from the FOMC minutes, a few lines stood out:  "(1) A strong hint re the 13 June meeting, "it would likely soon be appropriate for the Committee to take another step in removing policy accommodation"; (2) There seems to be a lack of urgency to tighten more aggressively given that “modestly above 2 percent would be consistent with the committee’s symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations,” and "many" saw only "muted" wage pressure; while a "few" noted neutral will be in sight...before too long," which would require rewording the existing guidance that policy is accommodative."NZ data:New Zealand releases April trade data showed that there was a bigger surplus although the March deficit was larger than originally reported: The trade balance for April surplus of 263m.
expected surplus 198m, previous was a deficit of 156m and was revised from a 86m deficit.NZD/USD levels Support comes in at 0.6920, 10-D SMA and 0.6850 below there. To the upside, 0.6950 and 0.6980 mark key levels of interest, (21-D SMA 0.6986). The next upside key target beyond there is located at  0.7080. The NZD/USD has taken out the 200-month moving average resistance at 0.6980. However, weekly technicals remain bearish and RSIs are biased to the downside. Below 0.6850, 0.6780 comes as next downside target meeting the lows of mid-Nov 2017.

The Turkish Lira has bounced from central bank intervention after a scorching run down the charts, and the USD/TRY is back into 4.5685. The Lira tumb

Turkish Lira halts free-fall as central bank steps in to halt decline.Turkish president Erdogan is threatening to take greater control of monetary policy post-election.The Turkish Lira has bounced from central bank intervention after a scorching run down the charts, and the USD/TRY is back into 4.5685. The Lira tumbled 5.7% on Wednesday in the lead-up to intervention by the Turkish central bank, and the USD/TRY pair peaked at an all-time high of 4.9262 before the central bank boosted late cash rates by 300 basis points on Wednesday, sending the pair back beneath the 4.5700 level. The Turkish Lira has been hammered by double-digit inflation, and the Lira has been systematically grinding lower, though political instability and a lack of confidence in Turkey's President Recep Erdogan has ramped up the sell-off in recent months. The Turkish Lira, hampered by a country riddled with political strife and failed coup attempts, is rapidly approaching the 5.0000 level against the US Dollar, after starting out almost on par with the Greenback at 1.1493 in April of 2008.USD/TRY levels to watchThe central bank's indirect intervention in the TRY has knocked the inflation-fueled currency back for now, but following President Erdogan's stated intent of taking firmer control of monetary policy after he wins the next election, further weakness could challenge Turkey's control over its currency. As FXStreet's own Pablo Piovano noted just before the central bank's intervention, "on the flip side, the next support is located at 4.4920 (10-day sma) followed by 4.3227 (21-day sma) and then 4.2197 (low May 10)."

New Zealand Trade Balance (MoM) came in at $263M, above forecasts ($200M) in April

New Zealand Exports above forecasts ($4.85B) in April: Actual ($5.05B)

New Zealand Trade Balance (YoY) came in at $-3.76B, above forecasts ($-3.77B) in April

New Zealand Imports above expectations ($4.65B) in April: Actual ($4.79B)

Analysts at Westpac offered a market wrap. "In the FOMC minutes, a few lines stood out: (1) A strong hint re the 13 June meeting, "it would likely so

Analysts at Westpac offered a market wrap. "In the FOMC minutes, a few lines stood out: (1) A strong hint re the 13 June meeting, "it would likely soon be appropriate for the Committee to take another step in removing policy accommodation"; (2) There seems to be a lack of urgency to tighten more aggressively given that “modestly above 2 percent would be consistent with the committee’s symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations,” and "many" saw only "muted" wage pressure; while a "few" noted neutral will be in sight...before too long," which would require rewording the existing guidance that policy is accommodative." "The US 10yr treasury yield fell from 3.05% to 2.99% - mostly pre-FOMC minutes - and 2yr yields fell from 2.59% to 2.53% - mostly post-minutes. Fed fund futures yields fell by between 4 and 9 basis points along the curve. A June hike is still seen as very likely (around 85% on Bloomberg calculations) and another sometime during H2 2018, but no longer much risk of 2 hikes in H2." "EUR/USD fell from 1.1760 to 1.1676 – a six-month low. The Eurozone May business surveys softened more than expected and Italian politics remains very fluid as the coalition parties try to agree on a prime minister. While the -1.3% close on Milan shares was in line with other Eurozone bourses, Italian bonds stood out, the 10 year yield rising 7 basis points on a day of lower yields globally." "AUD/USD fell from 0.7580 to 0.7523 in London before retracing to 0.7560 after the FOMC minutes as US equities bounced. RBA governor Lowe’s speech on China appeared to have no FX impact, though most headlines were about his warning on China’s high debt levels. NZD fell from 0.6940 to 0.6884 before retracing to 0.6923. AUD/NZD ranged sideways between 1.0910 and 1.0945." "USD/JPY fell from 110.50 late Sydney to 109.56 before steadying around 110.10/20, the safe-haven yen outperforming, along with the Swiss franc." "GBP/USD fell 0.6% over the day to 1.3350, with some of the decline coming as UK inflation data for April showed a slightly faster path of decline in CPI than anticipated (headline 2.4% vs expected 2.5%, core 2.1% vs expected 2.2%). The main downside drivers were food and clothing, in a sign that the core retail sector remains under pressure."

Turkey's President Erdogan spoke today, explaining that Turkey's government should be run "like a company", focused on being profitable and having suc

Turkey's President Erdogan spoke today, explaining that Turkey's government should be run "like a company", focused on being profitable and having successful operations. Erdogan is looking to seize further control of monetary policy in Turkey after he wins a shoe-in re-election on June 24th, and the Turkish central bank had to raise their late cash rate by 300 basis points on Wednesday to stem the decline of the Lira against the US Dollar. Erdogan is coming under fire for sentencing over a hundred people to death for taking part in a failed coup in Turkey.

The Canadian government has blocked a takeover of Canadian construction company Aecon Group by a state-run Chinese company. The federal government co

The Canadian government has blocked a takeover of Canadian construction company Aecon Group by a state-run Chinese company. The federal government conducted a national security review of the takeover bid, and moved to block the deal on Wednesday.  

As reported by the Wall Street Journal, US President Trump and his administration are weighing possible tariffs on imported vehicles, citing national

As reported by the Wall Street Journal, US President Trump and his administration are weighing possible tariffs on imported vehicles, citing national security concerns. The Trump administration has leaned on the Section 232 provision frequently, using the national security measure to impose hefty steel and aluminum tariffs this year. Before a tariff on import cars can be enacted, a lengthy investigation by the US Department of Commerce must be completed. The Commerce Department is expected to deliver details of a plan for an investigation late Wednesday, and as the Wall Street Journal noted, "on Wednesday morning, Mr. Trump teased new steps. “There will be big news coming soon for our great American Autoworkers,” tweeted Mr. Trump. “After many decades of losing your jobs to other countries, you have waited long enough!” "  

From a fundamental perspective on FX today, the markets were waiting for the FOMC minutes to be released to confirm that a rate hike would occur again

Trade talks set off the risk-off tone, markets bounce back as Fed will let inflation run higher.ECB and BoE will need to wait for better economic performances.From a fundamental perspective on FX today, the markets were waiting for the FOMC minutes to be released to confirm that a rate hike would occur again in June and probably again in September. However, most of the FX volatility for the day had already occurred over the European PMIs and UK CPI and Trump's disappointment with how trade talks were developing with China.  EUR/GBP: soaking up the massive spot volatility after EZ PMI/UK CPI disappointmentsEZ PMIs: data arrives not as assumed; ECB to delay - NomuraFor a backdrop, on the political front, markets were also keeping an eye on Italy where an announcement was expected today as to who Italy's president, Mattarella, will appoint as premier to form a government. Italy's new Prime Minister, Guiseppe Conte: Will defend rights in European institutionsSergio Mattarella Giuseppe Conte had been summoned for consultations today to see if the law professor tapped by the eurosceptic 5-Star Movement and League as their candidate for premier has what it takes to try to form a government. At the same time, Italy’s next economy minister was the one for investors to watch as the person to steer Italy’s finances matters more for the indebted country’s future.  The markets started out on the backfoot in a risk-off environment as trade continues to dominate the headlines where Trump, in Asia, made a statement that played down expectations for a China trade deal to be hatched soon.  “Our Trade Deal with China is moving along nicely, but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion,” - Trump tweeted earlier. As far as the FOMC went, there was something for everyone. They were hawkish in the sense that all is on track for a rate hike in June and probably later in September to fulfil markets expectations of at least three hikes in 2018. However, they were dovish in the sense that they confirmed what we already knew from the statement, that the Fed will tolerate higher inflation and that gave a boost to the commodity sector and equities. Market reactionsGlobal market wrap: risk-off dominated - ANZAs far as markets are looking in early Asia, Gold is higher by $2.00 at $1,293, the benchmark US 10-year yield suffered 6bbps to the downside to 3.00%, the S&P 500 closed higher by 6.5%, WTI lost almost half a buck to $71.72, the dollar ended at the higher end of the 93.5140-94.1880 range at 93.98 and the yen stays as the best performer while the euro consolidates as the worst performer, above YTD lows scored on the EZ PMI miss down at 1.1675.  Yen outperforming in period of risk aversion - ScotiabankKey headlines, (Source: LiveSquawk):Turkish lira rallies sharply after central bank lifts rates. Italian president Mattarella asks Conte to form new govt. Fed minutes show support for June rate hike. Fed's Mester: 'marginal' difference between 2 or 3 additional hikes in 2018. ECB's Makuch: ECB can afford to wind down asset buys. ECB's Coeure: ECB to assess Italian govt plans 'as they are published. JP Morgan pushes ECB rate hike forecast to June 2019 after EZ PMI fall. US pres. Trump blasts Mexico, Canada over NAFTA talks. UK Brexit withdrawal bill to return to house of commons early-mid June. Spain's govt secures parliamentary backing for 2018 budget. US manufacturing PMI at the strongest level since Sep 2014. Eurozone consumer confidence dips slightly in May.

The three main US stock indices closed higher on Wednesday’s trading. The S&P 500 Index gained 0.32% to 2,733.29 while the Dow Jones Industrial Averag

FOMC’s minutes suggests a rate hike at the next Fed meeting but no big surprises as stock indices rise. US President Trump said that the meeting with North Korean leader Jong Un scheduled for June 12 in Singapore “could very well happen.”The three main US stock indices closed higher on Wednesday’s trading. The S&P 500 Index gained 0.32% to 2,733.29 while the Dow Jones Industrial Average rose 0.21% to 24,886.81. The Nasdaq Composite Index was up 0.64% to 7,424.96.  The main macroeconomic event was the release of the FOMC’s minutes. While the report suggested a rate hike at the next Fed meeting, stock investors were not too worried about galloping inflation and US indices rose.   Indeed, “most participants judged that if incoming information broadly confirmed their economic outlook, it would likely soon be appropriate for the FOMC to take another step in removing policy accommodation,” the minutes said. "A few participants commented that recent news on inflation, against a background of continued prospects for a solid pace of economic growth, supported the view that inflation on a 12-month basis would likely move slightly above the Committee's 2% objective for a time," according to the minutes. "It was also noted that a temporary period of inflation modestly above 2% would be consistent with the Committee's symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations at a level consistent with that objective." But the minutes also saw the many saw “little evidence of overheating of labor market with wage pressures still moderate.” Looking back, after seven years of near-zero interest rates, the FOMC started raising rates in December 2015. The current target range is at 1.5% to 1.75%. Earlier in the day, stock markets were concerned by geopolitical factors. The US President Trump said that he was not satisfied with the US-China trade talks. Additionally, he said that the meeting with the North Korean leader Jong Un scheduled for June in Singapore was likely to be canceled. However, the latest news reveals that the summit “could very well happen.” Further adding: “ if we go, I think it will be a great thing for North Korea," said Trump.Nasdaq daily chart