The latest news from Japan showed Household Spending surprisingly weakened 1.3 percent. Meanwhile, Australia’s Priv ate Capital Expenditure sunk faster than expected (-4.4 percent), and the previous reading revised higher from -2.2 percent to -1.7 percent.
In Canada, the central bank decided on Wednesday to keep its Overnight Rate unchanged at 0.75 percent. Current Account and RMPI, particularly the latter, came in better than forecast (-CAD17.5 billion and 3.8 percent, respectively). GDP slid 0.2 percent in the first quarter, compared to a 0.2 percent expectation. The previous reading for GDP was revised lower to -0.1 percent from a flat reading.
In the United States, Jobless Claims for the prior week increased to 282,000 that is 11,000 higher than its median forecast. The April Chicago PMI disappointed with a drop to 46.2, which is near the 6-year low. Meanwhile, the Prelim GDP decline in the first quarter was a tad lower than expected, -0.7 percent.
Gold followed a bearish path for the second week in a row after sellers overpowered buyers in the lower part of $1,200 in the prior week. $1,200 remains sticky and trades below this level remain attractive. We could see more of the same this week.
Oil saw more volatility after the continuous selling starting the week. A big jump pushed prices back through $60 on Friday and the week ended just above this level. The support area indeed got tested and we would now have to wait if we’ll get a follow through move through $60.
Unlike the dive of nearly 450 pips seen in the prior week, EURUSD was contented to trade in a much narrower range this week. The pair stayed close to 1.1000; this could likely get sticky this week too.
GBPUSD had another gloomier week. Unlike EURUSD, GBPUSD slid considerably for the second week, moved through 1.5400, and looks interested in attacking 1.5000 again. 1.50-1.52 would prove a critical area for both sides.
Back-to-back weekly advances pushed USDJPY through 124 this week. This is an area well past all recent resistance and is the highest reached since 2003. If this pair would retrace, we can look for support to come in around 120-122.
The Week Ahead
To start June, Monday will be more active than usual with news releases such as Japan’s Capital Spending; Australia’s Building Approvals, MI Inflation Gauge, and Company Operating Profits; China’s Manufacturing PMI and Non- Manufacturing PMI; Germany’s Prelim CPI; Spain, Italy, Switzerland, and UK Manufacturing PMI; and US ISM and Final Manufacturing PMI, and Personal Spending and Income. New Zealand will observe the Queen’s Birthday.
Tuesday will start early with New Zealand’s Overseas Trade Index; Australia’s Current Account, Cash Rate Announcement and Rate Statement; Japan’s Average Cash Earnings; UK Construction PMI and Net Lending to Individuals; Spain and Germany’s Employment Change ; Eurozone CPI Flash Estimate; and US Factory Orders.
Wednesday will stay very busy with Australia’s GDP; Spain, UK, Germany, France, and Italy Services PMI; Eurozone Retail Sales and Unemployment Rate; ECB Minimum Bid Rate Announcement; US ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI; US and Canada Trade Balance.
Thursday will offer Australia’s Retail Sales and Trade Balance; Eurozone Retail Sales;; BOE Official Bank Rate and Asset Purchase Facility announcement; Canada’s Ivey PMI; and US Jobless Claims and Revised Nonfarm Productivity.
Friday’s activity will decline considerably, but traders will surely monitor news such as German Factory Orders; Switzerland’s Foreign Currency Reserves; UK Halifax HPI; Canada and US jobs data; and OPEC meetings.