Here are the latest developments in global markets:
- FOREX: The euro headed for a third consecutive day of gains on Monday although the dollar posted some gains as well against the yen, with investors keeping a close eye on political developments in Italy, where a coalition government may be formed earlier than expected. Euro/dollar rose to to 1.1982 (+0.33%), while dollar/yen touched 109.57 (+0.16%). The US dollar index fell to 92.29 (-0.26%), set to complete a third red day in a row. Pound/dollar rose by 0.34% ahead of Tuesday’s employment figures out of the UK. This comes after the BoE held rates steady and cut its growth projections last week. In the antipodean sphere, aussie/dollar reached a two-week high of 0.7548 (+0.05%), while kiwi/dollar ticked down to 0.6952 (-0.29%). Dollar/loonie fell to 1.2765 (-0.20%), while the Turkish lira moved lower versus the greenback on Monday (-0.15%), as investors continued to worry about the central bank’s ability to rein in double-digit inflation. Data out of the country showing a wider-than-expected current account deficit in March added further pressure to the currency.
- STOCKS: European equities eased today with bonds as political strains from Italy to the UK outweighed optimism over waning global trade tensions. The pan-European STOXX 600 and the blue-chip Euro STOXX 50 were down by 0.20% and 0.01% respectively at 1100 GMT. In Germany, the DAX retreated by 0.32 %, while the French CAC 40 fell by 0.21%. In Italy, the FTSE MIB 100 was down by 0.61%, while the British FTSE 100 was weaker by 0.20%. The Spanish IBEX 35 traded lower by 0.14%. Turning to the US, futures tracking the Dow Jones, S&P 500, and Nasdaq 100 were all in positive territory, pointing to a higher open today, continuing the upward movement from last week.
- COMMODITIES: Oil prices jumped after OPEC raised world oil demand forecasts for 2018, saying that geopolitical risks might weigh on oil supply in the coming months. West Texas Intermediate (WTI) crude oil and Brent climbed t0 $70.81 (+0.14%) and $77.37 (+0.32%) per barrel in the wake of the news. In precious metals, gold was up by 0.13%, trading close to $1,320 per ounce level.
Day ahead: OPEC delivers monthly oil report; Aussie eyes RBA meeting minutes & Chinese industrial production
The economic calendar will be lacking major releases later today, while geopolitical and trade developments are expected to remain in the spotlight following Trump’s decision last week to pull out of the 2015 Iranian nuclear deal. Moreover, an inconclusive meeting between the US and the Chinese trade negotiating teams in early May signaled that a trade agreement regarding the US import tariffs might come later rather than sooner, but Trump’s order on Sunday to assist a Chinese telecom company eased those worries ahead of the next round of trade talks in Washington this week.
NAFTA negotiations will be gathering interest as well after the US, Canada, and Mexico failed for once again to reach a trade agreement on Friday. The pressure to reach a deal, though, has increased after the US House of Representatives speaker Paul Ryan said he needed details on the new NAFTA by May 17.
In the Eurozone, eyes will remain on Italy in the absence of key data releases out of the bloc as the populist parties, the anti-establishment Five Star Movement and the far-right League party, are said to be nearing to lock a coalition deal. Today, the leaders of the two parties are scheduled to meet the Italian President to inform him of their plans. Note that the aforementioned Eurosceptic parties gained significant support against the traditional centrist parties during the latest Italian general elections, potentially shedding a dark light on the country’s future relationship with the EU.
As for today’s, public appearances, speeches by St. Louis Fed President James Bullard (a non-voting FOMC member in 2018) and ECB Chief Economist Peter Praet will be in focus at 1340 GMT and 1615 GMT respectively.
Early on Tuesday, the RBA will publish minutes from its latest policy meeting at 0130 GMT, providing details on its decision to leave interest rates unchanged for the 19th consecutive month. A half an hour later readings on Chinese industrial production and retail sales will follow, adding further volatility to the aussie. According to analysts, industrial production in China is anticipated to grow faster in yearly terms in April, while annual retail sales are said to inch down in the same month.