Date : 2nd May 2019.
MACRO EVENTS & NEWS OF 2nd May 2019.
FX News Today
* Asian stock markets traded mixed in quiet trade, with China and Japan still on holiday.
* The Fed held rates steady, as expected but it dealt a blow to hopes of an “insurance” rate cut, while stressing patience and data dependence for the policy outlook.
* Fed chair Powell indicated that low inflation might be transitory, and that global growth concerns had eased.
* The USA30 was down -0.61% at the end, the USA500 lost -0.75%.
* The ASX also dipped -0.74% after the nation’s biggest lender cut its dividend, but benchmarks in South Korea and Hong Kong ticked higher after reports from CNBC saying the US and China could announce a trade deal as soon as next Friday.
* Oil prices fell to USD 63.39 overnight with US stockpiles weighing.
* Gold futures rallied slightly after the FOMC announcement, as the USD fell, and yields headed lower, topping at $1,289.05 from $1,285.00. The contract later fell under $1,275.00, a one-week low.
* Sterling has outperformed for a 2nd day, floated by optimism on the Brexit front.
Charts of the Day
* GBPUSD has Support at 1.3010, and Resistance at 1.3103, the latter levels encompassing the current situation of the 50-day moving average.
* XAUUSD is trading below 1,272.00. after Fed chair Powell indicated that low inflation might be transitory, and that global growth concerns had eased. This saw the USD and Treasury yields head higher, both weighing on gold prices. Given the strong ADP number, the USD expected to remain underpinned into tomorrow’s release of the April US payrolls report.
* EURUSD fell from a high of 1.1264 to a post-Powell low of 1.1187 before settling to a narrow range around 1.1200. Support holds at 1.1160-1.1185 and REsistastance is set at 1.1210-1.1215.
Main Macro Events Today
* Interest rate Decision and Conference (GBP, GMT 11:00) – BoE should remain on hold now until the Brexit D-day. If the transition runs smoothly we might see another 25 bp hike in May 2019. The BoE has cautioned that the outlook will “depend significantly on the nature of EU withdrawal,” and noted that “uncertainty has intensified.” Thus, consensus forecasts suggest no change in the policy rate in this meeting and an unchanged 9-0 MPC voting.
* US Q1 Nonfarm Productivity (USD, GMT 12:30) – Q1 productivity should post a 1.2% rate of growth, down from 1.9%, with unit labor costs rising 2.3% from 2.0%.
Support and Resistance Levels
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Please note that times displayed based on local time zone and are from time of writing this report.
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