Asian markets rally on Monday morning after President Trump on his announcement last Friday left the trade deal with China intact, and he didn’t impose any sanctions on Chinese officials.
President Trump withdrew as expected Hong Kong’s special status after the new security law imposed by China. In Hong Kong, the Hang Seng index rally on the news adding as of writing 3.30% at 23,715. Investors ignored the riots for the sixth day in many U.S. cities after the death of George Floyd in Minneapolis.
Sentiment improved amid the better economic data from China. The factory activity, as presented by the manufacturing Purchasing Manager’s Index (PMI), came in at 50.6. That was below the 50.8 reading in April and below the expectations of 51.0. The Caixin/Markit manufacturing PMI for May came in at 50.7, beating the expectations of 49.6.
In Wall Street, the major indices ended mostly higher on Friday on reopening optimism and despite the dismal economic data from the USA. On Thursday, the U.S. Initial Jobless Claims came in at 2123K above the expectations of 2100K in May as the layoff in the USA continues. The four-week moving average was 2,608,000, a decrease of 436,000 from the previous week’s average. The U.S. jobless claims have surpassed 40 million since the lockdown.
Nikkei 225 index finished 0.18% lower at 21,877. The Hang Seng index trades lower for one more day and as of writing gives up 0.60% at 22,991, while the Shanghai Composite index is 0.11% higher at 2,849. In Singapore, the FTSE Straits Times Index is 0.19% lower at 2,510.
European stocks started sharply lower on Monday morning; the German DAX is 3.46% lower at 10,484. CAC 40 index is 3.98% lower at 4,390, while the FTSE MIB in Milan is 3.10% lower at 17,141. In London, the FTSE 100 is 0.19% lower at 5,751.
In commodities markets, the crude oil rally at two-month highs continues today. Brent crude oil is 0.03% lower at $37.70 per barrel, while the WTI crude oil futures contract for July delivery is 0.17% higher at 35.5. The gold price started the week higher, adding 0.75% at 1,742 attempting to reach the recent highs. The gold first resistance stands at $1,765 the high from May 18, while the first support stands at $1,731, the daily low. Silver price outperforms and is 2.75% higher at $18.32.
Cryptocurrencies recover some of yesterday’s losses, Bitcoin’s (BTCUSD) price is 1.16% higher at $9,555, hitting the daily low at $9,372 and the daily high at $9,601. Bitcoin’s (BTCUSD) technical picture is bullish, as the price holds above the daily moving averages and now targets the 10,000 mark. The first support for Bitcoin is seen at the $9,000 psychological mark.
On the other side, initial resistance stands at $10,065, the high from May 8. Ethereum is 3.23% higher, at $239.12. The initial resistance for Ethereum stands at 242.50 the daily top, while the first support stands at $204.92 the previous week low. Ripple is 1.13% higher at 0.2045. Litecoin (LTCUSD) is 1.14% higher at 46.12.
In the Lookout: Japan Capital Spending came in at 4.3% topping the expectations of -4.2% in the first quarter. The Japan Jibun Bank Manufacturing PMI in line with expectations (38.4) in May.
The Australia Commonwealth Bank Manufacturing PMI came in at 44 above the forecasts of 42.8 in May.
In South Korea, the Manufacturing PMI came in at 41.3, beating the expectations of 41.1 in May.
Trading Perspective: In the forex markets, EURUSD makes fresh two month highs adding 0.30% higher at 1.1133. USDCHF is 0.05% lower at 0.9603. GBPUSD is 0.48% higher at 1.2405; the AUDUSD is 1.23% higher at 0.6745. The U.S. dollar is also weaker against the Yen; the USDJPY is 0.20% lower at 107.56.
AUDUSD At Four-Month Highs
AUDUSD continues the rally from the March lows, making fresh four-month highs boosted by better macroeconomic data. The Australia Commonwealth Bank Manufacturing PMI came in at 44 above the forecasts of 42.8 in May. The AiG Performance of Manufacturing Index rose to 41.6 from the previous 35.8. Australia Inflation fell from previous -0.1% to -1.2% in May, while the yearly Inflation dropped to 0.1% in May from the previous 1.2%.
From China, the manufacturing Purchasing Manager’s Index (PMI) came in at 50.6. That was below the 50.8 reading in April and below the expectations of 51.0. The Caixin/Markit manufacturing PMI for May came in at 50.7, beating the expectations of 49.6.
On the technical side, the pair turns bullish after today managed to break above the 200-day moving average. On the upside, first resistance stands at 0.6757, the daily top. The next hurdle will be met at 0.6819, the high from January 27. In the case of a move higher, the next resistance stands at 0.6910, the high from January 17.
On the other hand, initial support stands at 0.6650 and 0.6648, the 200-day moving average and daily low. If the pair breaks below, then the next support will be met at 0.6609, the low from Friday’s trading session. The next support zone stands at 0.6569, the low from May 12.