FX News Today
- Treasury yields dipped -1.4 bp overnight, JGB rates are down -0.5 bp as bond markets continue to rally amid the escalating US-Sino trade spat that saw Trump targeting Chinese telecom companies.
- Reports that the US President will hold off on auto tariffs for now helped European bourses to stage a late rally Wednesday.
- The US President signed an order that is expected to restrict the likes of Huawei and ZTE Corp from selling their equipment to the US. Huawei was also put on a blacklist that could forbid it from doing business with American companies and require US companies to obtain a special licence to sell products to the company, which if enforced strictly could halt even everyday operations at the Chinese company.
- The US and European stock futures are under pressure ahead of the official open.
- US-Sino trade tensions aside Brexit developments and Italian budget jitters remain in focus amid a pretty quiet local calendar that focuses on Eurozone trade numbers as well as the final reading of Italian HICP inflation.
- The unexpected pick up in Australian unemployment fuelled speculation of a rate cut from the RBA.
- The front end WTI future is trading at $62.40 per barrel.
Charts of the Day
- EURUSD found Resistance at 1.1217 level for 2 consecutive days. The pair has mostly been stuck between its 20-day moving average at 1.1200 and its 50-day moving average at 1.1245 since the start of the week. A close above or below these levels may help determine direction for the remainder of the week.
- GBPUSD has extended losses which s now in its 9th consecutive down day, after it broke yesterday April’s lows. Next support for the asset is coming at January’s low Resistance at 1.2772.
Main Macro Events Today
- Housing Data (USD, GMT 12:30) – Both Building Permits and Housing Starts should jump in April, to a 1.215 mln pace and to 1.298 mln respectively, after a 0.3% and 0.2% decline seen in March. Overall, a stronger trajectory is expected for starts with a positive but slower pace for permits.
Support and Resistance levels
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