Weekly Market Analysis - 31.05.2019

CURRENCIES

The USD traded generally higher today as risk markets stabilized, partly helped by recovery in treasury yields too. Economic data from US generally matched expectations. Markets also shrugged off repeated comments from US and China regarding trade war. Though, at the time of writing, the Canadian Dollar is the strongest one, lifted by a rebound in oil price. Yen is the weakest one as stocks are recovering.

COMMODITIES

Commodities were mixed in which WTI crude futures extended on recent losses to test the USD 56.00/bbl level to the downside after having slipped around 6% from Thursday’s peak amid a bearish EIA inventory report. Gold continued on its ascent towards the USD 1300/oz level after the downward revisions to US GDP and Core PCE data, while copper was rangebound as it mirrored the indecisive tone in China. OPEC oil output in May declined 60K bpd from April to 30.17mln bpd which was the lowest since 2015, while compliance to supply cut deal was at 96% vs. Prev. 132% M/M, according to a Reuters survey.

STOCKS/EQUITIES

US stocks open generally higher, with DOW trading up 65 pts at the time of writing. 10-year yield is also up 0.037 at 2.273. We'll see if the recovery could sustain for the whole session. In Europe, FTSE is currently up 0.56%. DAX is up 0.59%. CAC is up 0.56%. German 10-year yield is up 0.014 at -0.161. Earlier in Asia, Nikkei dropped -0.29%. Hong Kong HSI dropped -0.44%. China Shanghai SSE dropped -0.31% to 2905.81, holding on to 2900 handle. Singapore Strait Times dropped -0.64%. Japan 10-year JGB yield rose 0.0114 to -0.081.

FUNDAMENTALS (DATA)

Impact on JPY Crosses:
The Tokyo Consumer Price Index released by the Statistics Bureau is a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services, excluding fresh food. The index captures inflation in Tokyo. The purchase power of JPY is dragged down by inflation. Generally, a high reading is seen as positive for the JPY.

Impact on EUR Crosses:
HICP is an index of consumer prices calculated and published by Destatis, the Statistical Office of the European Union, on the basis of a statistical methodology that has been harmonized across all EU member states. HICP is a measure of prices used by Governing Council of EU to define and assess price stability in the euro area as a whole in quantitative terms.

Impact on CAD Crosses:
The Gross Domestic Product released by Statistics Canada is a measure of the total value of all goods and services produced by Canada. The GDP is considered as a broad measure of Canadian economic activity and health. A rising trend has a positive effect on the CAD, while a falling trend is seen as negative (or bearish) for the CAD.



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