US Equities ended in positive zone on strong US Retail Sales +17.7% and Trump consideration of $1 trillion spending.
Market seems to like Powell comments that “US economy is nearing end of shutdown and beginning to rebound” and “FED is yet to wind down its balance sheet”. But later Powell comments on non-aggressive approach to corporate bonds buying and ruled out negative rates capped Equities topside and lifted USD higher.
- USD index raced higher to 97.25 before settling near 96.96 at NY closing.
Outside US, UK data was mixed with better than expected 3.9% Unemployment Rate but still facing a huge 528.9k Jobless Claims and lower weekly earnings data.
- NZ Q1 Current Account GDP Ratio still negative at -2.7%; Japan Exports -28.3% y/y; Singapore May Non-Oil Exports -4.5% vs last -5.8%.
So far limited impact from North Korea news but border clashes between India/China is lifting USD/INR forward higher and may worsen as additional fatalities are reported.
- Coming the next day, we have UK CPI, US Housing Starts, Canada CPI, NZ Q1 GDP.
FED Powell will be speaking again tomorrow US time. There is a bit of risk-off tilt today after poor Japan and NZ data but the trading will be within intraweek range.
- A way to Sell Gold Put, Sell AUDJPY Calls, and Strangle GBPUSD.
a slight risk-off after good news of Germany approving multi-billion EUR debt plan downplayed the fear of seeing resurgence of COVID19 cases in 10 US States, Japan and Beijing.
- NZ reported poor Q1 GDP -1.6% vs exp -1.0% q/q, weighing on NZD from 0.6476 to 0.6438.
Little news from Powell last night other than urging Congress not to pull back relief programs too quickly. AUD easing down below 0.6880 and could test 0.6800/20 on this momentum unless we get big surprise on Aussie Employment.
- USDJPY dipping below 106.95 to 106.73, suspect geopolitical risk heating up on India/China conflict
G7 urging China to reconsider national-security law plan in HK (which China may ignore.)
Asian time we will have Aussie Employment, followed by BOE meeting, US Philly FED Biz Outlook, US Jobless Claims. If no new Central Bank’s injection news, lower JPY crosses today, a carried-forward sentiment from yesterday.