Asian markets finished higher on Friday amid renewed optimism after U.S. and Chinese officials spoke on the phone and agreed to start discussions for further negotiations. Strong corporate earnings also help stocks. On the other hand, dismal economic data from Europe and the USA continues to show the coronavirus impact on the global economy.
Wall Street ended higher yesterday despite the U.S. Initial Jobless Claims registered in at 3169K, beating the forecasts of 3000K on May 1, the previous reading was at 3.839K. The Unit Labor Costs came in at 4.8% above the forecasts of 4% in the Q1. The Nonfarm Productivity came in at -2.5% also toping the forecasts of -5.5%.
Nikkei 225 finished 2.56% higher 20,179. The Hang Seng index is 1.03% higher at 24,226, while the Shanghai Composite index Sensex is 0.79% higher at 2,894. In Singapore, the FTSE Straits Times Index is 0.10% lower at 2,589.
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 rebound continues as the global economy gradually reopens. Brent crude oil trades 3.70% higher at $30.41 per barrel, while the WTI crude oil futures contract for June delivery is 5.52% higher at 24.84. Gold’s price consolidates today after yesterday’s rebound, and as of writing, it is 0.11% higher at 1,716. Gold’s first resistance stands at $1,741, the recent high, while the first support stands at $1,700 round figure. Silver’s price is 1.05% higher at $15.47.
Cryptocurrencies retreat today after yesterday’s rally, Bitcoin’s (BTCUSD) price is 2.00% lower at $9,800, hitting the daily low at $9,739 and the daily high at $10,065. Bitcoin’s (BTCUSD) technical outlook is bullish now, as the price holds above the 200 and 100-day moving average, while a close above the 10,000 mark will attract more bids. The first support for BTCUSD is seen at the $9,000 psychological mark. On the other side, initial resistance stands at $10,065, the daily high.
Ethereum is 2.08% lower, at $208.13. The initial resistance for Ethereum stands at 227.73 the high from May 1st trading session, while the first support stands at $200.00. Ripple is 1.46% lower at 0.2154. Litecoin is 1.90% lower at 46.54.
In the Lookout: The Japan Jibun Bank Services PMI came in at 21.5 below the forecasts of 22.8 in April. Labor Cash Earnings came in at 0.1%, below the expectations of 1.6% in March. In Japan, Overall Household Spending yearly reading came in at -6%, beating the expectations of -6.7% in March.
PBOC sets the Yuan reference rate at 7.0788.
Germany Trade Balance s.a. below forecasts (€18.9B) in March: Actual (€12.8B).
Trading Perspective: In the forex markets, the EURUSD is 0.04% higher at 1.0835. USDCHF is 0.08% lower at 0.9721. GBPUSD is 0.23% higher at 1.2383; the AUDUSD is 0.44% higher at 0.6523. The U.S. dollar is stronger against the Yen; the USDJPY is 0.13% higher at 106.37.
USDCHF Lower Amid Weak Employment Data And Fears of Negative U.S. Rates
USDCHF trades lower for the second day after yesterday the pair rejected at the 200-day moving average. The U.S. economy is contracting at a fast pace amid the coronavirus outbreak. Yesterday, the U.S. Initial Jobless Claims came in at 3169k, beating the expectations of 3000k on May 1, the previous week reading was at 3.839k. The Unit Labor Costs came in at 4.8% above the expectations of 4% in the first quarter of 2020. Nonfarm Productivity came in at -2.5% topping the forecasts of -5.5%.
Also, the ADP employment change came down to -20.263M for April below the expectations of -21.00M. Large businesses with 500 employees or more cut 8.9 million jobs. The Service sector lost 16 million jobs in April; hotels and restaurants lost 8.6 million, while the retail sector lost 3.4 million positions.
For the last seven weeks, about 33 million Americans filed for unemployment benefits in the last seven weeks. The unemployment rate is expected to surge to at least 16%.
Investors fear that the dismal economic data and a historic contraction in the second quarter will force the Fed to proceed with negative interest rates.
The technical picture is neutral for the pair as it is trapped between the 100 and 200-day moving average. Yesterday’s rejection at the 200-day moving average canceled the recent positive momentum.
On the downside, support for the pair stands at 0.9706, the daily low. The critical support for USDCHF is the 100-Day moving average at 0.9692. A break below will provide a bearish signal. The next support area is at 0.9649, the 50-day moving average.
On the contrary, the first support for USDCHF will be met at 0.9738 on the daily top. A break above 0.9738 might open the way for a test of the critical resistance at the 200-day moving average (0.9789). If the pair breaks that resistance, then bulls will be in control, targeting 0.9833 the high from March 25.