Asian indices finished mixed today as investors are digesting the European Central Bank meeting and keeping an eye on the US-China trade tensions. The Nikkei225 finished 0.53 percent higher to 20,884; the Hang Seng benchmark in Hong Kong finished 0.26 percent higher at 26,965. The Shanghai Composite finished 1.17 percent lower to 2,827, while in Singapore, the FTSE Straits Times index finished 0.36 percent higher to 3,157.
Australian equities rose for a fourth straight session. Gains were widespread, with only the Consumer Discretionary sector finishing in the red. A last-minute rally helped the ASX200 (XJO) gain 60 points or 1% to 6,443. For the week, the index finished 0.7 percent higher.
European session started on positive foot today for the third day in a row as traders await the NFP figure later today. DAX30 is adding 0.48 percent to 12,011, CAC40 is 1.00 percent higher at 5,331 while the FTSE MIB in Milan is trading 0.54 percent higher at 20,290. The London Stock Exchange is 0.58 percent higher to 7,301 as President Trump tweeted that progress was being made “but not nearly enough” between USA and Mexico.
In commodities markets, crude oil managed to rebound from recent low and trades at 53.23. Oil is down almost 20% from the high in late April, wiping out about half of its rally earlier this year, due to increasing trade worries. Brent oil also trades higher to $62,50 per barrel as major oil producers have yet to agree on adjustments on output. Gold continues to attract investors as a safe-haven asset and consolidates around $1,330. The precious metal broke above all major daily moving averages this week, turning the technical picture to bullish. Gold will find support at the 1300 round figure and then at 1295 the 100-day moving average while more bids will emerge at the 50-day moving average at 1287. On the upside, resistance stands at 1344, the high from yesterday session.
In cryptocurrencies market, bitcoin (BTCUSD) continues higher for the second straight day. The daily low for BTC was at 7,670 and the daily high at 7,956. Immediate support for BTC stands now at $7,411, the session low from yesterday. On the upside, strong resistance now stands at the 8,000 round figure. Ethereum (ETHUSD) adds two dollars to 247 with capitalization to 26 billion. On the upside, the immediate resistance stands at 287, the recent high, while the support stands at 200 round figure. Litecoin (LTCUSD) also trades higher at 113. The crypto market cap holds above $173.0B.
On the Lookout: The ECB extended its forward guidance on keeping interest rates steady “at least through the first half of 2020” than previously “end of 2019”. Draghi stressed the downside risks to growth from rising trade war escalation and weakness in the European manufacturing sector. In Frankfurt, the Bundesbank slashed German 2019 GDP forecast to 0.6% vs. 1.6% previous. In Japan, the Leading Economic Index came in at 95.5, below expectations (96.1) in April and the Japan Overall Household Spending (YoY) came in below markets expectations (2.6%) in April: Actual (1.3%).
The markets are expecting the Fed to cut rates by 25 basis points in September this year, according to the Fed funds futures.
In the America economic calendar, we await the US non-farm payrolls, wholesale inventories, and consumer credit data. The NFP report is expected to show that 175,000 jobs added in May, down from 263,000 in April. The unemployment rate is expected to remain steady at 3.6%.
Trading Perspective: In fx markets, the US dollar trades flat on speculation over Fed rate cut after comments from the Federal Reserve on Monday raised expectations that the U.S. central bank is moving closer to a rate cut.
As of writing, Greenback is trading at 97.00, while the Aussie dollar trades lower to 0.6975 after the rate cut from the Reserve Bank of Australia. Kiwi trades flat to 0.6623 level as New Zealand has cut its budget surplus forecast for 2019/20 to NZD1.3bn.
GBPUSD is indecisive today as it trades above and below the 1.27 mark as the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2685 and the daily high at 1.2717. Major support now stands at 1.26 recent low. On the upside, immediate resistance now stands at 1.2723, the high from yesterday. Pound shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion, so any uptick can match excess offers.
In Pound futures markets, the open interest shrunk for the fifth session in a row by around 2.6K contracts, volume extended the downtrend for another session, this time by around 10.7K contracts.
EURUSD started today flat as traders await the NFP data from the USA. The pair is trading at 1.1265, and an attempt to 1.13 looks possible. On the upside, the immediate resistance stands at 1.13, while more offers will emerge at 1.1375, the 200-day moving average. Support stands at 1.1210, the 50-day moving average, while more bids will emerge at the 1.12 round figure. We are following news from Italy as their budget deficit dispute with the European Commission continues, and the political turmoil in Austria and Greece.
In euro futures markets, the open interest increased by 1.2K contracts on Thursday, while volume rose by almost 13K contracts, the third build in a row.
USDJPY trades higher adding 30 pips to 108,48, today the pair hit the low at 108.31 and the high at 108.52. The pair will find support at 107.84 recent low, and on the upside, immediate resistance for the pair now stands at 108.52, the high from the Asian session. The USD price dynamics will continue to drive the pair’s momentum as traders focus shifts to Friday’s closely watched US monthly jobs report (NFP).
In Yen futures markets, open interest increased by nearly 1.5K contracts on Thursday, volume shrunk for the fourth consecutive session, this time by 49.2K contracts.
USDCAD facing strong selling pressure and trading as of writing at 1.3350 at the daily low amid USD weakness across the board and as the rebound in crude oil prices, Canada’s main export item, seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at the 100-day moving average around 1.3345 while extra support stands at 1.3300 round figure. On the upside, immediate resistance stands at the 1.35 zone before an attempt to 1.3517 where the 50-day moving average stands.
