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월요일, 5월 28, 2018

The EUR/GBP is trading higher on the early week's action, peaking at a session high of 0.8795. Over the weekend, Italy's attempt to form a new govern

Euro rallies as Italy anti-establishment coalition fails to form successful government.Volumes are going to be thin for Monday with little of importance on the macro calendar and London dark for a long weekend.The EUR/GBP is trading higher on the early week's action, peaking at a session high of 0.8795. Over the weekend, Italy's attempt to form a new government were scuttled by the inbound coalition Prime Minister after the Italian President rejected the new government's selection for Economy Minister, an avid anti-Euro critic. Despite the fact that Italy is likely to head into a new round of elections amid calls for the President's impeachment following the constitution-challenging move, markets are reacting positively to the news as the far-right and anti-establishment coalition now governing Italy appears to have had their anti-Euro leanings squashed. The EUR is bidding up on the news that Italy failed to install a Euro-sceptic as Economy Minister, and the Euro is lifting against the UK's Sterling, which continues to flounder amidst consistently dovish data and a wounded Bank of England (BoE) that is still attempting to regain its footing after being knocked off their hawkish perch recently. Monday sees little action on the economic calendar, and with London markets shuttered for the long weekend thanks to the Spring Bank Holiday, volatility is likely to be limited to kick off the new week's first market session.EUR/GBP levels to watchAs noted by FXStreet's own Ross Burland, the EUR/GBP is "in a constructive correction from the lows of 0.8712 with eyes on the 100-D SMA at 0.8794 ahead of the key rising channel. 0.8820 is the next key resistance guarding the 200-D SMA at 0.8856. To the downside, 0.8620 guards a run towards 0.8526 as being the 78.6% retracement of the move from 2017 on the wide"

The Reserve Bank of Australia (RBA) board member Ian Harper is on the wires now, via Reuters, speaking on the wage growth and interest rates outlook.

The Reserve Bank of Australia (RBA) board member Ian Harper is on the wires now, via Reuters, speaking on the wage growth and interest rates outlook.Key Headlines:Falling house prices wouldn't scuttle rate hikes. Wage growth "is all slow". Wage hotspots are not obvious. Wage growth recovery will be a long haul. RBA has a "steady as she goes" approach.

Timme Spakman, Economist at ING, notes that the international trade was down 1.2% percent in March so that Q1 was just 0.4% up from December 2017. Ke

Timme Spakman, Economist at ING, notes that the international trade was down 1.2% percent in March so that Q1 was just 0.4% up from December 2017.Key Quotes“Even before the recent protectionist measures kicked in, international trade declined for the second month in a row. The White House's trade policy will cast a shadow on further trade growth for months to come.” “The current figure does not yet reflect the current tensions and recently taken protectionist measures such as the steel and aluminium tariffs imposed by the US at the end of March. Although countries have been exempted from the US tariffs on steel and aluminium, the price that countries like South Korea pay for this puts a break on trade growth as well.” “Last weekend’s handshake between the US and China looks like a sign of de-escalation. However, the risk on trade restricting measures remains. Although the US suspended the current tariffs, the Trump administration remains focused on narrowing the US trade deficit. Since no trade policy can achieve a significant reduction in the US trade deficit and the deficit looks likely to increase, tensions are bound to build-up again.” “On the other front of the trade war, a deadline is closing in.” “Although the economic impact of the Steel and Aluminium tariffs by the US and the EU’s retaliatory tariffs will be mild, it increases the likelihood of an expanding trade war between the EU and the US which would hurt trade growth significantly.” “The President’s focus on the US trade deficit, and his limited ‘successes’ in bilateral negotiations make it unlikely that he will soften on trade. This casts a shadow over further trade growth this year.”

Analysts at Nomura note that the total durable goods orders of US fell 1.7% m-o-m in April, lowered by a sharp decline in orders of transportation equ

Analysts at Nomura note that the total durable goods orders of US fell 1.7% m-o-m in April, lowered by a sharp decline in orders of transportation equipment (Nomura: -1.2%, Consensus: -1.3%).Key Quotes“Transportation goods orders fell 6.1% m-o-m as civilian aircraft orders, typically volatile, fell 29% m-o-m.” “Durable goods orders excluding volatile transportation equipment, a better indicator of current activity, rose 0.9% m-o-m during the month, above our and market expectations (Nomura: 0.6%, Consensus: 0.5). This reading appears consistent with the steady pickup in economic momentum after a slightly weaker-than-expected Q1. In addition, the March estimate was revised up to a 0.4% m-o-m increase (previously reported as 0.1%). This report shows solid industrial sector activity moving into Q2.” “GDP tracking update: The gain in orders of core capital goods was stronger than we expected in April, implying healthy growth in equipment investment in Q2. However, while inventories of durable goods at factories rose mostly in line with our expectations in April, modest upward revisions created a higher jumping-off point from Q1, reducing the change in inventories in Q2. Altogether, our Q2 real GDP tracking estimate is unchanged at 3.4% q-o-q saar. Q1 estimate is also unchanged at 2.1% q-o-q saar.”

   •  Rebound from a 10-month old ascending trend-line support.    •  A strong follow-through move beyond 50-hourly SMA needed for any further recove

   •  Rebound from a 10-month old ascending trend-line support.
   •  A strong follow-through move beyond 50-hourly SMA needed for any further recovery.
The EUR/CHF cross built on the weekly bullish gap and has now reversed Friday's steep fall to near two-month lows. The Italian President Sergio Mattarella rejected a eurosceptic candidate for the position of Economy Minister and prompted the Prime Minister to resign.  The latest development against the anti-establishment coalition provided a much-needed respite for the shared currency and helped the cross to bounce off an ascending trend-line support, extending from lows touched in August 2017 and February 2018. The cross also snapped four consecutive days of losing streak and is now making a fresh attempt to build on its momentum back above 50-period SMA on the hourly chart.  A sustained move would suggest that the bearish trend might be losing momentum and the cross could aim towards surpassing an intermediate barrier near mid-1.1600s (100-hourly SMA) before eventually darting towards reclaiming the 1.1700 handle (200-hourly SMA). Alternatively, failure to build on the momentum, and a subsequent slide back below the 1.1600 handle could drag the pair back towards challenging the ascending trend-line support, currently near mid-1.1500s. A convincing break below the mentioned trend-line support would mark a fresh bearish breakdown and pave the way for an extension of the pair's bearish trajectory.
 

New Zealand’s economic expansion is getting a little long in the tooth; fiscal policy and the terms of trade are the two main factors that look set to

New Zealand’s economic expansion is getting a little long in the tooth; fiscal policy and the terms of trade are the two main factors that look set to keep growth ticking along, according to analysts at ANZ.Key Quotes“This week, we take a look at the make-up and the robustness of the current record high in the terms of trade. In short: it’s encouragingly diversified by good, but less so by market. Looked at individually, the global supply-demand balance for our main commodities looks price supportive, even though it appears global growth is past its peak. But if a more marked slowdown were to emerge, history suggests our commodity prices are likely to go down together.” “The week ahead brings reads on both business and consumer confidence, as well as consents, the terms of trade, and the RBNZ’s latest take on financial stability risks.”

Asia equities are coming up mixed for the new week, with the Japanese Nikkei 225 slightly down on the day following a week-opener bullish gap into the

Asia stocks mixed on a cautious Monday, gainers spread the middle with hesitant losses.Japan's Nikkei could form into a bullish continuation, but geopolitical tensions continue to rob risk appetite.Asia equities are coming up mixed for the new week, with the Japanese Nikkei 225 slightly down on the day following a week-opener bullish gap into the 22,500.00 region. The geopolitical confusion that has plagued global equity markets for most of 2018 continues unabated, with the off-and-back-on US-North Korea summit apparently still on for June 12th following US President Trump's day-long cancellation of the meeting, and continued the continued US-China trade spat saw risk appetite drag US equities lower to end last week. The Asia session opens the week mixed, with Asia traders balking at Friday's downturn as oil prices reverse their recent fortunes; Australia's ASX index is down -0.54%, while the Shanghai Composite and Hong Kong's Hang Seng Index are up almost 0.2% and 0.50% respectively. Japan's Nikkei index is also struggling to develop bullish momentum for Monday, down around 0.10% on the day so far.Nikkei levels to watchThe Nikkei 225 could be trying to stage a technical recovery to the 23,000.00 major level, but last week's decline puts Japan's major index on the downside, and traders could soon be seeing a replay of the bearish action that took the Nikkei into a low of 20,318.00 in late March. Risk aversion is sapping further bullishness, and the 23,000.00 major handle, which constrained prices last December, looks set to hold for now, and a bearish continuation from here to could easily fall to 21,500.00 and hit the 50.0 Fibo retracement level, assuming support from the 200-day SMA at 21,700.00 fails to hold.

Yonhap, South Korea’s state-run news agency, reports that the North Korean delegates are headed for Singapore today, in order to prepare for the Trump

Yonhap, South Korea’s state-run news agency, reports that the North Korean delegates are headed for Singapore today, in order to prepare for the Trump-Kim Summit, which looks like it is still scheduled for June 12.Also Read: S. Korea's Moon may join Trump, Kim in Singapore for the 3-way summit - Yonhap                     US-North Korea summit preparations are moving forward - Reuters

The GBP/USD is trading up softly from last week's close, testing into 1.3325 heading into a quiet Monday. The UK is on holidays for Monday for the Sp

Long weekend sees a low volatility Monday for the upcoming London market session.Little of note on the economic calendar for the Pound this week ahead of Friday's PMI.The GBP/USD is trading up softly from last week's close, testing into 1.3325 heading into a quiet Monday. The UK is on holidays for Monday for the Spring Bank Holiday, pulling a long weekend and giving the new trading week a quiet start.A quiet week greets the hurting SterlingIt's a quiet week in general for the Sterling, and the first macro release for the UK won't be hitting until late Wednesday at exactly 23:01 GMT with the GFK Consumer Confidence Survey. With the Consumer Survey last printing at -9, confidence within the UK's economy continues to slump, and the Bank of England (BoE), which was recently pulled off of their hawkish perch that had anticipated a May rate hike, has been struggling to develop any real momentum as the GBP, and the UK economy, continue to falter to the weak side, extending the first quarter's 'slight economic downturn' further south than expected. As FXStreet's own Mario Blaschak noted on the GBP's outlook heading into this week, "the macro picture in the UK is framed by two important trends, slowing economic growth and decelerating inflation. The UK inflation is approaching the Bank of England 2% inflation target faster than originally predicted in support of the real, inflation-adjusted wages while the economic growth is almost stagnant in the first quarter of this year. Both measures though support the argument of the Bank of England staying pat on the Bank rate with the market forecasting 0.25% Bank rate hike in February on 2019 based on effective money market rates."GBP/USD levels to watchValeria Bednarik, FXStreet's Chief Analyst, on the GBP/USD's technical stance heading into a quiet Monday session: "the UK will kick start the week with a bank holiday, and the local macroeconomic calendar has little to offer until Friday, with the release of May preliminary Markit manufacturing PMI, expected at 53.6 from the previous 53.9. The daily chart for the pair shows that, after a period of consolidation at the beginning of the month, it resumed its bearish trend that has not yet found a bottom, as technical indicators accelerated their slides, with the Momentum easing modestly, but at fresh 2-week lows, and the RSI heading south around 21. Shorter term, and according to the 4 hours chart, the pair is also biased lower, with a bearish 20 SMA providing a dynamic resistance at 1.3365 and technical indicators leaned lower, the Momentum without directional strength but the RSI accelerating lower and supporting further slides ahead." Support levels: 1.3280 1.3245 1.3210    Resistance levels: 1.3320 1.3365 1.3400  

Analysts at JP Morgan Chase in Tokyo said in its latest note that the EUR/JPY cross remains exposed to upside risks amid easing North Korea tensions.

Analysts at JP Morgan Chase in Tokyo said in its latest note that the EUR/JPY cross remains exposed to upside risks amid easing North Korea tensions.Key Quotes (via Bloomberg):“Risk appetite has picked up with US / North Korea summit back on track. Markets have already priced in Italy risks - EUR/JPY also reacting positively to the rejection of euro-skeptic finance minister candidate in Italy. Warns on 111 level in USD/JPY - US trade, tariffs policies will prevent moves higher.”

Japan’s PM Shinzo Abe is out on the wires now, via Reuters, expressing his take on the trade with the US, especially after last week’s US tariffs on a

Japan’s PM Shinzo Abe is out on the wires now, via Reuters, expressing his take on the trade with the US, especially after last week’s US tariffs on auto imports.Key Points:Wants to speak again with Trump. Trans-Pacific Partnership (TPP) best trade format for Japan, will keep explaining this to Trump. Japanese automakers have created jobs and made huge contributions to the US economy. Watching US tariffs moves on auto imports.

The People’s Bank of China (PBOC) hikes the interest rates on 28-day reverse repurchase (repos) agreements by 5 basis points (bps) on Monday. The rat

The People’s Bank of China (PBOC) hikes the interest rates on 28-day reverse repurchase (repos) agreements by 5 basis points (bps) on Monday. The rate hike matched previous increases in other tenors in the last two months.Key Details:The interest rate for 28-day reverse repos was raised to 2.85 percent from 2.80 percent. The rate for seven-day stood at 2.55 percent.

The EUR bulls take a breather, leaving the EUR/USD pair in a phase of upside consolidation near the 1.17 handle, as markets await fresh developments s

Euro bounces as Eurosceptic Italy’s coalition government formation fails. Corrective rally due on the cards ahead of the US NFP? The EUR bulls take a breather, leaving the EUR/USD pair in a phase of upside consolidation near the 1.17 handle, as markets await fresh developments surrounding the Italian political environment for the next push higher.Focus on Italian politics at the start of the NFP weekThe EUR/USD pair opened the NFP week with a bullish gap of 35-pips and extended the rebound from six-month lows of 1.1646 well above the 1.1700 levels, on the back of weekend’s news that the attempts at forming a coalition between the Five Star Movement and League have failed after Sergio Mattarella, the Italian President, vetoed the choice of economy minister, who was seen as anti-Euro. The rebound in the Euro triggered fresh US dollar selling across the board, despite the news that North Korea’s leader Kim pushed to kick-start the talks with the US. The US President Trump twitted earlier today that the US team had arrived in North Korea to make arrangements for the Summit, according to Reuters. The finding currency, Euro, also remains supported amid moderate risk-aversion persisting across Asia, as oil prices extending their selling spiral amid output boost talks. Meanwhile, slow volumes and illiquid trades could also help exaggerate the corrective pullback in the major from half-yearly lows. The UK and US markets are closed in observance of Spring Bank holiday and Memorial Day respectively. Looking ahead, the focus remains on the Eurozone and US inflation gauges ahead of Friday’s crucial US non-farm payrolls release.EUR/USD Technical LevelsYue Wang, Co-Founder of Forexsignal.guru, notes: “According to Volume Profile study in Tradingview, long-term control point is around 1.1770. Below here, directly bearish toward 1.1594, 1.1550 or even 1.1474/40 could not be ruled out. Although downside may be limited from current levels (if seen, perhaps about 1-2 big figures...?), I still suggest to well control the risk: partial close the long trade from 1.1655 and lower stop to 1.1530; or simply close the trade for some small profit and wait for better opportunities.  Daily support      Levels: 1.1625 1.1597 1.1582 1.1553. Daily resistance Levels: 1.1694 1.1705 1.1723 1.1732 1.1747.” 

South Korea’s state news agency, Yonhap, is out with the latest headline, citing that South Korea's President Moon may join the US President Trump, No

South Korea’s state news agency, Yonhap, is out with the latest headline, citing that South Korea's President Moon may join the US President Trump, North Korea’s leader Kim Jong Un in Singapore for 3-way summit. Earlier today, Reuters reported the US President Trump’s tweet, stating that the US team had arrived in North Korea to make arrangements for the Summit.

Having found fresh buyers once again near the 0.6920 region, the NZD/USD pair made another attempt to regain the 0.6950 barrier, helped by the extensi

Aggressive USD selling pushes Kiwi 30-pips higher,           looks to regain 0.6950.Will the uptick sustain amid risk-off, as oil and stocks trend lower?Having found fresh buyers once again near the 0.6920 region, the NZD/USD pair made another attempt to regain the 0.6950 barrier, helped by the extension of the losses in the US dollar across its main competitors. The broad-based selling in the US dollar is mainly driven by a sold rebound staged by the EUR/USD pair, as the Euro turned bullish on reports that the newly-formed Eurosceptic Italian coalition government failed. Meanwhile, upbeat China’s April industrial profits combined with the renewed optimism over the US - North Korea Summit also helped lift the sentiment around the major. The US President Trump twitted earlier today that the US team had arrived in North Korea to make arrangements for the Summit. However, it remains to be seen if the spot can sustain the renewed upside, as the risk-off sentiment is seeping back into Asia amid falling oil prices after the OPEC and non-OPEC producers are considering easing supply curbs. Also, the pair may continue to take the cues from the USD dynamics and broader market sentiment amid holiday-thinned light trading, with the UK and US on holidays.NZD/USD Technical LevelsFlavio Tosti, FXStreet’s Analyst, writes: “The 0.6900 handle is acting as support and resistance as the market has used the level as the main pivot in recent days. A break below the 0.6900 level should bring the market to 0.6851 swing low followed by the 0.6800 figure. To the upside, bulls should meet resistances at 0.6940 supply level and at 0.6975 swing high. Additionally, the bearish head-and-shoulders formation might send Kiwi lower but bears will need to overcome the rather strong 0.6900 handle.”   

Crude oil is continuing to fall to kick off the new trading week, with WTI crude falling into 66.00 per barrel as output rises begin to force back ele

Oil slumps as major producers ponder lifting production limits to combat elevated oil prices.Too much, too fast has turned oil's rapid rise into an inflation and growth risk.Crude oil is continuing to fall to kick off the new trading week, with WTI crude falling into 66.00 per barrel as output rises begin to force back elevated prices. OPEC has joined forces with Russia, the world's largest producer of crude oil, and are set to begin lifting self-imposed production caps, after forcibly cutting back on output figures in an attempt to combat the US supply glut that has flooded global markets. Restricted OPEC production and continuous geopolitical tensions from the Middle East have seen WTI crude oil prices lift nearly 26% from January's low of 57.88 to a recent high of 72.83. OPEC and Russia recently announced they will begin to weigh lifting production caps as lifting oil costs threaten to hamper economic growth and spark lop-sided inflation.WTI levels to watchCrude's drop on rising production limits is beginning to pick up pace, and WTI is trading into 65.90 after four straight trading days of declines, and on pace to make it a fifth. Current action is running into support from a former resistance level around the 66.00 handle, and a further break lower could test into April's low of 61.80; the 50.0 Fibo retracement level of the recent leg up also rests nearby at 65.35, and bullish traders will be hoping for a strong bounce off of the rising trendline that begins at January's low of 27.70.

AUD/USD has popped higher to test the 100-hr SMA at 0.7565 making a fresh high for the session at 0.7568. Markets are a little higher in thin trade wh

AUD/USD: bulls taking charge with a test of the 100-hr SMA.AUD/USD: traders will look ahead to the US nonfarm payrolls.AUD/USD has popped higher to test the 100-hr SMA at 0.7565 making a fresh high for the session at 0.7568. Markets are a little higher in thin trade while the US and N.Korea seek to proceed with the June Summit. AUD/USD had started out the week with a shallow bid within the broader consolidation while otherwise, the Aussie had been weighed at the end of last week by EM concerns and lower commodities. However, with the Summit back on the cards for June 12th in Singapore, that is good news for China and indeed the Aussie. A team of U.S. officials crossed into North Korea on Sunday for talks to prepare for a summit between President Trump and Kim Jong Un, as both sides pressed ahead with arrangements despite the question marks hanging over the meeting, the Washington Post reported.  “Our United States team has arrived in North Korea to make arrangements for the Summit between Kim Jong Un and myself. I truly believe North Korea has brilliant potential and will be a great economic and financial Nation one day. Kim Jong Un agrees with me on this. It will happen!” - Trump said over the weekend.The week aheadTraders will be getting set for nonfarm payrolls, ADP private employment, Wednesday, and also Q1 GDP, second estimate on the same day. The dollar is firmly in demand and the trend in the DXY shows little sign of correcting currently, underpinned by the notion that the Fed will be raising rates again as soon as next month, (Fed fund futures yields slipped a little further on Friday, but still predict a rate hike in June, with another by year-end). AUD/USD levelsLooking to make a short-term base, technicals have switched again and favor the buyers. So far, the 10-DSMA supports at 0.7537 and RSI rise along with the price. On the downside, the May's low is eyed, below that target May 2017 low. 0.7500 is key.
 

On Monday, the People’s Bank of China (PBOC) set the USD/CNY midpoint rate at 6.3962 vs. 6.3867 Friday’s close. PBOC injected 20bn Yuan through 7-day

On Monday, the People’s Bank of China (PBOC) set the USD/CNY midpoint rate at 6.3962 vs. 6.3867 Friday’s close. PBOC injected 20bn Yuan through 7-day reverse repos and 10bn Yuan via 28 day reverse repos in open market operations (OMOs) today.  

In the run-up to Italy's weekend political strife, Moody's placed Italy's Baa2 rating on downgrade watch, citing a "material weakening in Italy's fisc

In the run-up to Italy's weekend political strife, Moody's placed Italy's Baa2 rating on downgrade watch, citing a "material weakening in Italy's fiscal strength, given the fiscal plans of the new coalition government." Moody's also noted that structural reform efforts underway are threatened by the new Italian government coalition. The weekend's developments in Italy are unlikely to spark much confidence in Moody's though, following the Italian President's rejection of the coalition party's nominee for Economy Minister, a vocal critic of the Euro. Italy's government has failed to be formed following March's election, and if the Italian President selects an unelected technocrat to the economy position it could spark a run of re-elections, further gumming up the Italian political system and garnering support for the far-right and Euro-sceptic government coalition.

USD/JPY started out in Asia on Monday jumping to a high of 109.82 having closed the NY session at 109.38 in a bullish opening gap. Bulls are buying in

USD/JPY: Bulls are buying in on the indications that the Trump-Kim summit would take place after all.USD/JPY: technicals lean bearish; The pair settled below its 200 DMA.USD/JPY started out in Asia on Monday jumping to a high of 109.82 having closed the NY session at 109.38 in a bullish opening gap. Bulls are buying in on the indications that the Trump-Kim summit would take place after all. Currently, USD/JPY is trading at 109.61 with bears testing the downside session's support.  USD/JPY has continued on the advance and in the correction of Thursday's geopolitical and Fed Minutes driven lows and catches a fresh bid on news that Trump said that there is still a chance of the June 12th  North Korea summit taking place. At the same time, the electronic indexes in the DJIA and S&P are pointing to a higher open when markets in the US return after the holidays with the Nikkei leading the pack in Tokyo today.  As for yields, the US 10yr treasury yield fell from 2.99% to 2.92% - a three-week low - while 2yr yields fell from 2.52% to 2.47%.  We also had some Fed comments that came from Chair Powell, explaining that forward guidance may have a smaller role in future; and Kaplan also crossed the wires and said that normalizing rates gradually is appropriate. "A team of U.S. officials crossed into North Korea on Sunday for talks to prepare for a summit between President Trump and Kim Jong Un, as both sides pressed ahead with arrangements despite the question marks hanging over the meeting, " the Washington Post has reported. The week aheadMeanwhile, for the week ahead, traders will be getting set for nonfarm payrolls. But before then, we have ADP private employment, Wednesday, and also Q1 GDP, second estimate on the same day. The dollar is firmly bid and the trend shows little sign of correcting currently, underpinned by the notion that the Fed will be raising rates again as soon as next month, (Fed fund futures yields slipped a little further on Friday, but still predict a rate hike in June, with another by year-end). USD/JPY levelsValeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, the pair settled below its 200 DMA, while technical indicators entered bearish territory straight from overbought levels.  "In the 4 hours chart, the pair is trading between its 100 and 200 SMA, with the largest offering support at 109.10, while the Momentum indicator losses upward strength below its mid-line and the RSI stands pat around 39, all of which favors a downward extension on a break below the mentioned support," Valeria explained.

The AUD/NZD is trading into recent lows near the 1.0900 level as the pair's bullish momentum continues to wash away as the Aussie and the Kiwi compete

Aussie flubs the week opener, continues to head lower against the NZD.Early week sees thin data for the Antipodeans, first release on Tuesday for the Kiwi.The AUD/NZD is trading into recent lows near the 1.0900 level as the pair's bullish momentum continues to wash away as the Aussie and the Kiwi compete to decide which currency is worse. Both Antipodean currencies have been suffering from crises of confidence, with both the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) suffering under the burden of sluggish growth within their respective economies and a lack of response to central bank stimulus. Both the RBA and the RBNZ are expected to remain flat on interest rates into 2020 by market estimates, and economic figures for both economies continues to slump and miss estimates despite "positive outlooks" from both countries. The RBNZ is especially weak-footed, with the central bank given 50/50 odds of making a further interest rate cut before a hike might take place. Monday is a quiet showing for both currencies, and no data will be dropping until Tuesday, when the NZD will see the RBNZ's Financial Stability Report at 21:00 GMT, followed by NZ Building Permits for the month of April at 22:45 GMT, which last printed at 14.7%.AUD/NZD levels to watchThe AUD is struggling to continue its recovery against the Kiwi, climbing from April's low of 1.0488 to test the waters near the 200-day SMA, currently sitting just below at 1.0880. After facing a downturn in early May to 1.0655, the AUD/NZD is now nearing resistance at the 61.8 Fibo level of 1.0985. There is a confluence between the 200-day SMA and the 50.0 Fibonacci retracement of the pair's major decline from 1.1290 that began in October of 2017, 1.0890 could rotate to provide support if bulls can manage to deliver enough momentum to close over the area.

Analysts at Nomura offered their model's projection for today's fix. Key Quotes: "Our model1 projects the fix to be 68 pips higher than the previous

Analysts at Nomura offered their model's projection for today's fix.Key Quotes:"Our model1 projects the fix to be 68 pips higher than the previous fix (6.3935 from 6.3867) and 44 pips higher than the previous official spot USD/CNY close of 6.3891. The basket implied change is 50 pips higher than the previous official spot USD/CNY close (6.3941 from 6.3891)."

According to reporting by the Financial Times, the UK's preparations for a potential 'no-deal Brexit' scenario have come to a grinding halt, making it

According to reporting by the Financial Times, the UK's preparations for a potential 'no-deal Brexit' scenario have come to a grinding halt, making it difficult for Prime Minister Theresa May to pull out of negotiations with the EU heading into Brexit season in early 2019. The revelation that contingency plans to avoid a "hard-Brexit" places added pressure on negotiations as PM May struggles to keep voters and politicians on both sides of the Brexit line happy. As the prime minister prepares for what is arguably the trickiest phase of the Brexit talks, the government’s official position is that it can reach an accord with the EU — but that it is also preparing contingencies for “no deal” if Brussels tries to strike too hard a bargain. However, Whitehall officials are privately conceding that preparations for a “cliff edge” Brexit next March are nowhere near the level they need to be if a threat by Mrs May to walk away from the talks were to be credible. “Our preparedness for no deal is virtually non-existent,” said one senior British official working on Brexit. “Our ability to deliver a ‘no deal’ outcome recedes with every week that passes.”   - Financial Times A government-allocated £1.5 billion for 'Brexit prepardness', which is meant to cover all aspects of Brexit planning, only became available in April of this year, leaving hard-Brexit planners only months to accomplish what many expect could take several years.

The UK's Boris Johnson warned once again on Sunday that the UK won't be able to pursue ambitious trade deals if it remains within the EU's customs uni

The UK's Boris Johnson warned once again on Sunday that the UK won't be able to pursue ambitious trade deals if it remains within the EU's customs union following Brexit. Johnson, while speaking in Peru over the weekend, highlighted the fact that it would be more difficult for the UK to secure lucrative and complex trade agreements if it was still tied to the EU's trade agreement system. His latest remarks come just days after Mr Johnson warned the Prime Minister she must not betray the country by keeping the UK in the customs union. It came amid claims that a so-called backstop option to avoid a hard border in Northern Ireland could be used to keep the EU and UK linked by the backdoor. Speaking in Peru he said the backstop must only ever be a last resort and time-limited... Building on that message he warns today that Britain has become too "Eurocentric" and abandoned trade links with South America and others in favour with closer ties to France and Germany, resulting in a "pitiful" share of trade with countries like Peru.. Mr Johnson writes: "Our Latin American partners are emphatic: if this is to work, we must come fully out of the EU customs union; and there is a lesson from Latin America."  - The Telegraph

EUR/GBP is better bid at the start of the week as the Italian anti-euro coalition breaks down and Italy fails to form a government. EUR/GBP is current

EUR/GBP caught an opening bid on Sergio Mattarella, the president of Italy, vetoed the choice of economy minister, prompting the Prime Minister to resign.EUR/GBP: technicals lean bullish with eyes on the 100-D SMA at 0.8794.EUR/GBP is better bid at the start of the week as the Italian anti-euro coalition breaks down and Italy fails to form a government. EUR/GBP is currently trading at 0.8782 having made an opening high of 0.8785 from a Friday close of 0.8759.  EUR/GBP had entered the US closing session on Friday on the backfoot and was defensive vs the sharp sell-off from 0.8780 down to 0.8741 the low. Bulls battled their way back to 0.8763 within a rage of 0.8780-0.8741. Besides the political angst in Europe, the 2nd estimate of UK Q1 GDP matched the prior while UK Q1 business investment was a drag on the pound, helping the cross higher. However, the release of better-than-expected UK monthly retail sales data remains a plus for sterling bulls. The latest ONS report showed on Thursday that UK retail sales recorded a strong monthly growth of 1.6% in April.Italian Prime Minister resignedItaly's attempt to form government fails as President sides with the Euro - ReutersFor the start of this week, the euro has found some relief on the news that Sergio Mattarella, the president of Italy, vetoed the choice of economy minister, prompting the Prime Minister to resign - euro is bullish on the basis that the coalition is euroskeptic, (EUR/USD opened with a bullish gap of 35 pips).EUR/GBP levelsThe cross is building the case for the upside and testing the 21-D SMA at 0.8779 in a constructive correction from the lows of 0.8712 with eyes on the 100-D SMA at 0.8794 ahead of the key rising channel. 0.8820 is the next key resistance guarding the 200-D SMA at 0.8856. To the downside, 0.8620 guards a run towards 0.8526 as being the 78.6% retracement of the move from 2017 on the wide.

Japan Corporate Service Price (YoY) up to 0.9% in April from previous 0.5%

The AUD/JPY is trading just beneath 83.00 after a bullish gap to start the new week's trading. The Aussie gapped higher by a tidy 40 pips to open the

The Aussie starts the week off with a bullish pop against the Yen.A thin macro calendar for the AUD sees shifting market sentiment in the driver's seat.The AUD/JPY is trading just beneath 83.00 after a bullish gap to start the new week's trading. The Aussie gapped higher by a tidy 40 pips to open the new week, and is trading close to 82.90 after trying and failing to retake the 83.00 major level several times last week. The pair traded flat for the latter half of last week following a quick decline from near the 84.50 level spurred on by a sudden flight to safety that saw the Yen rise against weaker currencies as recent market hopes of successful and peaceful resolutions to current US-led trade negotiations and geopolitical tensions appeared to be largely unfounded, draining last week's opening bid for risk appetite. This week is shaping up to be a quiet showing for the Aussie, and the early week's schedule is clear of any Australian macro figures, while the Yen will see the Unemployment Rate and Jobs/Applications Ratio indicators at 23:30 GMT. The Unemployment Rate is expected to hold steady at 2.5%, and the Job's/Applicant ratio is expected to shift upwards slightly from 1.59 to 1.6.AUD/JPY levels to watchDaily candles have the pair still lifting from a higher low at early May's swing point near 81.15, and the pair could be developing some support from the 50.0 Fibo level around 82.85, with last week's high of 84.50 putting in a two-month high for the pair as Aussie bulls continue to push from recent fourteen-month lows.

As reported by Reuters, a delegation of US officials has met with North Korean representatives at the North-South Korea border as preparations for the

As reported by Reuters, a delegation of US officials has met with North Korean representatives at the North-South Korea border as preparations for the US-North Korea summit appear to resume, and the meeting between the two world leaders appears to be back on, despite a public testament from US President Donald Trump last week that the US had decided to pull out of the arranged talks. Both Pyongyang and Washington are pressing ahead on plans for a summit after Trump pulled out of the proposed June 12 meeting on Thursday, only to reconsider the decision the next day. “A U.S. delegation is in ongoing talks with North Korean officials at Panmunjom,” State Department spokeswoman Heather Nauert said, referring to a village in the Demilitarized Zone (DMZ) that runs along the heavily armed border between North and South Korea. “We continue to prepare for a meeting between the President and North Korean leader Kim Jong Un,” she said in a statement. In addition to those talks, White House spokeswoman Sarah Sanders said a “pre-advance team” left for Singapore - where the summit has been expected to take place - on Sunday morning to work on logistics.  - Reuters There's a growing sense that North Korea and the US have differing viewpoints on what 'denuclearization' means, but North Korea has stated that it is still open to the idea of successfully holding a summit on June 12th. In previous talks with the US, North Korea has only suggested the dismantling of its entire nuclear arsenal if the US removes all of its troops from South Korea.

As reported by Reuters, Italy's attempt to form a government following recent elections has floundered after the Italian President, Sergio Mattarella,

As reported by Reuters, Italy's attempt to form a government following recent elections has floundered after the Italian President, Sergio Mattarella, rejected a eurosceptic candidate for the position of Economy Minister, triggering a constitutional challenge as the coalition government decries the move. The recent government election saw a coalition form between the far-right League and anti-establishment 5-Star Movement parties, and the leader of 5-Star is now calling for the President's impeachment following his rejection of anti-Euro Paolo Savona for Economy Minister by the newly-formed coalition. Financial markets tumbled last week on fears the mooted coalition would unleash a spending splurge and increase Italy’s already huge debt mountain, which is equivalent to more than 1.3 times the nation’s domestic output. Looking to allay investor concerns, Mattarella vetoed on Sunday the choice of 81-year-old economist Paolo Savona, a vocal critic of the single currency, to the pivotal economy post. Prime Minister-designate Giuseppe Conte promptly abandoned his efforts to form a government. In a somber, televised speech, Mattarella said he had accepted all the suggested ministers bar Savona. “I asked for that ministry an authoritative political figure from the coalition parties who was not seen as the supporter of a line that could provoke Italy’s exit from the euro,” he said.  - Reuters Concerns are now rising that the defunct government will push for a fresh round of elections, and the possibility of an un-elected technocratic government could see support swell for the anti-establishment coalition that barely missed a popular vote when counted together.

The AUD/USD is trading near 0.7560 to kick off the new week, largely unchanged following last week's sedate moves. The Aussie traded up last week aga

The Aussie looks set to continue trading flat after last week's quiet affair.The early week sees no figures or events for the AUD, first data for the week hits on Wednesday.The AUD/USD is trading near 0.7560 to kick off the new week, largely unchanged following last week's sedate moves. The Aussie traded up last week against the Greenback, but only slightly, finishing barely positive with a scant sub-30 pip gain on the week. The pair hit a one-month high of 0.7605 before getting caught in a lull to finish a week that saw a thin news schedule for the pair as the world focused on US-driven trade headlines. It's geared to be another slim schedule on the economic calendar, and the AUD is data-free until Wednesday's month-on-month Building Permits for April drop, forecast at a -3.0% contraction compared to the previous reading of 2.6%.AUD/USD levels to watchFXStreet's Chief Analyst Valeria Bednarik noted that despite the AUD/USD's flat tone, technical risks continue to lean bearish for the Aussie: "the AUD/USD pair corrected up to the 50% retracement of its latest weekly decline, ending the week a few pips below the 38.2% retracement of the same slide at 0.7565. The weekly chart shows that it’s the third consecutive one that the pair holds around the current levels, with the candles showing small bodies, but for a change, this last time it managed to post a higher high and a higher low. The battle for direction continues, although the risk remains skewed to the downside according to technical readings in the weekly chart, as the pair is developing below all of its moving averages, with the 100 SMA being the closest one, and converging with the 61.8% retracement of the mentioned decline at around 0.7655. The Momentum indicator in the mentioned chart has turned south within negative territory, while the RSI hovers around 41. In the daily chart, however, the pair managed to recover and settle above a modestly bullish 20 DMA, while technical indicators retreat within positive territory, not enough to suggest an upcoming decline. The 0.7505 Fibonacci level is the immediate support ahead of the low set at 0.7411, while a break below this last exposes a more relevant long-term support, at 0.7250. To the upside, the 0.7565 level is the first relevant resistance, followed by the mentioned 0.7655 Fibonacci level, with gains beyond this last needed to confirm an interim bottom and further gains ahead."

Analysts at Nomura highlight the key scheduled data events for the week ahead. Key Quotes: United States | Data preview We expect a below-trend 0.1

Analysts at Nomura highlight the key scheduled data events for the week ahead.Key Quotes:United States | Data preview We expect a below-trend 0.1% m-o-m increase in April’s core PCE index and a 205k NFP increase in May’s employment report. Case-Shiller home price index (Tuesday): Home price appreciation continued to accelerate in February with the 12-month percent change in the Case-Shiller composite 20 index increasing 0.4pp to 6.8%. With steady demand and continued supply shortages, we expect this trend to continue over the medium run. However, houses in low- to medium-tier markets may see a disproportionate share of the increases given recent tax legislation that could negatively affect high-end house price gains. Conference Board’s consumer confidence (Tuesday): Considering continued strength in the labor market, we expect Conference Board’s consumer confidence index to rise to 130.0 in May, from 128.7 previously. The University of Michigan consumer sentiment index was unchanged at 98.8 as favorable assessment of tax cuts balanced concerns over tariffs. However, the future expectations index rose, consistent with consumers’ ongoing optimism about future economic conditions. Conference Board’s confidence measures likely reflect consumers’ positive outlook on the economy.  ADP private employment (Wednesday): Consistent with our forecast for the May employment report from the BLS, we expect ADP to report a 205k gain in May private payroll employment. Q1 GDP, second estimate (Wednesday): The first estimate of Q1 GDP came in at 2.3% q-o-q saar. Incoming data since then suggest that the Q2 GDP growth will likely be lowered to 2.1% q-o-q saar in the second release by the BEA. Annual revisions to manufacturers’ inventories by the Census Bureau lowered inventory buildup at factories in Q1. In addition, the advance release of the Quarterly Services Survey for Q1 suggests weaker-than-expected consumer spending on services relative to the BEA’s assumptions, while business investment in intellectual properties may have been greater. Taken together, the net effect was likely negative. Advance goods trade balance and inventories (Wednesday): Trade deficit narrowed in March as exports rose sharply and outpaced imports. Imports slowed in March, reverting gains in February. We think that a strong increase in goods exports in March likely reverted in April while goods imports rebounded, and we forecast a modest widening in the goods trade deficit to $69.8bn, from $68.3bn.  Fed Beige Book (Wednesday): The Beige Book prepared for the 12-13 June FOMC meeting is likely to show continued modest to moderate growth across the 12 districts. Incoming data indicate some pickup in consumer confidence during March and April, after disappointing readings in January and February. Moreover, while concerns about US trade policy regarding steel and aluminum tariffs will likely show up again in the June Beige Book, broader concerns about trade tensions with China may have abated somewhat. Tight labor markets and labor shortages likely persisted across most districts with price increases at a “moderate” pace, similar to April. Overall, the data for 2Q has so far been strong and we expect the June Beige Book to reflect that. Initial jobless claims (Thursday): Initial and continuing jobless claims have recently shown increased volatility, but remain at low levels. Consistent with our optimistic labor market outlook, we expect these indicators to gradually stabilize and decline further. Personal income and spending (Thursday): Personal income likely rose at a trend-like pace of 0.4% m-o-m in April, after rising 0.3% in March. We expect a healthy 0.5% m-om increase in personal spending in April, reflecting a solid 0.4% m-o-m increase in core (“control group”) retail sales which exclude volatile components. Retail sales data suggest that momentum in personal spending could firm in Q2, after softness in Q1. Sales at most vendors rose steadily in April. Sales at auto dealerships were up 0.2% mo-m, implying that consumer purchases of autos rose modestly. Among non-core components, receipts at gasoline stations grew 0.8% m-o-m, reflecting higher retail gasoline prices during the spring driving season. Looking ahead, the recent tax cuts and healthy labor market should support consumer spending.  PCE deflators (Thursday): Incorporating relevant components from April’s CPI, PPI and import price releases, we expect core PCE to increase 0.132% m-o-m in April, lowering its 12-month rate to 1.8% (1.830%), from 1.9% (1.882%) previously. The further slowdown in m-o-m core PCE inflation, from 0.15% m-o-m in March, is driven by weakness in PPI’s medical care services, financial services and airline fare prices. We continue to expect core PCE inflation to pick up only gradually over the forecast horizon after base effects help drive up the y-o-y rate 0.3pp in March. For non-core components, we expect a steady 0.3% m-o-m increase in food prices, consistent with April’s CPI data, while energy prices likely rose 1.5% m-o-m as retail gasoline prices picked up during the month. Altogether, we expect a 0.2% (0.195%) m-om increase in the PCE index in April, corresponding to 2.0% (1.987%) y-o-y. Chicago PMI (Thursday): We expect a steady increase of 2pp to 59.4 for the Chicago PMI in May. Early indicators for business activity during the month are consistent with a pickup in activity. The Philly Fed, Empire State and Richmond Fed manufacturing surveys showed an improvement in their topline indices after some softening during April. As businesses focus more on the robust economic outlook for 2018 amid easing tension between the US and China, we expect them to remain optimistic. However, an escalation in trade tension may significantly affect business confidence. Pending home sales (Thursday): Pending home sales, a leading indicator of existing sales, increased 0.4% m-o-m in March, but remained 4.4% below their level 12 months ago. A burst of colder-than-usual weather in April may have affected contract signing activity during the month. Over the longer term, we expect growth in pending home sales to continue to face supply constraints despite steady consumer demand. Employment report (Friday): We forecast a solid 205k nonfarm payroll employment increase in May, with essentially all of the gain coming from private employers. Incoming labor market data point to steady employment growth and a still-low unemployment rate, consistent with our optimistic outlook for Q2 and 2018. Initial jobless claims remain subdued while the four-week moving average of continuing unemployment insurance claims has recently reached levels not seen since the early 1970s. We expect average hourly earnings to increase 0.22% m-o-m, likely leaving the y-o-y rate unchanged at 2.6%. Finally, we expect the unemployment rate to remain unchanged on a rounded basis at 3.9%. The downward pressure on the unemployment rate from the solid pace of job creation may have been partly offset by those joining the labor market encouraged by continued strong labor market conditions. ISM manufacturing index (Friday): We expect the ISM manufacturing index to rise to 58.0 in May, from 57.3 in April. The Empire State and Philly Fed surveys indicate solid activity in May, while concerns over US trade policies likely weighed on forward-looking measures.  Overall, the strength was broad-based across measures of current business activity and demand, which suggests a strong May ISM manufacturing report.  Construction spending (Friday): Construction spending fell 1.7% m-o-m in March, partly driven by a sharp 8.0% decline in private residential improvement spending. However, private residential construction spending overall was weak as both single- and multi-family construction spending declined. Construction spending in April could rebound given idiosyncratic declines in home improvement spending.  Vehicle sales (Friday): We think vehicle sales slowed to 16.6mn saar in May, from 17.1mn saar in April. Vehicle sales in April registered a 17.1mn saar, surprising to the upside, but we think sales will continue to slow following the continued downward trend after a surge in replacement buying activity in Q4 2017. That said, consumer purchases of autos remained steady in April, implying that consumer demand remains firm. If automakers spend more than usual on Memorial Day holiday promotions to unload high inventories, May’s vehicle sales figure could surprise to the upside. Looking through monthly volatility, although a strong labor market and gains in real disposable income will likely support consumer demand, sales boosted by high incentive spending and tight lending standards on auto loans point to some downside risk for auto sales in 2018.Euro area | Data previewThe week ahead Euro area flash HICP inflation and UK PMI manufacturing data are in focus this week. Germany inflation, May flash (Wed 30 May): We expect the flash reading of German HICP inflation to increase to 2.2% y-o-y in May from 1.4% in April. For core inflation, we expect a climb to 1.6% y-o-y in May from 1.0% in April. BoE household borrowing, April (Thurs 31 May): Typically, the mortgage approvals series is the main focus in this report, but the scale of the decline in net consumer credit in the March report means that this will be watched closely for any signs of a rebound. Note that our forecast for net consumer credit was made before UK Finance publishes its figures (which correlate highly with the BoE’s numbers) on Friday 25 May. Euro area inflation, May flash (Thurs 31 May): We expect the flash estimate of euro area HICP inflation to increase to 1.7% y-o-y in May from 1.2% in April. This increase stems from a positive impact from a higher oil price and the unwinding of seasonal distortions caused by the timing of the Easter holidays. The unwinding of seasonal distortions is also the main reason why we expect core inflation to increase to 1.1% y-o-y in May from 0.7% in April.  PMI manufacturing survey, May (Fri 1 Jun): Since its peak at the end of last year the headline index of the manufacturing PMI has fallen by around 4.5 points to just below 54. With the euro area survey having fallen for a fifth consecutive month in May, we expect a further modest decline in the UK survey too. We forecast around a 0.5 point fall to 53.5.Asia | Data previewJapanese April industrial production (Thursday): We expect industrial production to rise for a third straight month in April. In the survey of manufacturers' production forecasts carried out on 10 April, the production forecast for April, adjusted for prediction error, was 1.4% m-o-m. Exports, which are highly correlated with industrial production, were stronger than expected in April, and from the middle to the end of the month, economic activity appears to have improved, with JPY weakening against USD and the stock market rallying, indicating a strong likelihood that production will come in stronger than the survey of forecasts suggests.  China: We expect China’s official PMI to remain unchanged at 51.4 in May from April. High-frequency data (such as coal consumption by six major power plants) suggest solid production during the month, but other factors such as weakening domestic demand could be a drag. 

Analysts at Westpac offered a market wrap. Key Quotes: "London/NY trade focused on a rapidly shifting narrative over the proposed Trump-Kim summit i

Analysts at Westpac offered a market wrap.Key Quotes:"London/NY trade focused on a rapidly shifting narrative over the proposed Trump-Kim summit in Singapore and new concerns in Spain, where PM Rajoy is under pressure after convictions for corruption of members of his party. Spanish 10 year bond yields jumped 7bp and Spanish equities closed -1.7%. Nerves otherwise weighed on yields and many commodities such as iron ore and copper. Crude oil fell 3%-4% after supply comments from Saudi Arabia and Russia. The US 10yr treasury yield fell from 2.99% to 2.92% - a three-week low - while 2yr yields fell from 2.52% to 2.47%. Fed fund futures yields slipped a little further, but still predict a rate hike in June, with another by year end. Fed comments came from Chair Powell, who promoted transparency, but added that forward guidance may have a smaller role in future; and Kaplan, who said normalizing rates gradually is appropriate. Italian politics remains very fluid. On Friday, Italy’s 10yr bond yield rose to 2.56% - an 85bp rise since early May. But there was a flicker of optimism at Monday’s open as the Italian president rejected the proposed finance minister for being anti-euro. New elections could be needed, which would be preferable for many investors. EUR/USD had fallen as low as 1.1646 Friday, a low since November 2017, but pushed above 1.1680 at Monday’sopen. USD/JPY rose to 109.80 early Monday, perhaps helped by indications that the Trump-Kim summit would take place after all. AUD followed the broad moves of EUR in Friday trade, slipping to 0.7543 and isn’t much higher early Monday. NZD is net little changed, around 0.6920. AUD/NZD initially made a fresh four-month high at 1.0962, but later fell to 1.0910. Data had limited impact. US durable goods orders fell 1.7% in April (vs -1.3% expected). While orders disappointed, shipments were firm, with core capital goods shipments +0.8% (vs +0.4% expected) - a solid start to Q2 that will solidify expectations for a large Q2 GDP rebound. Core orders rose 1.0% (vs 0.7% expected) but there was a -0.5ppt revision to March which took the shine off. German IFO business confidence held steady (unchanged at 102.2, vs. 102.0 expected). Although avoiding the recent trend of Eurozone data undershooting expectations, the declining trend from end-2017 strength persists. UK 1Q GDP was unrevised at +0.1%q/q. Household spending remains subdued."

EUR/USD has started out in early Asia with a bullish gap of 35 pips in thin illiquid trade. However, the weekend came with plenty of headline fillers

EUR/USD: a bullish opening gap away from new trend lows puts breaks on the downside.European politics to drive price action at the start of the week.EUR/USD has started out in early Asia with a bullish gap of 35 pips in thin illiquid trade. However, the weekend came with plenty of headline fillers to keep traders active despite the European and US holidays - Sergio Mattarella, the president of Italy, vetoed the choice of economy minister, prompting the Prime Minister to resign - euro bullish on the basis that the coalition is euroskeptic.  The attempts at forming a coalition between the Five Star Movement and League have failed; So we are still many weeks down the line since the elections and there is still no resolve. "The reason for the collapse of the budding populist government in Rome is that Matteo Salvini, the leader of the far-right League, and Luigi Di Maio, the head of the anti-establishment Five Star Movement, had proposed Paolo Savona, an 81-year old Eurosceptic economist, as finance minister," the Financial Times reported.A two-sided euro on Italian political catalystThe broader risk could be argued to be negative for the euro on the continued uncertainties in the eurozone project, (also recall last Friday's news that the Spanish government threatened by the corruption case) and not least, Italian politics - thus widening the DE/US yield spread. EUR/USD dropped from 1.1733 to Friday's closing low of 1.1645, (a new trend low). Looking ahead, the week will start slow on the data front but eyes will turn to both inflation figures from Germany and the EU ahead of the US Nonfarm Payroll report on Friday. On favourable jobs data from the US, 1.1550 will be a key level in a continuation of the downside. "We forecast a solid 205k nonfarm payroll employment increase in May, with essentially all of the gain coming from private employers," analysts at Nomura wrote.Key levelsThe technical picture leans bearish with the falling RSIs and the price changing hands below the 38.2 Fib of 1.0340-1.2556 range. Valeria Bednarik, chief analyst at FXstreet noted that in the 4 hours chart, "the pair is developing below all of its moving averages, with the 20 SMA providing a dynamic resistance at around 1.1720, and technical indicators turning lower within negative territory, the RSI currently at 30, all of which favors additional declines, now targeting the 1.1550 region, where the pair bottomed in November 2017."
 

Equities were mixed on lighter volumes with yields lower and the USD stronger. Key Quotes: "Outside of technology, US stocks were lower with energy

Equities were mixed on lighter volumes with yields lower and the USD stronger.Key Quotes:"Outside of technology, US stocks were lower with energy shares leading declines." "The S&P 500 and DJIA were down 0.2%." "Saudi Arabia’s oil minister Khalid Al-Falih said OPEC and allies were likely to boost output in H2 this year. Oil retreated around 4%." "European bourses were largely unchanged +/- 0.2%, the DAX outperformed on a solid IFO print." US Treasury yields were down 3-6bps and yields in Europe down 3-8bps. The USD gained on all in the G10 but the SEK." "NOK and CAD underperformed on lower oil. Gold was unchanged."