Market Review - Fundamental Perspective - 02 May 2018

The dollar consolidated at a four-month high overnight, re-coupling with rising US Treasury yields, as investors digested the latest earnings reports and many markets reopened after holidays. 10-year Treasury yields pushed higher, though remained below 3 percent, while safe-haven assets such as the yen and gold advanced
U.S. equity futures edged lower after a report suggested the possibility of a subpoena has been raised for President Donald Trump in an ongoing special-counsel investigation (Bloomberg)
EURUSD broke below the 200 day moving average (1.2016) and psychological 1.2000 level before rallying back towards 1.2030 in early London trading
Sterling continues to trade with an offered tone this morning, further to a weak UK Manufacturing PMI print yesterday which cast additional doubt on the strength of the UK economy, printing 53.9 vs. 54.8 expected (the lowest reading since November 2016), and further reducing expectations for the BoE to hike rates at its May 10th meeting
Political risks appear to be back on the market’s radar, as reports this morning of PM May facing confrontation over an EU “customs partnership” further weigh on the pound, one day ahead of local elections
GBPUSD support comes at 1.3580 ahead of 1.3550-1.3535 (previous highs and 200 dma) and 1.3450 YTD low area. Resistance comes in at 1.3630 ahead of 1.3730

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